Nikkei Down -638 Points – Long JPY Trade Is Gold

The Japanese Stock Market ( The Nikkei ) is now down -638 points as Americans start “waking up”. China has cratered.

How are the long JPY trades going? – Absolutely golden!

The relationship between “risk appetite” and The Japanese Yen ( JPY ) has never been more clear, as short trades in AUD/JPY, NZD/JPY, CAD/JPY and USD/JPY have produced some 5-600 pips in only a few short days.

USD trades remain flat, as the continued concerns about Greece keep EUR ( the polar opposite of USD ) in a continued state of flux/confusion.

This is not about Greece. It’s about China. It’s about global appetite for risk…and it’s about the big boys making a speedy exit with profits in hand, as The SP 500 “continues” to make lower highs and lower lows ( the definition of a down trend ).

This is certainly not over. It’s not a dip to be bought, as we’ve been on the other side of the mountain for days now.

Protect yourself, as I “remain” short risk.





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… 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”.

Fukushima Exposed – Tuna With Two Heads

After years of obfuscation and, simply put, lies; TEPCO has admitted in a new report that more nuclear fuel had melted at the Fukushima nuclear reactor than previously stated. While this is dreadful news, it gets worse, as the report further confirms that despite Abe’s promises and TEPCO’s state-funded efforts to build ice-walls, it may miss an important deadline binding it to clean radioactive water stored inside the Fukushima nuclear plant.

Bloomberg reports officials commenting “we are doing everything we can do,” but it appears, that is not enough as tens of thousands of tons of toxic water are expected to remain at the site by the imposed deadline.

Get the rest of the story here or “oh I dunno” maybe start looking ito the “reality of this disaster” yourself.

You still haven’t got short Japan? EWJ ( as suggested a couple days ago ) clearly moving lower.

More here.

Markets On The Cusp – USD Shakeout

We’re looking for a stronger dollar these days, as the reality of continued Fed tapering and a generally disappointing earnings season ( in my opinion ) begin to take their toll.

As we’ve discussed here in the past, the general effect of tightening the money supply “eventually” leads to higher lending rates/increased borrowing costs, pinching corporate earnings and pressuring stock valuations.

I think it’s fair to say we’ve most certainly seen the “mojo” taken out of the “momo” stocks in the tech sector already, as well the $BKX Bank Index ( which I follow as an additional “bellweather” for U.S Equity strength ) as it “continues” to on its path of “lower highs” and “lower lows”.

Via currencies I’ve been positioned “generally short” for several weeks now seeing AUD/JPY top out around 94.50 as well The New Zealand Dollar finally rolling over. CAD took its last breath here in just the past two days essentially “completing the trio” of risk related currencies to begin their journeys downward.

Pushing through the last remaining day or two of chop in USD, opens the flood gates “wide” to a plethora of excellent “medium term” trade opportunities long the safe havens, and short the commods.

My expectation is to see The Nikkei ( The Japanese Stock Index ) continue to lead markets “decidedly lower” ( and I’m talking like….Nikkei at 11,500 now at 14,500 type lower ) as the general lay of the land has obviously already shifted to a “risk off” / safety seeking environment.

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PinBar Anyone? – Nikkei Continues To Lead

You may scoff.

You….. there in your ivory basement suite. Wading through piles of overdue bills reaching for the phone – only to be greeted “once again” by your local collection agency.

For a while there, you fancied yourself a “stock trader” and perhaps “financial blogger” too but…the dream has now faded, and the stark reality of your situation clear.

You are 100% hooped.

Was it the Fed that got you? But I thought they had your back?

Or maybe it was those damn “high frequency traders” on Wall St. But…I thought you worked on Wall Street?  How on earth did you ( such an astute investor ) manage to get yourself trapped, and leveraged to the hilt – when the warning signs where so clearly seen via The Nikkei?

Oh yes…that silly Japan. It’s not “America”!! How could anything going on “over there” have any possible impact on “us!” Us Americans!

Silly silly……Wall St wanna be’s.

A pinbar to the abdomen I say! A pinbar to your right knee!

Nikkei gonna show you the way – DOWN.

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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.


Japan To Raise Sales Tax – Consumers To Slow

Brilliance out of Japan as we see the country’s standard “sales tax” raised from 5% to a staggering 8% here for the beginning of April.

This is very likely going to cause a considerable downturn in consumer spending for the coming quarter as the BOJ finds itself “ounce again” in a very precarious position.

In April 1997, when the government last raised the sales tax, to 5% from 3%, consumption took a dive and along with the effects of the Asian financial crisis, pushed Japan into deflation and a recession that lasted more than 18 months.

Now after 16 months of printing money like there’s no tomorrow, an increase in sales tax hardly sounds like part of a “cohesive plan” but this is not at all uncommon in Japanese central planning.

It’s one step forward ( if you consider rampant currency devaluation a step forward ) and two steps back as consumers tighten their belts and plan to cut back on spending.

We’ll keep a watchful eye on the Nikkei as always, along with those pesky JPY pairs that still refuse to budge.



All Eyes On Nikkei – A Lower High?

The new high attained by The SP 500 this morning correlates well with a “lower high” area on the Japanese Nikkei right here around the 15,100 level, as well with the U.S Dollar “again” testing the 80.20 level in $DXY.

As we all watch our own specific indicators / indices to get a better read on “where things are at” in a general sense, it’s my thinking that these things line up quite nicely, suggesting we’ve come into a solid area of resistance/support.

Should the U.S Dollar “finally” make a decent move upward, as well the Nikkei put in a “swing high” here (and create a “lower high”) we’d likely see this move retraced, as well perhaps – find some clarity in the medium term direction.

A move lower in Nikkei would suggest “risk off” as well a higher Yen/JPY and likely ( although these days…you never know for sure ) even a higher U.S Dollar so I’m far more interested in activity “over seas” this evening then I am in today’s “usual wash / rinse / repeat”.

Keep your eyes on Nikkei.

…hey that rhymes.




Why Isn't Fukushima Front Page News?

I’ve learned everything, I’ve read everything – but I still haven’t “heard” anything!

What the hell is going on? I mean seriously!

We’ve got the Golden Globes front and center on a typical Sunday night here in the West, while a population of 13 Million people in Tokyo sit quietly unaware of the looming disaster only 150 miles away!

150 miles! Can you even imagine! A nuclear accident / disaster that makes Chernobyl look like a beach BBQ, and you’ve got an entire population ( not to mention an entire planet now that Japan has passed the laws “forbidding reporting” on the incident ) sitting in the dark!

Obama and the boys in Britain, France, Canada have sent millions in aid and stepped right up to help  tiny African countries work thru civil “disputes” ( not taking anything away from the horrors there in ) as well helped any number of countries through “national disasters” at the drop of a hat!!

How the hell can the entire world continue to turn a blind eye to what’s really going on in Japan?

It’s like sitting at home in Seattle, and the nuke site is in Vancouver – that close ( with winds blowing at a modest 6 km/h)…..and you’re not making plans to move????

Unreal…..we’ve seen more coverage of a “f$&kin cat stuck down a storm drain” than that of the largest industrial disaster known to mankind, let alone the largest impending threat to our human existence! Where are the news helicopters? Where’s the “minute to minute coverage” of the attempted removal of fuel rods etc?? Where’s the “evacuation plan” when ALL OF JAPAN needs to get off the rock?

How can this not be considered a “global event”? And immediately take the attention of the planets top ranking / thinking / experts in the field to “get their asses over there” and get this thing figured out!

I can’t believe that I will actually have to cross off one of the most highly anticipated travel / food / cultural adventures of my “proposed” future now knowing what I know.

I will never get to sit at “Nobu” in Tokyo and stuff my self to the gills with the finest sushi on the planet, and worse yet – I won’t be able to take anyone to enjoy it with me.

Japan now  – “officially” off limits.

Unreal. I am beyond sad.


No Taper – Never – More QE To Come

There is no possible way that the Fed is going to taper, and I find it to be completely irresponsible that the current “media blitz” in the U.S media is speaking of it  – as if it’s practically a given!

This is absolutely outrageous!

A bunch of floating heads reading a teleprompter, speaking as if they’ve some “authority” on the subject, rambling on and on and on,as to how the Fed’s “taper” is not “tightening”.

And you’re buying this bullshit?! Do you even understand the difference? Is there a difference?

It’s like this…..I can find a million different angles to illustrate the point, but in sticking with the “Japan is doomed theme” lets simply consider this.If the U.S Federal Reserve was to actually “taper” we all know the inverse / correlating effect it will have on interest rates. THERE IS NO WAY THE FED TAPERS WITHOUT INTEREST RATES RISING. PERIOD.

Interest rates rising in the U.S will put immediate ( and I mean “immmmmmediate” ) pressure on interest rates around the globe.

Boom!….Japan’s interest rate on outstanding debt rises to only 2% and BAM!

Full scale economic collapse / disaster / as the interest owed would exceed 80% of the government revenue, setting of a string of “economic events” tumbling domino after domino in this now “very global economy” we live in.

There is not a single chance in hell! The Fed is going to risk “global economic meltdown” by way of tapering, and “forcing rates higher” at a time when the entire planet is hanging by a thread.


This thing is so interconnected now that as we’ve discussed in the past – The U.S Fed has painted itself so far into the corner, that the only way to keep the dream alive will be to “increase QE”.

I honestly don’t know how the entire staff of CNBC as well CNN go home every night to their families etc – and are able to look themselves in the mirror with any shred of dignity, moral code or sense of decency.

It’s disgusting.