Market euphoria has now lead to a complete and total collapse in volatility.
Volatility rises when people get scared. No one appears to be very scared as volatility is now at an “all time low” ( obviously correlation with markets being near all time highs ) – Get it?
Isn’t this about the time one starts thinking…hmmm….no one is scared, volatility at all time low, markets at all time highs….hmmm…..thinking, thinking….hey! Let’s start looking at buying some volatility around here!
Volatility Has Crashed
One can only assume we are getting very close to a reasonable bounce in volatility as – markets never change. Just when you think it’s safe…..boom – things head in the opposite direction.
Watch that Nikkei. Watch that AUD/JPY as well USD/JPY and add volatility to your short list ’round these levels.
A lil bit of UVXY here over coming days? I like it.
So many retail investors constantly searching for the “single metric” that “single indicator” that will Trump all, and provide the most valuable insight into the deep dark secrets of “mother market”.
Look no further.
The currency pair USD/JPY tells you everything you need to know.
USD/JPY at resistance
No need to draw any more lines / arrows on the chart as you can clearly see ( by looking back and identifying areas of previous support and resistance) – USD/JPY is now approaching “serious” resistance here around 112.00
This is a simple “bell weather for risk appetite” as….USD/JPY will FALL as risk comes off. From a purely technical standpoint – things don’t look good for bulls here.
Watch and see as the outcome from this week’s Fed meeting comes to light here Wednesday. You’d have to assume The Fed will again “talk down the dollar” as further appreciation will continue to kill U.S Exports.
I’m locked and loaded. Have you made your plan?
This set’s up time and time again when you’ve got the timing right. Gold is going to complete its correction here very shortly, and there are several “juicy trades” on deck. Every “wanna be stock guy” on the planet has this chart / set up on his screen.
Something interesting though…
The U.S Dollar “has bounced” against a large number of currencies but “vewy very quietwy” as The Euro has bounced EVEN more! This is not something you see very often and ( in my view ) is suggestive of some very VERY SERIOUS currency repositioning.
This is setting up for “crash like / waterfall action” in USD – and I would expect U.S Equities to follow.
I “could enter as early as Friday as this is a slam dunk. Risk gonna come off HARD next week.
Here is what you do:
Wait until you see gold bottom / dollar top. You need to “get ready and wait” as this one’s gonna help you pay for that big vacation you’ve been planning.
The FOMC meeting is early next week so I would not be surprised if we just bounce around ’til then. Get ready and wait…I’ll post specifics over coming days but this is the plan. This is gonna be a doozy!
I’ve sat out a few days and missed some pretty decent action in USD – as the slide continues.
This will continue for much longer, so I’m going to take a day er two here to let it breathe – then jump back in on the short side. The U.S Dollar is attempting to find a bottom, not only in an immediate sense ( having absolutely no luck ) but more so in an “intermediate / medium term” sense. Let me explain…
When you see a continued pattern of “lower lows and lower highs” on a daily chart / time frame you’ve got to understand….this is no small time trend. We are talking about weeks and week of a given asset falling lower, then lower than the previous low, then lower than “that” low until finally a much larger “intermediate cycle” completes. You dig?
The U.S Dollar will bounce here and likely bring in a large number of traders assuming this is a bottom. This IS NOT even close. Look for a decent bounce here on the 1H as a great place to re enter short.
That’s all I’ve got for today folks as I am busy busy with “yet another venture” so…watch for the bounce here in “risk in general” and get your levels checked/locked and loaded on all correlating pairs – set for another round of “short use trades”.
Bang on the money.
I bought JNUG at 6.80 yesterday afternoon, as well shorted USD/JPY and AUD/JPY. I took long positions in both EUR/USD and GBP/USD first thing this morning.
How can anyone imagine the meeting of Trump and Chinas President Xi being anything less than a total disaster?
April 11th I “believe” to be a full moon ( what you didn’t check your lunar cycles either? ) – I am very comfortable with these positions through the weekend and beyond.
It’s celebration time here so…..have a good one y’all.
As most of you already know, I follow The Japanese Nikkei more closely than American Markets as its my firm belief that we will see larger scale moves reflected their first.
The Nikkei has been trading completely flat for a whopping 16 weeks now ( 4 months flat as a pancake ) at levels that are starting to suggest that “a lower high has already been made” on a larger scale time frame.
Let me show you.
Here is the “weekly” chart of The Nikkei clearly showing the 16 weeks of flat/range trading which, unto itself isn’t really that big a deal.
Nikkei Trading Flat For Weeks
Now if we “zoom out” even further things start to look a bit more interesting as we start to put this “congestion zone” into perspective.
Here is the “monthly” chart of The Nikkei.
Nikkei Monthly Chart
It’s my feelings that The Nikkei actually topped “mid 2015” and that we’ve spent the entire last year and a half in “distribution mode” – with respect to the continued pump in U.S Equity prices. Japan’s stock market has been unable to share in the Kool-aide drinking, as cheaply printed Yen has flooded over to America, been converted to USD and used to buy stocks.
This is why you see the incredible correlation with U.S stocks and the currency pair USD/JPY ( bet you where wondering about that! ) as the pair rises when stocks are purchased and falls as stocks are sold.
I don’t see The Nikkei reaching for new highs but rather (and more likely) breaking thru support and moving along to create a very large / significant “lower high” on a monthly time frame. Things could get quite ugly from there.
This does not bode well for the “risk on trade”.
I too will be taking part….but of course – in my own “creative way”. Even at that “very cautiously”.
The U.S Dollar as well U.S Equities will now put in the long-awaited “swing low” ( if you don’t know what that is yet….please research swing trading ) so for those of you interested in pressing the long side in stocks – now would be your time. I have no individual stock suggestions as the vast majority are so ridiculously bloated, with valuations that ( to me at least ) make very little sense but….you can’t knock “retail euphoria”.
The larger question at hand begs….
Will the next leg in “risk” reach for higher highs before hitting the skids? Or……will we fall short / put in a “lower high” and roll on over for the larger scale “plunge” expected in coming months?
The current geo-political landscape isn’t exactly what I would call “stable” but how many times has that been the case where U.S Equities simply shrug it off…and the funny money just keeps flowing.
I’m immune to earthly headline / media disease and rely only on my “inter-dimensional time shifting machine” to guide me. I see retail money……must get retail money…must have MORE RETAIL MONEY! So……there it is in a nutshell.
Buyers beware. Stay tight. Remain vigilant. But feel free to jump out on the playing field and take a kick at the can.
What’s the worst that can happen?
By Megan Davies and Rodrigo Campos
NEW YORK (Reuters) – The Trump Trade could start looking more like a Trump Tantrum if the new U.S. administration’s healthcare bill stalls in Congress, prompting worries on Wall Street about tax cuts and other measures aimed at promoting economic growth.
Investors are dialing back hopes that U.S. President Donald Trump will swiftly enact his agenda, with a Thursday vote on a healthcare bill a litmus test which could give stock investors another reason to sell.
“If the vote doesn’t pass, or is postponed, it will cast a lot of doubt on the Trump trades,” said the influential bond investor Jeffrey Gundlach, chief executive at DoubleLine Capital.
U.S. stocks rallied after the November presidential election, with the posting a string of record highs up to earlier this month, on bets that the pro-growth Trump agenda would be quickly pushed by a Republican Party with majorities in both chambers of Congress.
Investors extrapolated that a stalling bill could mean uphill battles for other Trump proposals. Trump and Republican congressional leaders appeared to be losing the battle to get enough support to pass it.
Any hint of further trouble for Trump’s agenda, especially his proposed tax cut, could precipitate a stock market correction, said Byron Wien, veteran investor and vice chairman of Blackstone (NYSE:) Advisory Partners.
I expect markets to continue lower well into next week, as those who’ve not yet sold “freak out” at the last minute…then sell into the waterfall. Sound familiar? Stocks will bounce sure…so if you are holding now…you likely lose a few nights sleep but “its too late to sell now”.
How many days / weeks ago did I suggest to “raise cash” and look for another great entry opportunity?
Read the rest here.
I don’t leave money one table, and when looking at “the macro” hey – a trade is a trade “within” this framework.
I’m booking some 230 pips profit on a long and hard-fought battle/trade – long EUR/USD around 1.05
Markets suck and you know it. You think you’re right – but you’re wrong. I think I’m wrong and I’m right etc… This is no time to be a hotshot as the sky is cloudy, the water muddy, the day-to-day ( without question ) – unclear.
You need to be right “more times than you are wrong” – get it? If you are still searching for some kind of “krystal ball” here on the ol Internet well…..I advise you to stay tuned here, as well go visit your local psychic. This is likely as good as it gets.
Don’t get me wrong as I will never EVER apologize. If you go bet the farm with your piddly 2k trade account and choose to roll the dice – all power to you baby. Moving forward I will do the following:
Simply look to re – enter “short risk” when yet another grand opportunity arises..just around the corner.
Short USD, long EUR and JPY
Short AUD , NZD and CAD
Gold = hold.
Gold can kiss my ass……these long term trade ideas are exactly that. Long term. You don’t expect to get rich overnight but…..wait – Do you ever expect to get rich overnight?
Calm yourself newbies. Watch and learn. This is the big boys game.
Slow and steady wins the race.
Forex Kong Books Profits
Now that we’ve got that out-of-the-way ( the Fed’s sill little rate hike, and of course the nearly “not covered” debt ceiling debacle) we can move on. It’s time for more “mind bending macro market analysis” considering that these last few calls have been bang on the money. In short…..the U.S Dollar “plunge” shall continue, as both gold and The Euro continue to move higher. Further riches will be made with this simple concept burned into the back of your skull like a bad tattoo.
Let’s have a quick look at the weekly chart of my old friend AUD/JPY and refresh our memories, as to how this currency pair can help you gauge risk appetite with another simple concept.
AUD/JPY UP = Risk on.
AUD/JPY DOWN = Risk off.
AUD/JPY – Risk on vs risk off
You can see how AUD/JPY has been trading completely flat for the past 10-12 weeks as U.S Stocks have really only taken a small leg higher during the same period of time. U.S Stocks are always ALWAYS the last to go when risk appetite ( and the machines on Wall St ) switch from “buy” to “sell”. Always.
AUD/JPY has been up against very solid resistance for an extended period of time, and if “all was well” would surely have broken through, and climbed higher along side U.S Equities some time ago.
Such is clearly not the case as this currency pair has “literally” miles to fall. And fall it shall.
I am currently tracking this pair but not getting excited about entry “short” until I see a nice solid read candle and a decisive break lower. Even 85.00 and lower to truly seal the deal.
You see how this works right? I’m “tracking / observing” market activity with a pre conceived notion of at least two ( if not two hundred ) things.
- AUD/JPY ( a significant indicator of risk appetite in markets in general ) is trading in a range against significant over head resistance.
- A significant break lower should “clear the field” and is suggestive of a much larger shift from “risk on to risk off” across markets in general.
Eezy Peezy when you have a plan. Do YOU have a plan? There could be 1000 pips below this currency pairs current price.
Damn rights I’m still short USD. Damn rights I still own NUGT. Damn rights I’m killing it long EUR/USD.
Any questions today? I’m back in the saddle.