Blah, blah blah……as once again The U.S Fed and Bank Of Japan keep markets on their toes.
Tomorrow we “should” hear from both, which sets up a pretty tricky scenario if you are thinking about placing any trades prior to the announcements. That’s not how I roll, although…….I am still holding every single trade entered like – 10 days ago.
Conviction is great, as I am 100% certain that The U.S Fed will not be raising interest rates this close to the election but we can never EVER count on The Bank Of Japan to do what we expect. In fact…there have been several times in the past where The BOJ has surprised markets – big time.
You are aware that the BOJ and The U.S Fed have been working together on this “propped up market” for years now right? Taking turns cranking up the printing presses as to keep these fake dollars / yen rolling into markets?
This coordinated effort is widely known….yet poorly understood.
It would not shock me in the slightest to hear Japan “beefing up” its easing and money printing efforts in order to keep the balls in the air a while longer as…..Japan is deep DEEP in The Fed’s pocket.
If Japan pulls the trigger ( allowing The U.S off the hook ) expect markets to rally…..otherwise…we continue flat across the top. Flat across the top until the elections are out of the way…then down.
Further currency trading prior to tomorrow’s announcements is plain stupid.
Sit tight….wait and see what shakes out.
amazing, the US$ continues to rise back to 96…..you would think the market would get ahead of the FED decision considering the 9% chance of raising rates, and buy it all up, but it isn’t……I’m wondering how safe the miners look here GDX…..
Wait until tomorrow passes…..you’ll be able to buy miners from here on out …but dont look at it as a “trade” here…..it’s a prime time / area to start dabbling as “an investment”.
Screw the short term price flux…..USD down and miners up – very clearly seen in long term charts.
Just go easy! Small orders……over time!
Tomorrow is a big day. All dollar bears will be crushed. I feel almost sorry for them 🙂
With respect to Japan – a big day….you bet, and in turn…the effect on global markets.
US plays no role in tomorrow – neither does USD, as the gong show continues.
Japan is far more in focus ( for me at least ) than the U.S…but then again….it’s been that way for years now as I watch Japan far closer.
Let’s hold you to it Nymen.
If you are wrong about tomorrow…what say we make a deal?
You’ll start contributing here in a “positive manner” and ditch the competition/idea bashing. Cool?
I’m just another guy out here like the rest of you….
We all wanna win ma man…
I feel I am contributing. I give other point of view, because you use words like “never”, “impossible” etc. too much for a trader. Newbie’s might not understand it properly and bet too much.
As for a deal, maybe you could register your account on fundseeder.com, so anyone could independently validate your track record? That would surely boost your credibility, at least in my eyes.
Keeping in mind this is a silly free blog. Please keep in mind…..my posts are personal, quite personal actually.
Take it for what it is……
I am not the remote bit interested in justifying my trading / thoughts / views / opinion – zip / nada / nunca / never so…..we can kill that right here right now.
Have some fun man….go crack a beer / chill.
I’m cool with my cred or lack there of.
I will sure have one. I must say I really enjoy your “silly blog” and I find your entries really helpful as long as I ignore one’s regarding $ 🙂
Have a good day and keep up good work!
Right on Nyen.
Thanks for the continued support here. I DO appreciate it!
today’s price action in USDJPY today suggests that it is the BOJ intervening in the currency markets again.
My question is: as long as there is someone else on the other side of the trade buying yen, they could in theory keep selling it and buying USD. So what could actually stop them in practice? The Fed?
Your question is unclear.
The price action ( to me ) suggests that markets are not thrilled / satisfied with Japan’s move, and that USD/JPY is being sold. This fits my projections here perfectly as Yen will rise as markets and risk tolerance wains.
USD/JPY moving down is a sign of USD being sold ( as suggested ) and funds being returned to Japan ( repatriation of funds borrowed at 0% ) hence JPY rising. No one really wants to buy Yen ( as Japans economy and currency are in about as bad shape as it gets ) – This is just money flowing back to Japan that was originally borrowed at 0% and then converted to USD in order to buy U.S stocks.
Posted that comment right after the BOJ announced that they would target yield curves.
If you look at the price action, JPY dropped to around 101 levels before suddenly shooting up to 102.70. Subsequently, there was downward movement in USDJPY that occured as the day progressed — probably due to the market’s lack of confidence in the BOJ’s ability to keep the yen weak.
My guess is that the BOJ intervened in the currency markets right after the announcement since the upswing was pretty violent. My question was whether you believe that they were intervening in currency markets, and if you do, how long would they be able to fight the market? That question, however, is now probably moot.
On a separate note: if the flow of funds is going out of US equities as you suggest, then I would think that we would see a drop in USD inversely proportionate to the rise in the yen today (people sell off their equities, then need to change their USD to yen in order to pay off the loans.) However, the DXY has remained at levels that are still high relative to the drop in USDJPY. Am I missing something here?
Missing a few things yes….no intervention as the move would have been far larger / volatile.
DXY is a basket of currencies so you dont see the move as blatantly as the pure play USD/JPY.
Thanks for the follow up. I’ve been trading currencies for a few years now but mainly on TA. Have recently been trying to wrap my head around the bigger picture and also cycle analysis.
Also, let me know if you’re still planning that trip to Chile and whether you want some suggestions!