To: George Mc Geary who wrote (28923 ) 9/22/1999 3:36:00 AM From: IQBAL LATIF Respond to
George great call on puts.. I think that bigger threat ot Japan comes from that comsumption tax rumors than any thing else, yesterday when i got out of Japn early in the session due to Yen strengthening I could see that JPN future were marked down 300 points, so there was not much left to salvage from 190 calls the puts premiums were marked up, so I think today's more than expected sell should have given some added value to those puts.. In my opinion if we break this 17200 area on two consecutive days we are in for some wild ride in Japan as we go and test as low as potentially 16200, I am watching for international reaction to this new consumption tax if we see Yen weakening above 10520 area and taking out 106.20 I would think we will move up quickly to 110 area, without intervention I see a possibility of Yen weakening, the Japannese are not interested to see 'new flight of assets' from Japan, they would like Nikkei to hold on to the gains.. so for them it makes perfrct sense that this new selling pressure can be eased by co-ordinated Yen weakness, if Yen continues to strengthen and this statement is not retracted than Japanese assets would sel hard, people as I have written before have not forgotten that 1997 recession started or deepened with this consumption tax.. so may be to save the market we would see Yen weakening to avoid a double whammy..puts may be still a good idea if we see some rebound or continued strength in Yen..Nikkei will not be able to maintain gains and inveostors will drive out..markets at the end of the day are made by corporate proftis and not manipulated flights or assumption of recoveries, in case of this present logic that sell US and buy Japan that created Yen strength in first place, I feel that this whole logic will find its rightful place in dustbin of short market history soon..
