It’s not only the BOJ who’s bluffing, the ECB every day sends out Apparatchiks
to hawk rate hikes … the intention to keep EURUSD above par to the dollar … but
for the most part, it’s the insane BOJ that is bluffing TRILLIONS to keep yield
curve control [YCC] … and since they’re printing trillions of YEN to keep YCC,
they’re also the ones solely responsible for a depreciating currency … so, to
B.I. Itch about a rapidly falling YEN seems a little bit hypocritical given the
situation … and so here comes the huffing & bluffing, cuz if you print MOAR! to
intervene, you make the problem worse! … and the “market” [cough, bullshit,
cough] just keeps on heading higher … where’s the top? … 140? … 150+??
… who knows, it’s up to Spicoli to create a depression and take U.S. rates lower,
thus saving Japan from monetary ruin … it’s all they got!
And for those newer readers who discover the website, and are wondering exactly
what the trading algorithm is predicated upon, that’s easy to answer … markets
move, up/down who cares, only that they “move” [a/k/a “VIX” or volatility] … when
they move they “correct”, and then resume the short term trend … and that’s what
the algorithm intends to capture … and when VIX gets too low, there is no
corrective activity, simply going from one end of a small range to the other [a/k/a
“The Flying Wedge of Death” [FWD], which kills a lot of accounts] … everybody
knows this as “chop”, and it can kill an account cuz it gets people to buy highs
and/or sell lows and then cover at a loss multiple times … it’s why you have to
pay attention to the 20 Day Range MA I print every Sunday on the bog update for
the week coming up … for more, read the manual!
Moving onto today’s “Slots-O-Rama” in the world’s largest casino, not much
going on besides USDJPY … even “Stock Bellies” are slow & lethargic, as the
BTFD’ers aren’t quite as sure about rising prices as before, so they aren’t nearly
as willing to chase & FOMO price up the ladder … USDJPY surprisingly weak as
price touched the 137 level [natch … thus clearing out the spec buy stops at 137]
before backing off 30 - 40 PIPS [so far] … this is a new 24 year high for the pair,
and it comes as 10 YR. Treasury rates are moving lower [after being slightly
higher] … comments by the usual Lounge Lizards, including those from the ECB
& BOE, as they continue to hawk for higher rates … well, that’s what they “say”
… let’s wait and see what they “do” … just a scant few days ago, it looked to me
like the cycle high might have been put in at the 136.70 level in USDJPY, as the
10 YR. hit 3.50% before aggressively backing off down to right above 3.0%
… since then, it’s been a straight climb up for rates, but nowhere near 3.5%, so
the weakness in USDJPY somewhat surprising … and it tells you a lot about how
the YEN market feels about the BOJ’s “bluff” of “not gonna ever back off YCC”
… wanna make a bet?
Right now, USDJPY has a 20 Day Range MA of approximately 157 PIPS … today’s
range = approximately 123 PIPS [so far], so we’re running short about 20%
unless things pick up dramatically in the New York afternoon … most of the
session the “Trading Ratio” [TR = approximately 7 - 8.5], which indicates a very
good to excellent scalping market, and at least so far, the bid/offer spread hasn’t
been blown out, but has remained right around 0.3 - 0.5 PIPS … one of the
“problems” we’ve been facing lately in FX, is the growing syndrome of “lightning,
speed of light … crickets” in terms of trading action … today that’s EXACTLY
been the scenario in USDJPY … looking at the range for over 7+ hours, and a
handful of M1’s make up the vast majority of the day’s action … that usually
means somebody puked and puked hard in size, and when it’s done, the market
goes right back to “chop” … in other words, we get “TIME” corrective activity in
the market, but we’re not getting the proper “PRICE” corrective activity, and
today we see that in spades!
USDJPY has just backed off about 65 PIPS from the high, and it’s pretty much all
due to the 10 YR. rate going lower, now down to around 3.1% … somebody tried
to muscle it higher still, in the face of the falling 10 YR. rate, but it never turned
around, and that buyer has appeared to puke … this is a “theme” I can see getting
played out repeatedly over the next months, up & until the inflation numbers come
out and then we’ll see … if inflation doesn’t back off and start coming in UNDER
consensus pretty “Hoover Dam” soon, USDJPY has got a lot farther to go on the
upside before SHTF and “Thelma & Louise” show up.
Multiple algorithm buy signals today in USDJPY … TURNKEY PAMM UP
SLIGHTLY … volumes will increase here shortly, after the 4th Holiday on Monday
… Q2 and month end flows are keeping me at lower volumes, simply cuz they are
unpredictable and sometimes nasty … they haven’t been so far, as things have
been relatively orderly, but the m1 spikes from Hell [we had one earlier today] can
come any second when quarterly & monthly flows are involved … for all of our
trades today, we had excellent pricing & latency, so good job Turnkey LP’s.
Onto 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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