Thursday, April 28, 2016

The yen rally this morning is ridiculous

stupid traders sell usdjpy

As you know I have been bullish on the yen for a while and it has rallied for the past three months, but two weeks ago I said to sell it and we caught a nice, 400 pip profit going short.

This was all based on strategic, calm, trading and an MMT understanding of what was happening.

However, we just saw something earlier today that shows you why people lose money. The yen surged because the BOJ decided to keep monetary policy unchanged. So?

That unleashed a massive 300 point move down in USDJPY.

People trade like this?

Yup. And that's why you can make so much money, trading against emotional, clueless, fools.

The lack of action by the Bank of Japan does not change the fact that Japan is putting through a major fiscal stimulus. They "front loaded" all their public works' spending ot the first half of their 2016 fiscal year (Apr-Sep, basically). It's about a $110b equivalent of spending. And they are probably going to pass a supplemental budget to deal with the recent earthquake.

What does this mean? It probably means USDJPY goes back up again and the fools who sold this pair this morning, on nothing, will get their money taken from them. That's as it should be.

1 comment:

Ray said...

So if the dollar yen rallies again, then gold goes down? Or is that relationship out of the window.