Forex: Dollar rises sharply against the Yen

FXstreet.com (Córdoba) – USD/JPY jumped on Friday, rose for the first time after three days and posted the biggest daily increase since August. The pair peaked at 89.87, hitting the highest price in almost four days. During the American session the Dollar extended previous gains and rose more than 70 pips.

James Hyerczyk of ForexHound.com, affirms: “Yesterday’s move through .8800 was not enough to attract new sellers and traders quickly covered their short positions. Bernanke’s comments about raising interest rates is causing Yen traders to lighten up long positions on the thought that the Japanese Yen will become a carry currency once the Fed begins to raise rates.”

• USD/JPY

USD/JPY (Oct 10 at 07:00 GMT)

89.74/76 (0.01%)

H 89.74 L 89.68

S3	S2	S1	R1	R2	R3
89.2913	89.5156	89.7400	89.7400	89.9644	90.1887

[?]Trend Index	[?]OB/OS Index
Strongly Bullish	Neutral
Data updated on Oct 10 at 06:20 (15-minute timeframe)

[ View USD/JPY technical studies ]

"Market Seems Broken" After Monster Rally, Lindzon Says

Good news for the markets!

Seeking stability, President Obama nominated Ben Bernanke to a second term as Federal Reserve chairman. Consumer sentiment in August rose more than forecast. And home prices rose again in June, according to the S&P Case-Shiller Index.

Both the Dow and S&P hit their highest levels of 2009 intraday Tuesday, and all seems well for the bulls. But Howard Lindzon of Knight's Bridge Capital isn't among them and candidly admits to being "clueless" about the rally at this point.

One reason is the big volume in shares of "bankrupt" companies such as Citigroup, Fannie Mae, Freddie Mac, Sirius XM Radio and AIG, which don't seem to be moving on any fundamental growth, says Lindzon, who is also co-founder of Stocktwits. There are "just no underpinnings of real growth," he says. "The markets seem broken."

How about blaming the alleged "vampire squid" known as Goldman Sachs? From "trading huddles" to high-frequency trading, Goldman has been taking an image beating as of late. Lindzon argues we should be focusing on our policymakers -- not guys at Goldman, who are doing what bankers should do -- making money. In fact, everyone had the opportunity to buy at the bottom of the market -- not just the Goldman gang.

So what's Lindzon trading now? He's "mainly watching" but short Capital One and Best Buy and long a few Chinese stocks, oil, Netease.com, and US Natural Gas ETF
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What's an Investor to Do Now?

With financial markets in distress and the Dow tumbling below 10,000 for the first time in four years it's tempting to put your head in the sand -- or all your money under a mattress.

Rather than refusing to look at your statement, use this moment of fear and loathing of all things financial to your advantage:

• Review your portfolio and see if you're really diversified across all asset types and global markets, as well as cold, hard cash. Not much is working now but diversification is one thing you can control.
• Make sure your portfolio fits your time horizon. If you have 20 or more years before retirement, history suggests you will benefit from purchases made during the current market duress. (And I'm talking about long-term investing via a 401(k) or similar retirement program, not a short-term trade, which may or may not pan out in the next week.)
• Know your risk profile. If you can't stomach the drama, maybe you're really not an "aggressive investor" after all.

Such advice may seem obvious to more sophisticated market players -- many of whom were anxious to "buy the dip" this morning, at least before the open. But with emotions running high, it's worth remembering what long-term investing is really all about.

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