Bearish On Japan – EWJ As A Play

Looking at the Nikkei “pump job” this morning, as well JPY getting hammered,coupled with the sales tax implementation and latest string of “terrible data” out of Japan I’m about as bearish on Japan as one could be.

It doesn’t look like Japan is going to be able to do much more “stimulus wise” until maybe even July.

Get this……the government is also now telling residents previously living a short 20 km from the Fukushima Plant that it’s SAFE to go back home. SAFE?!


For those into stocks one could consider short plays on “EWJ” or even a couple ( tiny tiny! ) longer dated put options “short” late tomorrow or even mid-week.

As for us currency guys..the Japanese Yen continues to wallow, as the BOJ continues to do all it can to keep this boat afloat. I’m still waiting for a more substancial signal / move before trying “yet again” to get long JPY ( short of a few trades already initiated ).

Look for continued news / headlines and likely larger moves DOWN in the Nikkei Japanese Stock Market up around 15,000.


12 Responses

  1. Careydina March 31, 2014 / 10:35 am

    Oh no! Aud/Jpy continue wallow….

  2. Rob March 31, 2014 / 3:25 pm

    Hey Kong. First of all, thank you for the three posts earlier on how you approached the market the last 2 months. I am reading them, and digesting the info. I didn’t know whether to thank you on the previous posts, or your most recent one, so I decided here was fine. Again, thanks and I really appreciate your insight…

    Not that this blog is about me me me, but perhaps other noobs can share this aspect I found difficult to deal with:

    I found that as an aspiring trader I have this problem of feeling bad not catching moves that happened in the market, but the interesting part is, my strategy didn’t dictate necessary action to catch move…makes sense? So essentially i feel bad missing moves even if my strategy had me flat on the pair…was wondering if you know where I am coming from on this. Maybe you could shed some light on this?

    Also, agree on Yen pairs looking toppy at this point. The market has been so funky as of late, I am still waiting to get in on some Yen strength. More patience…more paint drying..

    • Forex Kong March 31, 2014 / 4:28 pm

      I used to think I was missing things too….again – a very normal thing when just starting out.

      You feel you need to “be in the action” every single minute ( if even to justify the fact that you feel you are “doing this for real” )

      This goes away after taking many losses attempting to catch every squiggle. You “eventually” start focusing on things “as a whole” and start honing in on the trade set ups / pairs / concepts that actually work for you.

      This takes time – so the best thing to do is to either just “observe” or maybe find a free account / dummy account to place trades and see how they turn out while you’re learning.

      If it means anything to you….I see opportunities/trades go by every single day in one market or another, but only concentrate on what I “know” works.

      A 100 pip “spike” is not an opportunity missed….it’s a bullet dodged.

      • Rob March 31, 2014 / 4:46 pm

        Wise words and more food for thought. Thank you sir, I am going to digest all you’ve provided over the last few days and chime in another time.

  3. slimpickens March 31, 2014 / 6:19 pm

    Kong, I know you don’t have a crystal ball but do you see any hope for my April 91 puts on FXA?

    • Forex Kong March 31, 2014 / 6:34 pm

      Damn……you’ll likely know in a couple hours as we’ve got the RBA statement as well as data coming out of China so…..

      No rate hike in Aussie land expected…but concern about the “wording” as per the usual Fed statement in the U.S

      Otherwise….China Manufacturing PMI out in about half an hour andd “should” move markets if it’s any kind of disapointment.

      Of course these days…..can I even say any of this stuff really even matters? Seemingly not.

      AUD looks maxed out to me…but of course I thought that some days ago so……tonight should be telling.

      April puts?? man…..a little tight but tonight should give you an answer.

      • Careydina March 31, 2014 / 9:38 pm

        The cash rate unchanged at 2.5 percent. what will be the next?

    • Forex Kong March 31, 2014 / 6:43 pm

      I quickly pulled it up and see it tracks AuD quite effectively so…..

      A horizontal line there at “93” looks pretty solid in this gorilla’s book.

      • slimpickens March 31, 2014 / 9:31 pm

        Thanks Kong……yeah, might have made a mistake with the Aprils…..wasn’t really expecting that gap above the 200 🙁

      • Careydina April 1, 2014 / 1:59 am

        And 1 question, how market react if market short 88% and long only 12%?

  4. Careydina March 31, 2014 / 9:40 pm


    Since there’s no rate hikes, and the continuing crisis in the Ukraine could see investors dump riskier currencies like the Aussie in favor of the safe-haven US dollar and JPY.

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