- Are markets nothing more than a collection of 'official' interventions as increasing suggested by trading experts? Or, are the trends a manifestation of capital flows dominated by Adam Smith's invisible hand?
- The Yen should provide an interesting case study for those still in doubt. The Japanese government, whom has been trying to stop the Yen's appreciation for months (see chart below), has escalated its battle against the primary up trend in recent days (see comments below).
- As I have suggested many times before, any intervention against the primary trend is a waste of money.
Japan's prime minister signaled on Thursday that authorities would keep intervening to curb yen strength as sagging manufacturing confidence underscored the threat the currency poses to the fragile economic recovery.
Yen and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
Commercial traders, likely supporting the BOJ, have been attempting to slow the Yen's appreciation since July 2010. There will be counter-trend reaction when time is right, but no amount of intervention will reverse the primary trend.
Source: finance.yahoo.com
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