Some wicked end of month dollar flows, combined with horribly small European
range into the London Fix, all mixed together with some nasty sell stop action in
USDJPY, and after yesterday’s 20 year high over 131, USDJPY can’t hang onto
130, and has gotten beat up down to the 129.40 level … and this with 10 YR
Treasury rates higher today, hugging the 2.90% level … go figure … a brutal
WTF moment for USDJPY positioned longs, who yesterday were dreaming of
Lambos, and who cares what premium gas costs?! … let the worldwide
depression commence!
USDJPY a tale of 2 cities today … up until the last half hour going into the
London FIX, we had about a 35 PIP range for over 8 hours … that sucks and is
gonna lead to algorithm “false positives” cuz VIX is terrible … then into the “fix”
[somebody got fixed alright], it’s straight down into sell stop Hell and USDJPY
craters some 70 PIPS “el quicko”… and while the day’s range is more than
acceptable, it masks the deep and seriously flawed trading action most likely
caused by month end institutional dollar flows, and of course the scumbag LP
banks oh so too willing to fuck anybody and everybody and then buy the sell
stops in a heartbeat and within about 2 seconds we’re 20 PIPS higher … and
from there it’s a hasty exit into the weekend as trading action literally DIES
… now what? … scumbags, but we know that already.
Multiple algorithm buy signals today in USDJPY … TURNKEY PAMM DOWN
SLIGHTLY … collectively, down about 2 Happy Meals and a couple of large
drinks … not really important at all … got one “false positive” as Yen hit sell
stops, and that was unfortunate … overall though, fills were relatively decent
while market action lacked consistency … one thing I need to remember about
trading USDJPY, though, is that many times larger moves off of algorithm buy
signals require greater patience for them to “work out” optimally, and many times
quick scalps aren’t the answer … but whatever, overall I’m happy with latency,
fills, and general Yen movement as we head into next week, which is “FED week”
on Wednesday … could get unbelievably slow and choppy to Wednesday at
2 PM EST, where for the YEN, this might be the most important FED meeting on
interest rates in a very long time … time to play the poker hands and show cards,
and is the FED bluffing with “blah blah, yada yada” higher rates in spades, or do
they mean it this time? … once Wednesday comes and goes, YEN action has the
potential to really heat up.
My volumes have increased and will go higher from here in USDJPY … I like how
it’s trading, and its “fingerprint” in corrective activity when VIX is present, shows
itself well … if VIX can stay consistent, the algorithm is almost impossible to beat
… if shit dies and lays down like today, where we get the “30-ish PIP sickness
syndrome”, then it becomes like flipping coins … make a little, lose a little, geesh
what a frickin’ mess! … given the rate disparity evolving now, I don’t foresee any
kind of Summer slowdown where the financial world simply says, “surfs up!” and
everybody heads to the beach … sure, could be wrong, but my estimate of where
matters stand makes this Summer one Helluva lot more volatile than what we’re
used to … we’ll see, and it starts in earnest this coming Wednesday.
I’m not surprised at 20 year highs in USDJPY, nor some pulling back after it
happens … what I’m surprised at is the ease of decline in USDJPY, right through
130 like it’s not even there, and now here in mid afternoon of New York on a
Friday, seeing a new low for the day threatened with an already approximate
160 PIP range … could be a “stealth” BOJ operation to punish longs, as the BOJ
senses YEN repatriation flows here at the end of the month … dunno, but I find
the scope of the lower range today bigger than I thought it would be, with more
nasty downside action given the upside sky rocketing we saw yesterday … EXIT
QUESTION: “Are all of the longs already in the market long? … who’s left to buy
USDJPY before some kind of nasty correction? … wouldn’t be the first time in FX
history to see a major top / bottom in price before anybody is even close to calling
it or seeing it … and despite what you’re feeling, which is often wrong, that’s why
we have the trading algorithm, cuz it’s first priority is to keep your ass out of
trouble, and then go find profitable trades … 20 years ago, did it look like it would
be another 20 years to get back to the 130 - 131 level in USDJPY? … I can tell you
flat out, nobody but nobody was talkin’ it or predicting it … nobody! … keep this
in mind”.
And while EURUSD & GBPUSD were getting oversold as well coming into today,
it’s not surprising to see before a weekend some level of corrective activity … in
those 2 pairs it’s been mild to say the least … YEN much more nasty in it’s scope
… something to think about … new low for the day in USDJPY as more sell stops
get flushed out before the weekend … and while I have been thinking about this
for more than a couple of weeks, quite frankly I’m of the humble opinion that VIX
in FX is “breaking out” and going higher … mercilessly beaten down for years by
central bank planners and their BFF scumbag LP bank buds, at least since the
EURCHF debacle in January 2015, and notwithstanding the bullshit known as
BREXIT, I think the “FX VIX Genie” has escaped the bottle and refuses to be put
back in … this has profound implications for traders, especially from the
perspective of how you can trade FX for MAX profit … when FX VIX consistently
sucks, trading both sides of the market profitably becomes very difficult if not
impossible … for example, trading EURUSD or USDJPY, both from the long and
short side when the 20 Day Range MA is in the 40’s or 50’s IS A DEATH WISH
… double or triple the VIX and consistently keep it there, and it’s a different story
altogether … now based on some proprietary criteria I’ve developed [see the
trading manual when released], both sides can be traded equally … simply cuz
there’s movement in the market that can be effectively captured, and the
psychology of the trading action has changed from complacency, into one of
“man-O-man I don’t wanna get caught long or short when this shit gallops the
other way … time to cover and cut the loss!”
And given the discrepancy I mentioned before in terms of rate hikes / cuts
between central banks, it looks to me like VIX is gonna be elevated for a good
long while … throw in the Russia bullshit with Ukraine, and Europe’s big
geopolitical and economic problems go orbital … absolutely nothing is stable
here … NADA! … so in regards to EURUSD, OR GBPUSD, I think trading both
sides now makes sense … literally no reason to be “long only” … as for USDJPY,
though, I would beg to differ, cuz Kuroda and the BOJ is a “basket case” … with
crude set to skyrocket further, USDJPY going higher seems the safest bet on the
board, despite what happens day-to-day.
Blog update on Sunday … outta here … “The future’s so bright I need
sunglasses”!!😎😎 … Onward & Upward!!
-vegas
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