[TA DAILY] Currency War

This really cannot be a big surprise to anyone.  I have highlighted the issues (problems) that   VIEW ONLINE         UPCOMING EVENTS     Larry's Morning Commentary Currency War   This really cannot be a big surprise to anyone.  I have highlighted the issues (problems) that the Chinese face often over the past few months.  They have a stock market in, let's put it nicely, a correction, huge debt to GDP, a massive housing bubble, and over the weekend we got weaker than expected export numbers.  What is China's choice but to join the global currency "war" (by the way, remember it was us who started it with QE1)?  I mean come on!  SocGen's Albert Edwards warned us of this FIVE MONTHS ago: "We have long believed that China's growth and deflation problems will necessitate a devaluation of the renminbi in a strong dollar environment. There is mounting evidence that this process may already be underway as the currency falls to a 28-month low against the dollar… In the current deflationary environment the Chinese authorities simply can no longer tolerate the continued appreciation of their real exchange rate caused by the dollar link." What does this all mean for us?  First, at least it is an open admission by China that things are indeed bad enough that they have to make this pretty extreme policy decision.  Secondly, and more germane to our trading, it may take out of the hand of the Fed the ability to raise rates on their own terms and on their own timeline. From RanSquawk: "T-Notes trade higher by around 15 ticks due to the following reasons: Firstly, the PBoC has acted to weaken their currency in an attempt to remain competitive amid falling exports and this has therefore been interpreted by some as an admission of global growth concerns. Secondly, in practicality,the PBoC will have to buy USTs in order to weaken their currency. The weaker CNY will in turn could lead to an overall stronger USD, which may influence the Fed's plans for future rate hike."    Trade well and follow the trend, not the perma-bull OR perma-bear "experts." Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.   Read Past Issues of Larry's Morning Commentary       The markets had a sharp reversal today, almost giving back all of its gains from the previous session. The PBoC made a stunning move by devaluing their currency in hopes to stabilize their stock markets. The devaluation caught many in the markets by surprise, and cause some fairly aggressive selling...   Read More       TECHNICAL DATA ES 2084.00 / 2074.00 POC 2079.75 YM 17,397 / 17,317 NQ 4546.00 / 4494.50     It's no surprise that in the midst of earnings season we have been discussing the concept of implied volatility mean reversion a lot. What is it exactly? Reversion to what? Under normal circumstances the time structure of the different option expirations is essentially flat. Sure, there may be slight variations given different market...   Read More     Watch how our instructors call out live signals, answer questions, provide detailed commentary and compare notes with fellow students. Our live classrooms offer training on all markets - where you can watch the exact techniques our top instructors use with simple, yet complete explanations of every move they make in real time. 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