Dichotomy between market pricing and reality

[M.W.]

That is what I am trying to figure out. Has nothing to do with the fomc as the usd is not really strengthening against other currencies, in fact the dollar also sold off by quite a bit post fomc as the decision was perceived as much less hawkish than anticipated. Guidance on the dot plot was more or less in line with market expectations and the comments on balance sheet reductions were very vague.

BOJ does or does not "manipulate" currencies like any other established central banks in the west. What do you mean with "pump the economy".

What is the exact reason for the Yen collapse in the last 2 weeks? Is it Fed related or is the BOJ manipulating their currency again trying to pump their economy?

 

[SunTrader]

What are you talking about? I am not a technical trader. I trade currencies for fundamental reasons and the yen is fundamentally undervalued, heavily so. Does not mean I jump into a trade blindfolded against any of the current momentum. The entire point of the thread was to discuss the strong divergence between the current momentum and fundamentals.

Thank you for the valuable participation in stating the totally obvious.

Ok.

I'll just leave you with one final point, which is also totally obvious, market pricing is reality.

 

[M.W.]

Good grief, who stated otherwise? I have done this for over a 2 decades. I trade close to a billion in notional cash fx each month. Thanks for schooling me on the blatantly basics.

I stated an observation that has not occurred in a very long time. Yen is a heaven currency and has been for decades. A complete market dislocation and I try to understand why. Nobody spoke of buying or selling anything and nobody spoke of technicals or trends. I know what a trend is.

If you have nothing else intelligent to add then I thank you for your participation.

Ok.

I'll just leave you with one final point, which is also totally obvious, market pricing is reality.

 

[SunTrader]

Good grief, ....

Well said.

 

[murray t turtle]

What are you talking about? I am not a technical trader. I trade currencies for fundamental reasons and the yen is fundamentally undervalued, heavily so. Does not mean I jump into a trade blindfolded against any of the current momentum. The entire point of the thread was to discuss the strong divergence between the current momentum and fundamentals.

Thank you for the valuable participation in stating the totally obvious.

%%
EVER thought the market is sending you an important message?? Sure fundamentals win in the end, but looks you just proved why so few traders/ investors major on fundamentals= not fun

 

[M.W.]

Large successful funds always always trade based on fundamentals. They may time their entries or exits based on short term momentum but the profits they extract are almost always based on shifts in fundamentals.

I believe the yen sets itself up for a huge buy opportunity just as oil might struggle to top the recent highs and spx and ndx are both at the top of the lower highs made in recent weeks. Consumers are tapped out. The Fed now steadfastly believes in stagflation and acts accordingly but I believe history will show that they got it wrong. I am a firm believer that our economies are setting themselves up for a large upcoming decline and that will prove to be deflationary. But there is nothing the Fed can do much about because they are still near zero rates. Raising rates further will choke the economy and already consumers step back from entering into new mortgages. This will further widen the supply demand imbalance in housing. Commodities are always the last ones that top out late in a bull cycle. I would not be surprised to see oil collapse to sub 90 or even 80 levels in the upcoming next weeks to 2-3 months.

Timing is everything and it's too early to enter this trade. But it is setting itself up and one of the assets that will probably gain a fair amount will be the Japanese yen.

%%
EVER thought the market is sending you an important message?? Sure fundamentals win in the end, but looks you just proved why so few traders/ investors major on fundamentals= not fun

 

[murray t turtle]

Large successful funds always always trade based on fundamentals. They may time their entries or exits based on short term momentum but the profits they extract are almost always based on shifts in fundamentals.

I believe the yen sets itself up for a huge buy opportunity just as oil might struggle to top the recent highs and spx and ndx are both at the top of the lower highs made in recent weeks. Consumers are tapped out. The Fed now steadfastly believes in stagflation and acts accordingly but I believe history will show that they got it wrong. I am a firm believer that our economies are setting themselves up for a large upcoming decline and that will prove to be deflationary. But there is nothing the Fed can do much about because they are still near zero rates. Raising rates further will choke the economy and already consumers step back from entering into new mortgages. This will further widen the supply demand imbalance in housing. Commodities are always the last ones that top out late in a bull cycle. I would not be surprised to see oil collapse to sub 90 or even 80 levels in the upcoming next weeks to 2-3 months.

Timing is everything and it's too early to enter this trade. But it is setting itself up and one of the assets that will probably gain a fair amount will be the Japanese yen.

%%
MOST likely right on oil\ but for the first or 2nd time time his year SPY has closed above 50 + 200dm. I bought most of my real estate with APR of 10%.
DOW looks a bit weak , on weekly charts\ but i never considered that a benchmark

 

[M.W.]

Unless you just used a mortgage as bridge financing, most hold loans for around 20-25 years. I don't know current data. That would imply around 100% on the loan balance paid in additional interest for a mortgage rate of 10%. That's insane.

When you look at weeklies then all equity benchmarks looks like they are in for more weakness, consumer sentiment is in the abyss. Rising rates for the time being. Fundamentally the economy is completely stretched with all the supply chain issues still in full swing and not much improvement in sight. Toyota hardly gets a car out of its factories. Still no deliveries on most orders and we are getting towards the second quarter.

I would say we are in for a weaker market ahead unless of course the powers to be again manipulate the market as they have done since 2008.

%%
MOST likely right on oil\ but for the first or 2nd time time his year SPY has closed above 50 + 200dm. I bought most of my real estate with APR of 10%.
DOW looks a bit weak , on weekly charts\ but i never considered that a benchmark

 

[SunTrader]

https://asia.nikkei.com/Business/Ma...-asks-how-low-can-the-yen-go-and-will-it-hurt

 

[M.W.]

The financial media community slowly wakes up to catching up. Though the provided analysis is most likely incorrect. While higher resource prices definitely contributed the fomc and chances of 50bp moves definitely did not play a part in this. In fact a 50bp move was on the table and probably half priced in by the market pre fomc hence the sell-off in usd post fomc. If any currency should have benefited then it should have been the USD. Traditionally the yen is quite sensitive to 2yr and 10yr treasuries and they rose quite significantly but it's the current high risk geopolitical environment that has many traders gasping at the strong sell-off in yen.

https://asia.nikkei.com/Business/Ma...-asks-how-low-can-the-yen-go-and-will-it-hurt