FXY JPY Signal - June 17, 2013
By: Andrew Keene
FXY is currently down 8.21% YTD with an overall decrease in its growth since September of 2012. There have been brief, sharp spikes of growth once every month since March 2013, and currently growth in July for FXY is in a positive direction and has increased 1.72% overall during the past three months. However, long term views of FXY stock trends show that it really has no hope for going anywhere but down. Just today, FXY is down .69% since its opening at $103.31, which is the second highest opening price in the past month. Right from the start, FXY dropped to under $103.25 and has not risen above that all day. Two months ago FXY experienced a low point ($94.38) it had not seen since late 2008, and though that was the worst of the downward slide starting in September 2012, recovery since then may be slumping down again by the end of this month. Reasons for Japan’s current inflation can be accredited to hiked food prices, attempts to stabilize the housing market, and soaring fuel / energy costs, all of which chip away at the purchasing power of the yen.
Lets play this to the Short side, but let’s give the trade some time and get a Great Risk vs. Reward set-up:
My Trade: Buying the FXY September 100-93 Put Spread for $1.35
Risk: $135 per 1 lot
Reward: $565 per 1 lot
Reward to Risk Set-up: 4.2-1