It’s crazy out there.
Currencies are literally “all over the map” with several of the usual correlations giving traders/analysts a good run for their money. Eur up and stocks down, continued JPY strength in the face of risk aversion, and the British Pound (GBP) on a tear.
In equities the transports ($tran) have taken it on the chin, with Fed EX pummelled over last several days, and the massive market leader APPL having lost 200 billion in market cap. 200 billion! – Poof…gone.
Earnings will likely disappoint, we’ve got seasonal selling ahead (“sell in may?”), tensions in North Korea moving higher, terrible employment numbers (again) in the U.S , and of course – and any number of “unforseen events” far more likely bad than good.
So…..Is it a dip or a turn?
Time to trade or invest?
I’ll have to leave it up to you decide the best course of action, as you’ve all seen my charts and read my views. Regardless of any short-term action ( as the possibility of another “pop higher” in risk always remains ) seriously….
If a broker/trader hasn’t picked a top, or the area to sell and book profits – what possibly likelihood would there be in timing a “scoop buy / dip” for a few more points?
For the most part – by the time retail is convinced the water’s are safe, the move has already passed – and you’re once again caught……buying the top.
But Bernanke said everything was fine. Just look at the stock market. All time highs means everything is good under the hood you know. You worry too much! Hes got your back.
He he he…..
I hope (for your sake) that’s sarcasm.
Bernanke’s money isn’t doing a single thing for the U.S economy (as seen via recent employment numbers etc) and for the most part, is parked on Wallstreet with a handful of his banking buddies. It’s not being lent (and in turn…being put to use in the economy) as proposed. QE is not working, if not for the sole purpose to prop up stock valuations, and the lie that is “the recovery”.
Eventually (and likely much sooner than many “choose” to believe) – the gig is up, short of even more easing (also coming soon) – and in turn massive inflation, further global loss of confidence in U.S dollar and system, and an all out meltdown.
For kicks….lets watch earnings and guidance for the first quarter of 2013….my bets – ugly.
Just wonder what is your take on the Yen after BOJ’s shock and awe, now it seems everyone and I mean everywhere you read people are short Yen and looking at that 500 pips rise in 2 days, they are certainly banking coins. Even today’s drop in equity cannot save the yen, another high in USDJPY. Next week will be telling and I have a feeling the USDJPY pair will be on quite a roller coaster ride, just look at last night, when the JGB crashed, Yen rose….will risk aversion have any effect on the yen at all after the BOJ??? or like everyone said YEN is facing a cliff diving..
Is it a dip ( trend pullback) or is it a turn (trend changes) ? emmm … hard to answer, but global financial mood seems in RISK-OFF mode. And looking forward and 360 around us there’s geopolitical tension (a.k.a north korea and others) , add that with the Fed QE5. Me preparing to sell aud/jpy, nzd/jpy, cad/jpy ( SELL comdoll vs safe haven) and buying aud/usd, nzd/usd and sell usd/cad.
Not quitely sure this is the right thing to do. Kong … come, please
I don’t like your words ‘GONE’ … he..he
curious what you think, from what you are planning to trade, it seems if the markets are in risk off mode, you plan to long yen and short dollar?
I would love to see JPY run out of steam (to the downside), and give it another shot long – in looking for a correction in risk which “should” include Nikkei taking a break , and JPY moving up BUT…already took a shot pre BOJ announcment and was hit for 2%. This is an unpresedented move in Forex and in my view “has to correct” to some extent.
And yes…Im currently short USD and will look to continue with this into next week.
As far as markets have come, and as “bad” as things actually are out there – there is still one problem with this, as “fighting the global printing presses” is in all……not an easy trade. I’m forced to trade relatively small, and have to be ready at a moments notice to pull the rip cord a while longer.
when risk off still intact, not sure how to trade safe haven vs safe-haven (a.k.a USD/JPY), and usd/chf ? Seem to sell usd/jpy is better choice ’cause japan debt mostly owned by its citizen (than USA). Some question sir:
– is risk-off same with risk aversion (capital avoid risk and not care about return or yield) and is risk on = risk appetitie (a.k.a capital search for return and forget about risk) ? (i ask this because english not my nature and different trader often said different words with same meaning)
– when capital flow in risk-OFF mood, then BIG money will flow to safe-haven currency so we follow them to buy JPY/USD/CHF againts comdoll ?, and
– when capital flow have risk-ON mood, then we just buy comdoll against safe-haven ? is my understanding correct ?
thanks Kong for your fantastic blog
Great insights and understanding here Tim.
Fantastic work.
know the downside price of the trade before placing the trade.
Short aud/usd and short usd/cad dont match your usual trade plans. Short aud/cad then? Bearish on aussie?
Totally bizzare yes Nfx – as I’m really just trading a couple shorter term charts and keeping a little busy here this a.m.
The crazy thing is – AUD “would” be sold in risk off type scenario right – but the damn USD has risen along side of risk for weeks now too!
It’s wacky yes…but….AUD/USD could continue down, as well (oddly) USD/CAD could as well. I am considering a scenario here, where we may see both U.S equities AND the USD travel together. Nuts eh?
Just out of interest…..the AuD short got picked up – and the USD/CAD not so……
There ya go!