Retired Trader Says Watch the Mega Moves Coming

The overstretching of the fx markets in the month of Jan has left the world now vulnerable to a mega move.

That EURJPY has appreciated 10% in the month of January is surely not a feat for the faint hearted and there are many a heart burnt soul out there whom I can potentially empathise with for I have initially long the EURJPY move but faded it too early.

Table of Changes from 3 Jan 2013.

EUR 4.02%
JPY 6.06%
AUD -0.95%
GBP -1.90%
CHF -1.46%
SGD 1.57%
CNY -0.14%
KRW 3.15%
MYR 2.70%
TWD 2.10%
THB -1.71%
INR -2.35%
IDR 1.00%
EURJPY 10.32%
EURAUD 5.02%
XAU -1.05%
XAG 1.61%

So I called the former trader chap and asked for wisdom for I am suffering from mild concussion.

He says this.

50-50 chance now for trades.

* USDJPY setting up for strong move, either up or down 150-200 pips before week close.
* USDSGD stay long. 1.2822 by May.
* AUDUSD stay short.
* 10Y UST stay short.

And I am thoroughly disgusted by the reckless behaviour I am witnessing right now. People tripling up on their USDJPY, turning long now for 3-4 times their usual size because they were wrong.

That certainly warrants mega moves.