Worlds Largest Pension Fund – Buying Japanese Stocks

The Nikkei has just moved 340 points higher on rumour that Yasuhisa Shiozaki ( who has been advocating for the GPIF to reduce allocation to domestic bonds ), may be appointed the Health Minister ( so what? ) when Abe announces his new cabinet tomorrow.

The GPIF ( The Government Investment Pension Fund ) The world’s largest pension fund ( yes a Japanese fund not American ) is expected to increase purchase of Japanese shares to 20 percent of holdings and reduce domestic bonds to 40 percent.

With the market way ahead of itself here it’s the actual “timing” of said purchases that is still unknown. The fund would need to buy an additional 3.5 trillion yen of domestic stocks to reach the 20 percent target, so the “span of time these purchases would be made over” is key. The fund will announce its new asset allocations in the fall – according to GPIF investment committee chairman Yasuhiro Yonezawa.

Both Gold and the Japanese Yen got absolutely demolished overnight, with fear “once again abated” having the largest pension fund on the planet now suggest it’s ready to “step it up” in support of the ponzi we’ve all come to love.

This comes as tough news for Kong as I’ve been trying to “get long JPY” on the inevitable turn, so it remains to be seen if this will manifest as a simple “spike” or develop into something larger. My initial thoughts are “nothing can save Japan” and that this only goes further to affirm the complete and total desperation currently sweeping the land of the sinking sun.

Regardless – one has to respect that a player as large as The GPIF most certainly has the ability to “ruin your day” should they decide to go all in.

Markets Set To Roll Over – All Things Say Yes

We are very close here folks.

Aside from the currencies, nearly every other thing I track / read / research suggests that this may not only be a strong area for “correction” – but the start of something much larger.

There has rarely ( if ever ) been a time in history when as many separate indicators / charts / graphs and info has been “this skewed” to suggest such divergence and risk of serious “downside action in global appetite for risk”.

Considering the current geopolitical backdrop and with U.S Equities still “clinging” to the highs, personally – I don’t see a blow off top scenario. To whatever degree that retail investors have “taken the bait” over the past 7 months….I believe they are “already in”.

The situation with Ukraine really only being the tip of the iceberg now as Putin’s “Gazprom” now announces “massive oil deal with China” again…bypassing the U.S Dollar in trade. These are tremendous blows to the U.S system, and make clear The U.S “true intension” in Eastern Europe.

They must save the U.S Dollar as world reserve currency – and will stage a war to do so.

The Nikkei rolled over a couple of days ago, USD looks set to plunge along with equities, and the entire currency market has more or less moved “risk off”, with USD/JPY “not breaking out”, falling back into range and expected to fall further.

The real-time trades in currencies, gold and silver as well U.S Equities, weekly reporting and daily commentary  can be found at the members site: Forex Trading With Kong.

Citi Sells All USD Positions – No Really?

Again….you generally need to be “ahead of these moves” in order to take advantage ( note yesterdays post- please scroll down ).

Gold, & Silver Jump As Citi Sells All USD Positions Fearing “Squeeze”

I envision a time ( in the not so distant future ) when “all things American” ( USD, Stocks and most certainly the bonds ) are sold.

I’m sure you’ve noticed the correlation of USD strength = U.S Equities strength so…..one would have to imagine the complete and total “inverse relationship” as well right?

Or they just all keep going up forever. RIght.

Little chance of that.

Other than the few short USD positions already in play I’m more or less “cash ready” for the large positions “long JPY” ( against most every other currency on the planet ) kicking in here soon.

No shorts in SP 500 as of yet.

More at the Members Site: Forex Trading With Kong

 

 

 

Forex Markets Come Alive – USD Wash Out

Wow.

A very large “gap up” here in the wee hours Sunday night before markets really kick off, and the U.S Dollar continues to surge higher against the E.U currencies.

One can’t imagine a single USD bear left on the planet.

Exactly as it should be…. before the thing tanks.

It’s amazing to me how public perception continues to view USD’s recent surge as “some indication” of a stronger U.S Economy.

How on Earth can The U.S Governement ( as well the crooks at The Fed – a private held bank ) handle the enormous contribution to the “serviceable debt load” ( remember The U.S is “officially broke”, with a continued rise in the “allowable debt ceiling” now just a given ) brought about by a stronger U.S Dollar?

It’s impossible. The Fed mandate is to “kill USD” at whatever costs, as to keep these balls in the air as long as they possibly can.

A strong U.S Dollar “kills” the U.S economy! As exports tank, and the amount/value of outstanding sovereign debt balloons “past” the balloon we already know to be.

Find me an “economist” who can make the arguement that “a strong U.S Dollar is good for America” and I’ll eat my hat.

A strong U.S Dollar represents everything the U.S Gov and The Federal Reserve fear most so….I encourage you to start looking for signs of reversal – as opposed to getting to excited.

 

 

Fed Speak Today – Yellen To Make It Or Break It

Well you can never boil this down to a single days trading ( especially these days ) but as per our outline last week, this “relief rally” has played out to the letter.

As seen via Japan’s Nikkei Index ( $Nikk – the symbol I follow in case you want to add it to your watch lists etc.. ) we’ve seen our “correctional move higher” with this mornings over night action now down -175 points forming a potential “swing high” – suggesting we are ready for reversal.

The chart from last Sundays report:

Nikkei_August_17_Forex_Kong

Nikkei_August_17_Forex_Kong

All corresponding and related JPY pairs ( AUD/JPY, NZD/JPY, CAD/JPY, GBP/JPY as well EUR/JPY, CHF/JPY and USD/JPY ) have now put in bearish reversal type candles with their daily RSI’s all rolling – now pointing lower.

The movement of The Nikkei (lower) and JPY (higher) correlates near 100% these days so there is no rocket science here. It’s very easy to see and follow along. I’ve also suggested the correlation with Gold – being that both Gold and JPY should move higher when risk comes off.

European Indices are also trading down / in the red here as of this morning, leaving us with of course…U.S stocks, Bonds and the U.S Dollar firmly held in the hands of Janet Yellen and the statements  / information expected today at the Jackson Hole Meeting.

If not for this risk event ( pure gambling if you think you’ve already got the markets reaction figured out ) the “long JPY trade’s we’ve been setting up for” are now in fantastic shape across the board.

Please get these on your screens and note these levels.

The Australian Dollar has obviously ( and expectedly ) rallied along side risk the entire week – now fading and looking weak.

Will markets take Yellens comments as full blown dovish ( suggesting all is well in “Fed land” ) and just continue to climb? Or will there be suggestion of “possible tightening” and a more hawkish view ( possible rate hike coming earlier than expected ) be the case?

You’ve only got a couple more hours to wait ( which I certainly suggest you do ) and find out.

Everything I track suggests we move lower next week, but one can’t discount the idea of an immediate “upward reaction” to Fed comments here this afternoon as “this is what the people want” right?

Still holding a couple of small “short USD trades” ( underwater at present ) and suggesting everyone just “stay out of the way” until this very large “risk event” passes.

Gold Smashed This A.M – No Worries At All

At this point in the game I have little concern for the price of gold as it’s trading almost exactly in tandem with the Japanese Yen ( JPY ) – both functioning as obvious “safe havens”.

These assets obviously gain momentum when “risk comes off” and considering that markets are now re testing the near term highs – what should one expect? ( insert lightbulb above head here )

The average investor, caught in the headlights of the main stream media and The Fed is certainly not “seeking safety” here as of this morning

Appreciate that nearly everything I track is stretched to extremes right now and rightfully so as…we are so very close to one of the largest turns this market will have seen in a very long time.

Why would  gold be any different? A couple bucks here and a couple bucks there – not to worry.

These low volume days ( some of the lowest volume days of the year ) are legendary for getting people excited / worried as prices in “all assets” swing to extremes, washing out weak hands, luring in new buyers etc…

It’s always this way before a major turn in markets as the boys at your local brokerage / bank take the opportunity to push prices “as far in their favor as possible” before dumping.

September has everyone back in their cubicles. Likely back in their cubicles selling stocks and buying gold.

Gold is good – just not particularly “speedy” here at the moment.

Comments On The Fed – All I Needed To Hear

Well that certainly was a breath of fresh air.

In case you don’t spend your time pouring over “Fed Statements” or inturpurting these types of things ( lucky you )…let me simplify.

The Fed’s general angle was hawkish….ie……the suggestion that a time to “reduce the balance sheet” is now upon us suggesting that a current holder of 4 TRILLION DOLLARS WORTH OF U:S ASSETS  ( The U.S Fed – a privately held bank currently paying out 6% dividends to it’s shareholders ) will soon become a “net seller” as opposed to the last 6 years functioning as a “net buyer” of U.S garbage.

You didn’t get that? CNBC didn’t take a little silver spoon and put it up to your mouth?

Im shocked.

Ignore the short term reaction…..ignore Jackson Hole and the “next line of commentary”….

I’ve heard all I need to hear.

Bravo Janet! Bravo!

 

 

 

Kramer Knows Everything – Says Yellen Should Sell

Your beloved Kramer of CNBC fame just suggested “It’s time for Yellen to ring the register”.

I tune in to CNBC at times to get a good dose of what “home investors” are being fed these days, and was actually quite surprised here this morning.

As CNBC’s ratings and viewership continued to plunge ( to the absolute lowest levels in the history of the channel ) frankly I get “more interested” in what nonsense they are coming up with.

Could it be that they are actually leaning more towards telling the truth with hopes of staying on the air?

You’d have to imagine a room full of executives praying to god they will still have jobs come Christmas time thinking “hmmmm……perhaps we should do something about the format….we’ve gotta save this thing!”.

Not like they really have much choice in the matter, having their headlines / scripts / stories spoon fed to them from the “boys upstairs” ( the media big wigs who are also Central Bank big wigs, corporate America big wigs etc…) but to what ever degree they can – perhaps a bit of “reality” can creep in.

Kramer says “Yellen should sell” with respect to the now “4 Trillion Dollar Balance Sheet” The Fed is currently holding. That’s a whole lotta stocks n bonds isn’t it?

So the question begs regardless…….

If not now……..then when?

And even more so – How?

 

USD/JPY – This Market “IS” USD/JPY

Some snippets from conversation on the currency pair USD/JPY from the Members Site, as I see it as valuable information for all.

**Watch it trade along side risk here as……USD/JPY has only managed to make it “back to the top of it’s range” while the SP 500 as well Nikkei have rallied to complete a total retracement of the move lower last week.

If that’s the best USD/JPY can do….”now” with markets back near the all time highs….you’ve got to question what it’s got left in it.**

 

**USD and JPY both represent the two “base currencies” currently being printed at alarming rates.

These are considered “funding currencies” as money is borrowed on the cheap…and in turn “invested” in assets ( U.S Stocks for example ) where “yield can be found”.The comparison of the two throws many for a loop….and as a currency pair it’s a tough nut to crack without broader understanding. The last piece of this puzzle rests with JPY.

As risk comes off ( I don’t care if it’s tomorrow…but in general ) all those investments “funded” by cheap JPY bust…..and the money flows back home.

Like a tidal wave….all the “free money” suddenly comes out of “all easy assets funded by it” – and comes racing back to it’s place of origin.**

 

**Nothing can stand in the way of this as the trade is “so massive” that it’s movement overtakes / over shadows all other movements in markets. U.S Bonds are sold, U.S stocks are sold, Australian and NZD Dollars are sold….EVERYTHING funded by cheaply printed JPY is sold as the elastic band “snaps back” and JPY is repatriated back home. The BOJ has printed , devalued , intervened MANY times before this ( although not on such a desperate scale ) and every single time…..I’m talking EVERY SINGLE TIME – the same result.

It doesn’t work….it won’t work this time.

Only thing is…..with such desperation – it’s already gone on far longer than one would imagine…..hence.

The disaster / BANG we’ll eventually see when she “once again”….does what she always does.**

 

**USD/JPY “IS” the market ( as per my entire trading thesis since you’ve followed ).

Seeing it “top out” back in January “WAS” the top of the market and this entire summer has merely been “retail distribution” as the big boys ( and myself of course ) plot our way towards the next “real move”. Watching USD/JPY fall thru 101.20 will mark ” the beginning of the end ” in global risk…..as ALL THINGS will follow suit.

A valuable observation / consideration for one to take forward.**

Obviously much more info available in at the members site, should you be so inclined to “broaden your horizons”.

Upside Targets Met – Thoughts On Jackson Hole

Well that has my upside targets in both The Nikkei (15,499 ) as well SP 500 ( 1668 – 1678 ) more or less met so…….

Give or take another couple of points over the next day or so, this certainly creates an interesting scenario moving towards Jackson Hole – and the expected “chatter” out of The Fed.

It’s been my believe that “this indeed will be the time” where markets are given “some kind of clue” that perhaps the time has come to buckle up / take profits / begin taking precautions as to coming changes in monetary policy etc but…..I’ve obviously been disappointed by Yellen in the past.

Lining up the fundamentals as well technicals would have both USD as well as Equities take a turn lower, with JPY ( as well gold ) moving higher ( and obviously the commodity currencies falling off along side risk ) so…..the question obviously begs……

Will The Fed do it or not?

One has to keep in mind that, as much as a strong USD ( in at least one way ) creates an impression of a stronger economy, it also represents a tremendous burden on the American Governments debt load. For every single point that USD moves higher…..the amount of outstanding Government debt also moves higher – having to be repaid in USD.

It’s been The Fed’s plan since all of this began to “keep a cap on USD” ( well actually to drive it into the basement ) with the thought in mind of “exporting inflation” and keeping the “service of outstanding debt” at a bearable level.

One has to keep in mind that The American Government and The Fed NEED a weaker dollar in order to keep the ponzi going so…..it’s difficult to imagine USD “shooting for the moon” before at least another solid move lower, as changes to monetary policy ( and the supposed “end of QE” ) take root here in October.

Trading it is a nightmare as…….one stands to take a substantial hit getting caught leaning to hard in either direction – with these types of “risk events” best viewed from the sidelines.

As it stands I will continue to hold the few “short USD” irons currently in the fire, and let the chips fall where they may, with continued focus on JPY vs the commodity currencies setting up for the larger trade at hand “post Fed”.

Continued divergence across several currency pairs still see USD moving lower….before higher.