johangradin
Short

NIKKEI headwinds USDJPY CC

CME:NY1!   NIKKEI 225 FUTURES
350 12 0
The elections on Sunday, could very well be a buy the rumor sell the news type of event. The markets have priced in the postive outcome of a dramatic Monteray policy change to further easing. On a technical basis, the USDJPY             is the driver of the market, correlation is 1.0 with the NIKKEI 225             . so any selloff in the near term will obviously affect the NIKKEI 225             . This is however a near term macro + technical correction. IMO the USDJPY             will go alot higher, the base case for most Insitiutions are up to 100 in the USDJPY             . Who's going to gain on that backdrop? Japanese exporting companies.
Japan is in trouble... Longer NIKKEI hangs above 10,000, better chances of a big volatile drop.
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johangradin QuantitativeExhaustion
3 years ago
I agree. it's wayyy overextended at this point. Any bad news will be volatile.. Plus any other central bank easing in the word will att this point affect the yen imo. If ECB, FeD, BoE starts easing that would preassure the yen, if adding lackluster delivery on the hope that's prices in right now.. U got it, a big volatile drop.
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Personally...I hate trade on Holidays ( I actually don't..just watching). Holidays+Politics+ Christmas +New years+ December+Fistcale Cliff...= Market act like a drunk Russian after 10 bottles of Vodka :)
PS: I actually like the thing that everything going up.... 2013 will be the time, to watch for Shorts call :)
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johangradin Montreal Day Trading
3 years ago
Lol. I try to stay away too. I think 2013 is going to be a interesting and difficult year. Many of the correlations are going to break appart, and new ones will emerge, watching closely. :)
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QuantitativeExhaustion PRO johangradin
3 years ago
You think Eur/Usd correlation will break? That is probably the strongest since the market crash
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johangradin QuantitativeExhaustion
3 years ago
Not necessarily the EUR/USD, since it's such a large portion of the dollar basket. However, let's say for instance the USDJPY with risk on. And especially the AUDJPY with risk on.. I could see AUDJPY go up, with risk off. and vice versa.
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CaliforniaTrader
3 years ago
Japanese money supply continues to languish at very moderate levels, +2% as always. If monetary policy has indeed changed, you'd never know it from the numbers. The markets Nikkei and Yen) are either ahead of themselves or money supply is about to explode. Or perhaps both.
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johangradin CaliforniaTrader
3 years ago
Agree. Either or, the money supply and central bank action is frontrun so it's hard to tell.
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johangradin
3 years ago
Foreign purchases of Japanese stocks in December was JPY1.54 trillion, the most in about 7.5 years.
An interesting side note is that part of the funding for this has been in part made by selling of Japanese government bonds. That's according to the Ministry of Finance.

Japan is treading such a fine line however, you can't sell of bonds too fast here otherwise yields would go up and funding of the country that is so leveraged could blow up.. For now it's "ok".

Interesting to see what the BoJ meeting has to offer, two weeks left of manic price appreciation.
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QuantitativeExhaustion PRO johangradin
3 years ago
That is interesting
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QuantitativeExhaustion PRO johangradin
3 years ago
Maybe the BOJ is active in the Nikkei market
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johangradin QuantitativeExhaustion
3 years ago
That is yet to bee seen. it's an interesting notion! :)
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