Comments on: US Steel Shows False Breakout and Reversal http://blog.afraidtotrade.com/us-steel-shows-false-breakout-and-reversal/ Helping traders overcome fears and emotions in trading Thu, 09 Feb 2012 14:53:15 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Richard http://blog.afraidtotrade.com/us-steel-shows-false-breakout-and-reversal/comment-page-1/#comment-115487 Richard Thu, 03 Jul 2008 07:30:58 +0000 http://blog.afraidtotrade.com/?p=2558#comment-115487 In the linked article, I related that there was a massive unwinding of the yen carry trade, which complemented two others that occurred on June 6, 2008, and June 20, 2008, which can be seen in the BRICs, EEB, a traditional yen carry trade falling 3.8%. US Steel had a "false breakout" due to a "pop" in the US Dollar, relative to the yen, when the USD/JPY went to 108.4. US Steel really got hit hard, not only by a turn lower in the USD/JPY to 105.86, but also by today's unwdinding of the yen carry trade, where investors who borrow from the Bank of Japan at 0.5% interest, sold stocks to repay their loans. Today's massive sell off in interest rate differentially favored investments can be seen in the fall of the following basic material stocks as well James River Coal, JRCC, 22.1% (producer of both steam and metallurgical coal) Cleveland-Cliffs, CLF, 17.2% (producer of iron ore pellets) Consol Energy, CNX, 14.6% (producer of steam coal) AK Steel Holding Corp, AKS, 13.6% (steel manufacturer) United States Steel, X, 12.5% (US based steel manufacturer) Intrepid Potash, IPI, 8.2% BHP Billiton Ltd, 6.2%, (producer of base metals) Peru Copper, PCU, 5.8%, Aluminum Corp of China, ACH, 3.9% Deflation is coming to stock wealth and US Steel. I recommend that one be invested in gold. In the linked article, I related that there was a massive unwinding of the yen carry trade, which complemented two others that occurred on June 6, 2008, and June 20, 2008, which can be seen in the BRICs, EEB, a traditional yen carry trade falling 3.8%.

US Steel had a “false breakout” due to a “pop” in the US Dollar, relative to the yen, when the USD/JPY went to 108.4.

US Steel really got hit hard, not only by a turn lower in the USD/JPY to 105.86, but also by today’s unwdinding of the yen carry trade, where investors who borrow from the Bank of Japan at 0.5% interest, sold stocks to repay their loans.

Today’s massive sell off in interest rate differentially favored investments can be seen in the fall of the following basic material stocks as well
James River Coal, JRCC, 22.1% (producer of both steam and metallurgical coal)
Cleveland-Cliffs, CLF, 17.2% (producer of iron ore pellets)
Consol Energy, CNX, 14.6% (producer of steam coal)
AK Steel Holding Corp, AKS, 13.6% (steel manufacturer)
United States Steel, X, 12.5% (US based steel manufacturer)
Intrepid Potash, IPI, 8.2%
BHP Billiton Ltd, 6.2%, (producer of base metals)
Peru Copper, PCU, 5.8%,
Aluminum Corp of China, ACH, 3.9%

Deflation is coming to stock wealth and US Steel. I recommend that one be invested in gold.

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