The Japanese Nikkei ( you know……my favorite right?) Is currently down -422 points – and it’s only lunch time in Japan. That’s a 2% drop in a matter of 4 hours trading.
We touched on it last week when I (once again ) encouraged you to take note of the currency pair AUD/JPY and also suggested The SP would fade, and China would sink.
I expect tomorrow morning’s open will catch your attention…not to mention “the crater in your portfolio”, as markets tank, Japanese Yen sky rockets and The U.S Dollar continues to tank.
Wall St. already dumped their dollars ( on you retail ) so don’t look to see USD going anywhere but DOWN along with U.S Equities. You can use tomorrow’s price action as an indicator.
EUR is solid as a rock as of this evening. You’ll understand it…….some day.
We are deep in the money all the way around with the same underlying theme….risk off = Yen to the moon and USD to the basement.
No one wants to hold U.S Dollars ( as they are continually viewed as “worthless” ) when risk comes off…..it’s like a big game of musical chairs.
“Down Dooby-Doo Down Down” – The music is ending.
Don’t be the last to take a seat.
Hi Kong,
Today’s price action (at time of writing) is showing a sign of major strength in risk markets.
USDJPY as well as audjpy recovered from it’s low to now trade at near days high. US equities on the verge of being green, a spectacular rise from it’s lows.
No idea who is buying risk despite the global uncertainty but fact is there is no fear today, certainly not in the US. Either there is major CB support taking place behind the scenes or there is a realization that Greece actually wants a deal and will get one but on their terms which is risk positive.
Let’s see where it ends today but a market that has a problem falling even 0.5% yet rises over 1.5% in a matter of hours from it’s lows shows this is a market where there is strong buying, irrespective of where it is coming from.
We’ve obviously been short risk for “several days” now and the trade is on fire.
I’m not even considering switching sides for several weeks to come, regardless of Greece getting some silly deal or not.
Down is the direction at hand.
Today’s move (certainly since US equities opened) has been nothing short of spectacular and certainly warrants caution against being too bearish.
Markets which are fearful do not move as bullishly as the way in which has this morning. If threat of Greece leaving is eliminated, could see all time highs again on US stocks. The issue will lie as to how much haircut Greece manage to get on their debt and which institutions will be affected. This is where CB’s will come in and propose major financing of sorts to keep these institutions well funded, akin to almost a local QE.
Have gone short again US indices when they turned unchanged, now lets see if after the gap fill, it goes down or whether it wants to continue higher.
Do your thing Madness….
Im long past “buying dips” as it;s clearly time to “sell the rips”.
I will add short on any strength over co
coming days.
If you read what I wrote, i did say I just sold again.
Again……just do your thing Madness. I still sense some bullish undertones so….take your pick! Up or down?! So it goes!
I think you’ve always mis-understood my tone. When markets go up, I call it up, when it goes down, I call it down.
This morning action was pure bullish, no one in their right minds would deny that. How long did it take to move up from days lows of -1.5%? 2 hours? That is bullish. Now if it is going to reverse, will pick that up.
Am not married to a position. Traders trade and are quick to change their minds. That’s why it’s called trading.
Go Madness!
Although I would caution….do you think The Nikkei down -427 is bullish?
It’s cheaply borrowed Yen that have driven this thing for the past year so…..seeing Yen “bottom” ( if that’s the case ) clearly puts us in the “risk off” camp.
I accept that Kong re. Nikkei and JPY.
But ultimate risk as perceived by the Western world is US equities and until these tank, risk off will always be contained. Just look at how they bounced yesterday – irrespective of how/who etc etc. We will no have a true risk off without US equities taking a hit and at present, they just have way too much support. Does it matter if the support is actual buyers or CB manipulation? No, support is support irrespective of where it’s from.
NIkkei took a dump yesterday but recovered almost half today. Let’s look at things from perspective. How much has the Nikkei rallied this year and the JPY fallen? A one day 2% fall is of little bearing. What we need is a sign of global concentrated selling. At present,, it’s all too controlled.
I look at where the “speed” is. How fast do markets rally as opposed to fall or vice versa. At present, selling is drip by drip, rises are supersonic. Until I see sign of this going the other way, I’m weary of being extreme bearish.
Yes, everything is in place for a major fall and when it comes it will be swift and I have my positions all loaded with sell stops to catch the trend as it falls. Commodity complex is falling hard. I mentioned oil would fall in to the 40’s again on one of your earlier posts a month or so ago and how I was loading up on short cadjpy which has played out nicely. And now copper is also adding to the commodity complex fall which is adding more signs of a global slowdown.
I still believe what we need is a major derivative book failing at a big trading firm and/or a major firm in the US that has gone broke due to excessive borrowing at zero rates for stock buybacks to make the hordes wake-up. These two will be the catalyst IMHO.
If selling starts to accelerate, especially in Europe, what’s the bet that the ECB will come in and add more QE which will act as a break? The CB’s now know this is the end game for them and they will not let this go easily. Let’s hope they fail and we do get a major correction.
Sold risk this morning after what appeared to be a nonsense move up in US equities – just a couple of contracts for now. Let’s see how it plays out. Will start to add more shorts on any spikes.