It’s a “risk off” day, so say the “experts … rate differentials out of the limelight for
the moment, as attention turns to the “Spoos”, which at the moment are hugging
the lows overnight as the sun comes up in New York … and it’s either rates or it’s
“risk off”, that determine the flows … I guess the ChiComs make the call as the
day starts … and while “risk on” & rate differentials usually mean a rising
USDJPY, “risk off” usually means a lower USDJPY [YEN rallies] … and for the
34th millionth time, I’ll ask, “why is the YEN a “safe haven” currency? … it makes
ZERO sense.
Global recessionary fears are pushing the 10 YR. rate towards 3%, and the
“Spoos” aren’t reacting to “bad news is good news” … that’s a double dose of
bad news for USDJPY bulls, but so far while the rallies have been very tiny, there
isn’t much to the downside either [so far], and the day’s range at NOON in New
York is a paltry 113 PIPS, having just hiit a new low for the day from when it had a
range of about 90 PIPS … still pretty far away from its 20 Day Range MA of about
158 PIPS.
What makes the downside particularly dangerous, is the over extended rise
USDJPY has had over the last few months … parabolic comes to mind … how
many positioned longs do you think are still hanging around? … my guess is
plenty … cuz the problem is one of “execution” from the long side on days like
this … you simply have no idea how ugly the red spikes down can be ‘till you get
one that hoses you and leaves burn marks … minutes crawling up, down more in
seconds … and if you hit the button to liquidate cuz you just are seeing in real
time a red spike, you’re already toast … your fill will be at the bottom guaranteed.
Add to this clusterfark end of Q2 and month end are institutional flows where you
got no idea how ugly it can get … these flows can be “bigly & yuge” or they can
be light … you think the scumbag LP banks are gonna let you know first? … and
so, treading lightly here is the order of the day if you have any brains as a trader,
and USDJPY is different than the others cuz it can go with “Stock Bellies” ‘til
about 3 PM EST before it’s a good idea to give up the ghost ‘till the Asian session.
Looking at the landscape of FX dollar pairs, we got reversals all over the place
… one gigantic clusterfark of stupidity, aided and abetted with decent VIX and
“scumbaggery & fuckery” guaranteed this afternoon in New York after Europe
closes … “as a buyer of USDJPY, it doesn’t do me any good to see the 20 Day
Range MA hit [or come relatively close] in mid afternoon New York, or even later
… it’s too late in the day … either it goes higher or gets within about 10% - 15% of
the 20 Day Range MA before I deem buy signals statistically significant enough to
take … if I take them to soon, I open myself up to further downside with no
appreciable rallies unless it reverses and starts some kind of reversal day … and
today we haven’t seen that at all … there were opportunities, but at critical
junctures USDJPY didn’t swing around and go higher, it in fact went lower … so,
all you can do is sit and wait … maybe you get something, maybe you don’t, but
you don’t go after “coin flip” trades either.
Except for very brief moments, both the HULL 200 EMA on the m1, and the HEMA
on the 15s have been to the downside … at times sloping extremely negative
… and when you see that as a buyer, you have to put your hands in your pocket
and ignore buy signals cuz they will either be “false positives” or very short in
duration & scope … neither is good … sell it, or leave it alone.
Once the 4th is over, volumes will go up and my trading hours will extend into the
early afternoon of New York … no trades today in the EOM & EOQ FX flows … just
not a good day for longs, but fortunately we sidestepped this clusterfark … until
tomorrow.
… outta here … “The future’s so bright I need 2 pairs of sunglasses 😎😎, and my
own Brinks armored truck” 💓!! … Onward & Upward!!
-vegas
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