Everybody and their pet rabbit, thinks they can get out of long positions at the
top … they can’t and won’t … not every dog gets to ride on the firetruck, and
markets are no different … I said many moons ago that Spicoli, over at the FED,
could not afford to let the world’s largest bond market [that would be Japan] go
tapioca, and see USDJPY go ever higher … not just cuz the BOJ Apparatchiks
are fucking insane and let USDJPY go orbital on their own, but cuz a disaster
there means a disaster here … which is fine if it’s on somebody else’s watch, but
not if your the current FED Lounge Lizard Chairman … so, find a way to cut
rates, while at the same time explaining to the nutjobs over at the BOJ, that it’s
time to either adjust the yield curve control [YCC], or the whole stinking
“house of cards” known as the world’s financial system, is gonna go down, and
they with it … and in the blink of a couple of hours, 2 years worth of ever
climbing USDJPY FX rates, gets monkey hammered worse than a baby seal at a
Japanese whale hunt … “and no Skippy, you didn’t get out at the “top”, but your
“protective sell stop” did get filled at the bottom, so congrats!” … and it brings
home the concept of the term “proper fucked” to a whole new level!
You’d like to think the BOJ Gov [Ueda] who spoke and ushered in this new era of
Japanese saneness [maybe] on interest rates in their bond market and the need
for YCC tampered down, knew what he was doing and the potential damage it
might cause, and decided it was better than his predecessor, “Peter Pan Kuroda”
[I think I can, I think I can], and his thinking of “Fuck it, we’re going full retard
loose monetary policy forever!” … but then again, like all central bank Honchos,
their political Hacks, who got there by being … “well, political Hacks” … so it’s
not at all certain he knew or ascertained WTF he was doing when he did it … we
won’t know until late January [big BOJ Pow-WOW] when the BOJ discusses
rates outlook for 2024 … maybe he’s simply full of shit, and needed a stronger
Yen to “take care” of Japanese banks, life insurers, and big import/export
companies into year end … and at the same time, US markets are ASSUMING
RATE CUTS BY THE FED TOTALLING 175 BASIS POINTS! FOR 2024 … how the
Hell that happens is beyond me, so maybe Ueda uttered a few words to get
USDJPY LOWER [Yen higher] while the gettin’ is ripe, knowing for real the
fantasy land scenario markets are pricing is full stinking week old fish!
Which of course all leads to the most important EVAHHHHHHHHH NFP number
[until the next one] that comes today at 8:30 AM EST … WTF happens if the
math whiz kids over at the Bureau of Unicorns & Fairy Tales come up with a
“bigly & yuge” sigma miss to the upside in terms of jobs, would be quite the
“circus shitshow” for markets to deal with, cuz there goes your lower rates
story down the drain … and what would it mean for USDJPY? … Oy Vey Ira!
… time for “Arb Scalp-A-Rama!!”
Well, that escalated quickly didn’t it? … wasn’t even that big of a miss to the
upside in terms of jobs, coming in at 199K versus expectations of 180K, and all
Hell breaks loose in USDJPY to the upside, followed by another “monkey
hammering” to the downside … in terms of “arb scalping” it’s important to
remember 2 things … 1) “arb scalping” is defined as the “basis = price of
USDJPY @ COINEXX [or any other offshore house that has a very tight or zero
spread on the MT4 platform] - the price of USDJPY @ IQCENT” … so for long
positions in the “arb scalp” for USDJPY, we want POSITIVE “BASIS” … if I was
looking to establish short USDJPY “arb scalps” I’d be looking for NEGATIVE
“BASIS” … and ALL of our positions are done at IQCENT on their trading
platform, which is proprietary … 2) It’s not the m1 of the report or economic
release that’s key, it’s the minutes that follow THAT MATTER, and where you’re
gonna find “arb scalps” … the more important the release, the bigger the
discount or premium in the “basis” … that would be FED interest rate decisions,
NFP report, Consumer Sentiment], PMI & ISM numbers, PCE and CPI / PPI
inflation numbers, retail sales data, JOLTS data [help wanted ads], ADP [private
jobs report], jobless claims, any of Spicoli’s remarks from speeches and Q&A
after words, and/or testimony in front of the Clown College [both retarded
chambers] … and finally any & all releases of everything else that has “sigma”
misses [standard deviation misses up or down from consensus] … all of these
will fall between 8:15 AM EST - 10 AM EST, except for Spicoli’s speeches which
can be anytime … that’s why it’s important to check with forexlive.com under
their “Economic Calendar” to see what’s up for the day in the U.S. and/or
Japan, cuz you don’t want to be in any trade, “arb scalp” or not, minutes before
any release is upcoming.
That’s a lot of data flowing, and USDJPY reacts to it either slightly or bat shit
crazy [BSC] … and we end up getting a lot more “arb scalps” as a result over &
above anything that’s happening in crypto pairs … plus, USDJPY is the second
largest market in the world with about $1.5 TRILLION DOLLARS worth traded
every trading day … the largest is EURUSD at about $2.5 TRILLION DOLLARS
worth every day … and if/when EURUSD gets as active as USDJPY, “arb scalps”
will be there as well … they’re there right now, but aren’t as big as what we see in
USDJPY … another BIG PLUS is that leverage margin at IQCENT is 500:1 for
EURUSD, and 300:1 for USDJPY … I’m not your MOM, but when you’re buying
USDJPY 20 - 30 PIPS UNDER COINEXX [LP’s are a primary market] on upticks at
COINEXX, NOT DOWNTICKS, BUT UPTICKS, your LONG trade is about as close to
perfection as you can ever hope to get … so, choose your leverage on these as
you see fit according to your risk profile.
So now moving over to the largest, most corrupt casino the world has ever seen,
today we get NFP & Consumer Sentiment [both slightly higher than consensus]
… and we got “Arb Scalp-A-Rama” on steroids … and from the minutes following
NFP, through Consumer Sentiment, and onto the London Fix [NOON EST], it’s
non-stop “hunting” [no license required] … I will add that for those that desire
to trade USDJPY from the short side, the DISCOUNTS today [neg basis] got frickin’
OUTRAGEOUS at times, with -30 / - 35 PIP DISCOUNTS! … those lasted less than
a second, but they were there … and if you’re trading on a single screen, I use a
split-screen approach where IQCENT is the full page, and COINEXX MT4 is
minimized over it [see directly below] … I can see both markets instantly, and
when I click the buy button at IQCENT, the COINEXX MT4 immediately goes
away and I’m on the “My Trades” page with the liquidation button right there
… Easy Peezee!
The only thing that pisses me off about today, is the fact that at one of the lows,
a minute or two later we got a massive +30 PIPS in the “basis” as the
price of USDJPY at Coinexx started going up, and all of us [Me, “The Mrs.”, and
Miss Gimpy] hit the buy button … I get a “sorry, rejected order, try again” while
“The Mrs.” & Miss Gimpy get filled … 9 seconds later it’s 35 PIPS higher and they
liquidate … did you happen to hear the whooping & hollering over the horizon?
… WTF … next thing I hear is, “ready to hit the “spa” for a massage and then over
to our favorite seafood place on the ocean for lunch, followed by shopping?
… never seen 2 women move so fast making the reservations & then shutting
their screens, getting up, and leaving me and the dog sitting there looking at
each other like we’re 2 nobodies going stag at a high school prom! … 5 minutes
later they’re out the door, having made more money than the GDP of Zimbabwe!
… and while we can certainly get that over in crypto, it’s not nearly as frequent
nor is the crypto market anywhere near the size / volume / liquidity of USDJPY
… Hell, USDJPY is 100X+ bigger than crypto, so when you get a very fat premium
there, it’s like somebody just handed you a gold bar! … “thank you, come again!”
Meanwhile over in other markets, gold is getting “monkey hammered” again,
below 2K as we get past NOON EST … after a few days of “dead cat bouncing”
and now this development, I think for the moment the FED has won the high
stakes game of chicken between them and the ChiComs with that move to ATH
on Monday’s session … Spicoli knows there’s no chance in Hell of rate cuts in
2024 even coming close to 175 basis points, which “Wall Street” guru’s have
priced in for markets, and therefore selling gold makes sense to him up there in
the clouds certainly above 2100, but also 2050 … yet again, though, I’m pretty
certain there are a whole host of new gold owners that have gotten burned
… AGAIN! … always buying when price is skyrocketing and never when it’s
going down … this is the norm for gold owners over the last 50 years … crypto
drifting, and “Stock Bellies” looking slightly higher.
As I said yesterday, the PAMM will start in USDJPY come Monday … a shipload
of trades for “The Syndicate” … UP APPROXIMATELY 1.4% on light to modest
volumes … and remember, “arb scalping” also is available at IQCENT in
EURUSD, but given current conditions in EURUSD, meaning ranges & current
VIX, it’s simply not as good as USDJPY … also remember what I said about non
dollar crosses and how YEN dominates the denominator against every other
tradeable FX pair, thus making it the non dollar cross “KING” … EURUSD isn’t
the denominator in anything … we get these distortions in USDJPY, IMHO, cuz
the smaller financial institutions around the world, get orders from clients in the
local cross against the YEN as their clients do some kind of business with
Japanese companies or financial institutions there … obviously, they’ll keep the
local currency but have no need for the YEN after payment, so they lay it off to
the financial institution they do business with … these situations arise
constantly cuz it’s too expensive to do biz with Hellhole megabanks like JPM
and/or Vampire Squid [Goldman Sachs], and more than likely they hate the
“silk suit crowd” anyway … the financial institutions that get these types of
cross payment demands from clients aren’t interested in trading, their biz is
banking, and so they seek out LP’s like “Thompson Reuters” [the LP at
IQCENT] … they take their cut, and then put the rest out there on the platform
in the bid/offer, and BINGO!, BANGO!, BOOM!, the order gets filled in under a
second or two at the most, as traders like us jump in for the kill … how come
“Thompson Reuters” doesn’t take the whole thing? … simple: they are there as
liquidity providers, NOT AS TRADERS FOR PROFIT OR LOSS … IT AIN’T THEIR
BUSINESS MODEL!
Blog update on Sunday … OUTTA HERE … “The future’s so bright I need 2 pairs
of sunglasses 😎😎, and my own Brinks armored truck” 💓!!
… Onward & Upward!!
-vegas
