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”.

9 Responses

  1. kalahari August 19, 2014 / 6:24 pm

    I know you keep on beating the same drum but there are none so blind as those who cannot see.. don’t want to be left without a chair when the music stops Thanks for sharing yet again.

    • Forex Kong August 19, 2014 / 6:40 pm

      You’ve got to appreciate the time lines I work with.

      It’s obviously difficult to “see this in action” when an entire 6-7 months have gone by with little “actionable result”.

      What short term traders and the majority of investors / traders don’t fully grasp is “how long these ships take to turn”.

      Central Banks and Institutional Investment don’t turn on a dime….if you can imagine “billions of dollars being moved” as opposed to the average American arm chair investor and their 2k gambling on Apple.

      It takes months and months to move the needle as to “not move the needle too quickly” and essentially create a trade that is ” trading against itself” ( Imagine if a major Central Bank just went “all in on a single trading day” – markets would be rocked! )

      It’s “small orders over time” that build, to create the ultimate position prior to the move. This is how it’s done.

      You need to be selling when everyone else is buying ( so for the last 6 months thats exactly what “I” and the big boys have been doing ).

      For most….it’s just too “big picture” to make any sense of.

      This is the fundamental difference – defining “retail investors”.

  2. Gary August 19, 2014 / 10:02 pm

    If we can all agree that stocks are in another bubble…. then I think we have to have the final “stupid” phase where everyone piles in. We haven’t seen it yet but maybe it’s coming as we move into the end of the year.

    • Forex Kong August 19, 2014 / 11:24 pm

      Trade it like you see it.

      Who am I to argue with that.

  3. Joe August 19, 2014 / 11:25 pm

    See you at 110 UJ, Kong… I think you’ve got it wrong here…like the EUR and GBP calls, but USD is super bullish fundie & technically… UJ has been consolidating and the direction of least resistance is the continuation of the trend. Don’t fight the Fed!

    • Forex Kong August 19, 2014 / 11:29 pm

      Capitulation type selling in EU currencies and continued USD strength a real groaner here – no doubt.

      Trades are trades. We don’t get married to them.

      Don’t let a couple days trading pull you off your larger “macro” view.

      • Joe August 19, 2014 / 11:36 pm

        Do you really think Yellen will surprise the markets and deviate from her slightly hawkish, tightening message and risk upsetting the markets? I think she is fine with seeing S&P crack 2k+, bond yields continuing to fall, commods getting crushed while USD can do its thing all it wants… basically the status quo. Talking about your macro view, USA is doing better than anywhere else basically, simple as that so USD will remain strong while every other economy is crap and CBs are running their printers much harder…

        • Forex Kong August 19, 2014 / 11:42 pm

          I consider that Yellen / Fed “should” provide investors with reliable “guidance”.

          At this point…considering that QE winds down in just over a month…the “responsible thing” would be to give the average guy at home a little warning. That’s about as far as I go with the debate.

          Will she? Will they?

          Will markets “pivot” on whatever comes from Jackson Hole?

          I write. I trade I win…..I don’t read minds.

          What possible difference would it make to me if “SP cracks 2K?” A debate of what?? A couple days trading?

          It would make absolutely no difference to me if SP sees 2025.

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