Not a Short Term Strategy

Since the inverse hedge strategy I'm using is highly depends on carrys trades of its crosses. I'm posting this article I gathered from John Jagerson of pfxglobal.

"The carry trade is under attack today but from analysts not prices. Certainly, most carry trade portfolios, including one of my own that I manage, are eating some losses this morning but the press on the issue is extremely negative. It seems counter intuitive to me to assess the health or strength of what is essentially a long term strategy based on short term movements in the market. Additionally, the definition of the "carry trade" as one in which you are simply short the JPY is way to narrow. As the JPY hits all new highs against the USD, it is a good time to think about what this strategy really is and why it works".

"The Carry trade is an opportunity in any market that offers yield differentials between similar assets. In the forex, the GBP/JPY, AUD/JPY or NZD/JPY offer a very wide differential but should not be the definition of this strategy. In the forex alone other currencies like the CHF, SEK and USD, to name three, can play a role in a managed carry trade portfolio. If an investor is actually trying to leverage the difference between yields and play the market's propensity to rise in favor of higher yields, their outlook should be diversified (which the three pairs I listed above are not) and long term. As the market changes the carry trade portfolio should also change but not the strategic concept itself".

As for an update: My portfolio as recovered a bit from a week of drawdown. The bearish moves of eur/chf and gbp/chf has slowed down, which is a good sign that it might reverse from here. EUR/CHF bouncing off its 74.6 fib supports this insight. I'm just waiting for a breakout from this consolidation.