Hedonistic Trading

Idyllic Evening

I notice that Patience in the market is running thin and nearly on empty.

Market participants or rather, victims, all screaming for instant gratification for their trades. Greece must default immediately. EU Summit will disappoint. US jobs not good enough. We want QE, LTRO and more.

What happens tomorrow ? No one knows.

In fact, few people carry any trades overnight these days. Each day has become a routine in the past week. Wake up, buy some risk then fade it throughout the day into Europe open. Sell USD/JPY when it tries 80, buy EUR/USD into 1.25 then sell it down, doubling up when 1.24 breaks. Buy again tomorrow because everyone will be covering shorts, then sell before the Europeans come in. AUD/USD don’t touch because it is the only happy pair. AUD/JPY too tricky, just trade USD/JPY. EUR/AUD, only 1 way down. XAU/USD and XAU/EUR cannot break 1,625 and 1,300 convincingly, nor can XAG/USD break the 29 hurdle. Sell both on strength until market starts talking QE again.

Now we are left with basically a bunch of short term negative views, a dire lack of inspiration, confused economists who can only predict market pain and a huge void of any hope. Even Buffet has gone silent, Roubini squawking away, Soros and gang all critical while tight lipped on any investment opportunities. And I do not blame them a bit. There is no trade worth sticking your neck out for except for the next pain trade.

It looks like the market is going the direction of the journalists now. The headlines that make the difference because there is just too much stuff to digest to make sense of what is going on. And this is the headline I think we have not started to notice yet.

Japan to go broke by October? Standoff threatens to ‘collapse’ budget

Looking ahead is something nobody dares to do right now. But Big trouble in little Tokyo ?

I am still long USD/JPY. For 83, 93 and 103. There will be no instant gratification this time because I guess the market is not done with milking the life out of EUR/USD just yet.

7-Jul-12 Roubini With Ita/Spa spreads back close to highs, Germany vetoing Ebonds, ECB resisting QE, ESM/EFSF bazooka too small, EZ is back to extreme crisis
8-Jul-12 WSJ Doubts Emerge in Bloc’s Rescue Deal

Meanwhile I am reading that Chinese temples are seeking stock market listings in the midst of the Libor fixing scandal which is becoming a political issue.

8-Jul-12 Reuters UBS note deepens UK political row over rate-fixing

Here we go again on Monday.