USD/JPY – A Disturbance In The Force

Finally! Something of significance!

If you take a look at two pairs such as GBP/JPY as well GBP/USD as a “control” – you’ll see that over the past few days of general GBP strength “both pairs” have been moving higher essentially ruling out any real movement in either JPY or USD.

Zooming in closer and taking a look at each of these pairs on much smaller time frames ( take the 15 minute for example ) you’ll blatantly see the “post Fed minutes” move has GBP/USD pushing higher and GBP/JPY falling off a small cliff.

THIS IS WHAT WE WANT TO SEE! ( Yoda may not ).

Yoda_trading

Yoda_trading

Suggestion that both USD as well JPY are finally moving “regardless of the currency they are pitted against”.

Obviously the same thing can be seen just taking a look at USD/JPY as  a pair unto itself but….in this case ( looking wider at many pairs ) we see clear suggestion that USD and JPY are moving ( in opposite directions) to  a much larger degree.

The Nikkei has also taken quite a “fast dip” here post Fed minutes so it’s pretty fair to say that markets aren’t particularly pleased with “something”.

Any bets on where The SP 500 and The Canadian TSX are likely headed next?

29 Responses

  1. r February 18, 2015 / 1:56 pm

    Haha i guess up for spx…since there is no selling pressure yet..it has detached from usdjpy

    • Forex Kong February 18, 2015 / 1:59 pm

      Keep an eye on it as this quick little move today in both JPY and USD manifest as something “different” than of the last few days.

      As long as we are getting all “cosmic” on this one….tomorrow is the “new moon” and generally brings about selling – wether people understand why they are doing it or not.

      The force is strong with you young Jedi Knight.

      • R February 18, 2015 / 2:05 pm

        Hopefully it is different. So far with usdjpy down, there is still no selloff in spx but a small ramp in usdjpy will result in a ramp in spx..until that changes, i still see mkts up

    • Forex Kong February 18, 2015 / 2:35 pm

      I really don’t know if there are any real buyers left so ya….this thing is so easy to push around.

      So we’ll see. It’s trading right…..pay yer money…take yer chances.

      • funske February 18, 2015 / 3:24 pm

        Its a no brainer. This is the last leg down (E wave) in the triangle so we go down a bit more and then USDJPY will skyrocket straight trough Kongs stops to new highs.

        What else is new.

        • Forex Kong February 18, 2015 / 9:09 pm

          I love how you chime in here when you think you’ve got the next move nailed down, but disapear for weeks on end when you are likely getting creamed.

          Stops are at 120.70 and I entered “days n days ago” as I’m sure you saw the post.

          Do the math jackass….I’m already fat in profit, with absolutely no risk.

          This is why I’m always early…..cuz I always catch the bulk of the larger moves “prior” – while short term “bozos” get chopped to bits.

          Feel free to post any of your brilliant trade ideas…if you even trade at all or let me guess you’ve just held long USD / JPY and are now down several hundred pips.

          Sounds about right to me. Perma bulls are so one dimensional. Good luck .

    • Forex Kong February 18, 2015 / 9:04 pm

      He he he….you’re good Dress.

      Gotta love good ol Yoda.

  2. karim ghaidan February 18, 2015 / 4:40 pm

    Both Nikkei and Yen will rise in tandem going forward.

    • Forex Kong February 18, 2015 / 9:15 pm

      I really doubt it Karim, but certainly don’t blame anyone for considering it.

      Nikkei is only a few points away from a “massive double top” at 18,365 going back all the way to 2007! ( check a long term monthly chart ) so…..this kind of level “should” provide some solid resistance near term.

      There is little fundamental reason for further rise in Nikkei , now coupled with a pretty solid “technical level” so…..

      We shall see!

  3. Jworthy February 18, 2015 / 9:44 pm

    Canadian banks start reporting next week. I don’t think too many people are optimistic…

    • Forex Kong February 18, 2015 / 10:20 pm

      $tsx look like it topped today / tomorrow in my view.

      • M February 19, 2015 / 7:55 am

        how about SPX and Dax kong? Do you think they have topped? I see many targeting 2150-2200 and Dax to 11200 easily before any correction

        • Forex Kong February 19, 2015 / 8:01 am

          That could amount to a single day ( ar maybe 2 days ) trading so….if that’s the number you are looking for sure.

          Frankly…as I place several orders over time around a given area where a potencial turn will occur – I don’t really sweat such small increments as you’ll never get it exactly right.

          The majority of traders “wait til the turn is made” then oile in and get completely hosed on the first pop it makes “after” the turn.

          I’ve learned to be there “before hand” and am generally already booking profits when the majority of newbies are getting smoked.

  4. madness February 19, 2015 / 5:54 am

    Bad macro data, poor earnings, over valuation of all risk assets, Greece crisis, Ukraine ceasefire not holding, oil down over 7% in two days.

    Despite all the above, US markets can’t even end down 0.5% on the day. This is not a sign of a market where we are going to see a substantial risk off. Price action is in fact stating the opposite. Market are looking to trade higher on any positive news (looks like Greece now providing it). Again, look how fast index futures in US and EU came up of it’s lows today. No fear. In fact, the fear is that of missing out on any rallies. There is no fear on going down as there is too much CB support. We are not at the stage where CB’s are powerless to do anything and until this becomes clear, markets will keep on making new all time highs.

    JPY doesn’t matter anymore and won’t do until the BOJ is forced to offer higher rates as a result of it’s bond market crumbling through lack of foreign buyers. Up until last June, audjpy would lead risk; When that indicator no longer worked, it was discarded as a barometer of risk on/off. Markets will keep changing the risk barometer to whatever serves it’s purpose.

    When the equity markets can make a 1% down day and keep below it, then we can consider risk off may have arrived. Until then, no correlation matters, no fundamentals matter.

    Observe something in any of the markets you follow. Observe how long it takes that market to fall 1% and then observe how long does it take that market to rise 1%. if the latter is far quicker than the former, this implies weak sellers and strong buyers. Since last year, falls of 1% in risk off have been hard fought battles whereas rise in risk on has been easy. Until this is reversed, we are still very much in a strong risk on market no matter what any correlation implies.

    Also observe how many times over past 30 days the market has closed up more than 1% compared to close down 1%. You’ll have your answer as to who is in charge. If you take DOW, so far this year, Dow has finished down 1% or more only 3 times whereas it has finished up more than 1% 10 times (would post the histogram if I could as it makes it so much easier). If you take 0.5%, Dow has only finished lower than this 7 times this year whereas it has finished higher than this 17 times.

    • M February 19, 2015 / 8:01 am

      Another take on this is that the big boys are distributing alot during these days.. They arent stupid to distribute when price is down, but use the indices to create an illusion that price is stablel and about to break out while selling to all the retails…

      • Forex Kong February 19, 2015 / 8:03 am

        Bang on…..the big boys have been agressively selling into this for months now.

        By the time she goes….they ( as well as myself ) will be taking profits while the general masses try chasing the move.

  5. M February 19, 2015 / 8:08 am

    Only question is how long more they are going to distribute haha… SPX and DAX, both barometers of US and Europe mkts are still going strong..

  6. madness February 19, 2015 / 8:11 am

    Lets hope so.

    But then the question is, if the big boys have already sold, who is there left to sell? Can’t imagine the CB’s who have acquired stocks/futures, will be in a hurry to sell so that only really leave retail and lets face it, what retail has is hardly enough to cause a tremor.

    Unless the big boys start to aggressively go short, or simply refuse to buy back at current levels, can’t see where the selling is going to come from. Most crashes occur when there is a mad rush for the door. If what you say is correct, who is left to exit except retail?

    I believe there will be an orchestrated “crash”. Perfect excuse then for the FED to engage in QE4. They certainly can’t do this at present with stocks at all time highs but they can when they are seen to be “protecting” the 401k’s of the US public,

    • Forex Kong February 19, 2015 / 9:07 am

      I totally agree about the orchestrated crash, and then implementation of QE 4 and my question these days is moreso “who’s left to buy”?

      100% totally correct. When the big boys algo’s shift to “red”, she’ll drop like a rock.

      Just need to get those last few retail in first….I can’t believe it’s still goin but….here we are.

  7. madness February 20, 2015 / 3:34 pm

    All bears have been totally humiliated and subjugated.

    Dow and S&P closed not only at all time highs, but finished near daily highs. Hardly a drop after the first hour of trading, not even on a five minute bar. This is very very bullish. JPY crosses gave up all their gains too.

    The buying we saw today, retail does not have the ability to raise risk like we saw across multiple risk asset groups. this buying was something else. bears better get ready for another poor year.

    Will not see the Oct 2014 lows again this year. Markets may drop between 5%-10% at some point but not until After April.

    US & EU Markets to finish 2015 up between 15%-25%.

    • Dress February 20, 2015 / 7:28 pm

      I disagree. 2015 will be a very tough year for the bulls. I expect the markets to be lower by year end.

  8. madness February 22, 2015 / 3:06 am

    Hi Dress,

    Fundamentally I agree with you however price action is what ultimately matters.

    This week it all depends on whether Greece’s “new” deal will be accepted or rejected. If the markets can get through this period relatively unscathed, then I can’t see what fears are left to drive it significantly lower. For me, lower is below the October 2014 lows.

    This year has seen a multitude of events, each capable of taking the markets down yet risk have held up spectacularly well. The past 3 weeks has not even seen a 1% down day and a 6% rise in major US stocks indices. Dax has risen 18% or so this year?

    Nineteen CB’s have lowered rats this year? How many more will continue to do so? Imagine if FED says negative rates and more QE? They don’t even need to do it, just imply it.

    People keep talking of a bond market collapse. Why would bond markets collapse if there is demand for safety? If money goes out of bonds, where will it go? It needs to go somewhere? How many funds have been left behind under investing in Stocks? if they finally do invest, this will then perhaps be the blowout high.

    When was last time FED ever did anything to upset the stock markets in the final year of a US presidency? In fact when was last time FED did anything to upset stocks? It’s the only thing they have left to prove QE worked, people feel richer due to their 401’s.

    If more companies use zero/negative rates to buy up their own stock, less stock available pushes prices up as there is lots of money chasing fewer available stocks, has anyone considered this? Then when things are about to collapse, companies will re-issue those stocks at much higher prices as there is “obvious demand” for them.

    As I stated, lots and lots of fudges are still available to drive up risks and stock markets.

    Past few weeks, I simply brought US indices and set a 1% stop loss below the initial buy price. Each day I have moved the SL higher as risk assets moved higher, am guaranteed 700 pips on the Dow alone and 80 handles on the S&P now. Am fortunate that in the UK, we can spreadbet where it’s possible to buy “guaranteed stops” for a few extra pips, can’t lose now.

    Making big pips but fundamentally I know we are (potentially) at blow out stage. We can either sit on our hands waiting for a crash that may never happen or we can initiate a trade we don’t feel entirely comfortable with but nonetheless makes sense in the current climate.

    • Dress February 22, 2015 / 8:37 am

      “For me, lower is below the October 2014 lows.”
      My call still stands! 😉

      • madness February 23, 2015 / 2:28 am

        Let’s hope so. Am tired of being 90% in cash and I have no real taste in buying risk at such elevated levels. It’s “annoying” that what little I have allocated to risk on has performed so well. But in absence of a real sell confirmation, what can you.

  9. Bulltill2020 February 23, 2015 / 9:44 am

    kong just dont get it all his post are selling usd and equities both are in a bullmarket till 2020 his dips will give him tiny profits while he gets blowed out on the big moves again. Now he is sitting like he said after entering for weeks on his countertrend profits offcourse he will get stopped out again or he gets smarter and take profit earlier

    • Forex Kong February 23, 2015 / 10:15 am

      Ridiculous – Bulltil2020 as you’ll need to look at GBP/USD some 400 pips off the bottom and now looking to break out.

      Then of course EUR/USD still trading flat but even still… a couple hundred up from the bottom.

      As well USD/JPY now 2-300 down from topping out so…..check your dates….check the pairs.

      Short USD looking even better and still better as the next few weeks progress.

      • Forex Kong February 23, 2015 / 11:20 am

        I’ll look to take “large profits” when $DXY / $USD hits 90 area.

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