It’s 11:07 a.m in Tokyo Japan right now, and traders are just getting settled in for the long week ahead.
Considering our “global market” as well the fact that Japan’s current QE program is 3X larger that of the United States – it goes without saying that I’m very interested in activity overseas. A quick look at Asian markets on Sunday night is a virtual “look into the future”, as equally skilled and experienced traders/investors evaluate the weekend’s data and start making their moves.
A current chart of the Nikkei ( I use futures /NKD ), compared to a chart of the SP 500 has both poking around at near term highs so….in that sense ( if you don’t choose to follow the Nikkei specifically ) you can imagine traders in Japan in nearly the “exact same position” as those on Wall Street.
Two separate governments, both with similar monetary policies, printing like mad with hopes they will “somehow” survive. Massive trading floors, big banks flooded with liquidity and a stock market “turned up to 11”.
In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S. Half the planet is already “up and running” devouring the news of the day ( perhaps U.S retail sales over the holiday weekend?? ) so…..what? Did you have some idea that U.S markets lead?
With a current QE program “dwarfing” that of the U.S I can assure you – in the current environment of “free money” and “print to eternity” Japan is the country to keep your eye on.
All those freshly printed Yen had to have gone somewhere right?
You don’t think the Japanese are smart enough to “jump onboard” the “bubble fest” currently playing out in U.S equities as well?
Please…….with a full 12 hour head start, I’ll see “trouble on the horizon” in Japan long before you’ve hit the snooze button.
Lol – So true Dr. Kong so true……. happy to see the EUR bounce here over the last several weeks – that one is just about ready for a break but just maybe not before we test $1.40 ? will be interesting to see….. CAD taking a beating even with the DXY forecasted here in my view to dive & test the $78.50 support level – time to short that pair?
uhmm. the Japan printing press probably going to euro, pounds or aud. Be my guest. The pound is better candidate
learn myself a lot here
hmmm non stop jawboning by the BOJ to kill the yen.. dropping like poo everyday
I’m watching the 16,000 level on Nikkei to get hit here today / tomorrow – and gauge the reaction of markets there.
It’s very clear that the Nikkei and Yen are trading inverse ( Nikkei higher / JPY lower ) so….short JPY traded is very one sided at this point, and that 16,000 looks interesting to me.
As well I’ve got the USD “bounce” here being exactly that…and will have it roll over pronto.
Will this finally be the USD / Stocks down and JPY up move?
Patience….as always patience.
I’m picking off a number of other trades in the meantime.
kong… I am not saying you are wrong one bit.. but how do you come up with the conclusion that the dollar is going down. I watch cycles with smt , Doc , and Likes money. I just want to know what you Measure things by?
So…let me better understand – these “other guys” are suggesting the USD is going up?
Huh…..well obviously the fellow at SMT “isn’t” one to watch as ( in my view ) his track record speaks for itself.
Otherwise….I don’t follow anyone elses analysis! Cycle wise….USD is most certainly headed down.
These guys “must” be saying the same thing no?
haha yes. I second the comment on SMT. Horrendous track record. Probably going to start a small USDCAD short later today.
My thinking is quite simple – the Fed will never stop printing, and the US Dollar will continue to fall.
It’s 100% impossible for the Fed to exit the bond market – no matter how much media hype / speculation suggests “tapering”.
Its 100% impossible for the Fed to exit. Impossible.
QE will be “increased” and the loss of faith in the U.S Dollar will continue, as China steps away from further reserves and future purchases of U.S Debt , Fed will need to “double up” just to keep the ponzi afloat.
The daily technicals will always be “what they are”, as my short term trade technology keeps me in the swings…but the longer term view “is what it is”.
How bout the massive “dowward sloping trendline” from May?
What about continued trading under the 200 SMA?
How bout a simple chart of the EUR being nothing but 100% clean and steady uptrend? Let along the Brit Pound “killing it” these past weeks.
How bout the fact that “even suggestion” of tapering sends the markets into panic…let along to actually “do it”. Not even a piddly 10 billion??
Nope. Cuz they can’t.
Perhaps these other guys don’t really have the “fundamental backdrop” but rather rely on simple technical analysis only – I don’t know.
dollar should be heading down into the 3 year cycle low. Its not a straight line and I bailed on gold at 1780 top at 1760 ish. I was and still am questioning if the 8 year cycle in gold is shot to hell. I was the first over there to ask about the 8 year cycle being damaged . I was told a number of things from all of them . I wont talk cylces here or refer to them. But if you have any respect for cycles I would look into Likesmoney.. He just counts the cycles, no trades recommended per say.
So you conversation here is talking about fundamentals. what I Want to know is what you use to Measure enter a trade… ?
My self; I am very strongly in the deflation camp. The crb proves that. If you want to throw some manipulation at me I will eat a little. I ( thanks to Jim Rickards ) I understand that we have deflation and The Fed is fighting the parts of deflation that support the banks. If gold shoots up from here I will be in shock, but I will be in . I will look to buy intermediate bottoms. I am not perma anything anymore. we are in a war. I want to fight the current loser. more like a mercenary
Like a gorilla! Trade like a gorilla!
This is exactly what I’ve hoped to pass along with my writings / views. Being “perma anything” will just get you cleaned out.
You’ve got to roll with these markets in a far more “nimble fashion” to survive, as both bulls and bears will be taken to the cleaners.
It’s “each to their own” as well as I can’t understand “deflation” at all.
Money printing is clearly “inflationary”, as the entire planet bands together to “inflate” away their troubles. So weather “we have deflation” or not – the current policies are most certainly “inflationary”.
This gets tossed around and can be equally argues from both sides – flip flop, deflation / inflation – It’s tiring really.
Consideration of an “8 year cycle” is well beyond me…as it’s not tradable, or even “investable” as…..the number of “unknowns” in such a time frame trump any kind of “analysis or speculation”.
I need to focus on time frames where I can readily make decisions and extract money from the markets.
Hi kong, are you looking at usdjpy to go down as weak usd strong yen? Strong move today
I usually don’t trade USD vs JPY but in this case…if / when the turn comes I will plan to spread risk across several pairs….based “solely” in JPY strength ( if it comes ).
These two currencies can both rise/fall together so….the question then becomes “which rises more”?
I’d appreciate a critique, Senor: http://www.safehaven.com/article/31983/weekend-reporta-look-at-some-currencies-through-the-chartology-lens
I’m not much for “all the triangles” and “a seven point rectangle reversal pattern”? Huh? – That’s a new one for me.
As I do razor sharp technical analysis as well……what’s interesting is that most of these “turning points” / areas of reversal can be explained via the fundamentals, as the technicals are merely a “product” of fundamental shifts in markets.
“morphing 6 point triangle”? Huh? another “new one” for me.
“Absorb what is useful, Discard what is not, Add what is uniquely your own.” – Bruce Lee
I like to keep things simple myself. I try to get an idea of what’s going on fundamental wise, and technicl wise I just tend to use the RSI (depending on the currency) and basic support/resistance levels.
Same here David – my charts are clean as a whistle short of piles of horizontal lines.
kong have you looked at the Mexican peso? big triangle getting very small. would you have any ideas on it?
Lookin at a pile of em on my coffee table!
Too bad about the peso as…..the currency pairs just don’t offer big moves.
I am wildy bullish on “all things” Mexico. You know I live in Mexico no?
I spend em……but I don’t trade em.
Where in mexico? I’m looking at buying into the yucatan Peninsula.
I’m your man…..
I’m in Playa Del Carmen.