Let’s Make Some Money – Market Musings

02/04/2013 by

The bear is starting to find its roar.

I just read a tech piece on USDJPY to potentially squeeze lower by a pretty good tech chap who just happened to have got most things wrong last year. Well, we cannot blame the chartists these days with the Intervention Mechanisms operated by central banks to keep things rosy.

My personal theory is that they believe if they maintain the calm, people will be lulled into believing the bullishness, turning it into a self fulfilling prophecy. People like myself.

The storm appears to be abating and who cares about North Korea’s antics and false bravado ? Who cares about the deadliest month in Syria ? Who cares about the bird flu deaths in China ?

An interesting piece from the Harvard Business Review sheds some light on the detriment trusting big data. I thought, likewise for headlines. A headline can change a bad China number into a good one. Instead of reporting that it was below expectations, it is deemed as expansionary in the wake of the previous month. And the celebrations begin.

My 3 week long struggle with USDJPY has come to fruition of sorts. We are at the 92 handle today, taking much longer than the week I had predicted. GOLD/EUR is also repeatedly testing the 1250 level, which is looking like the resistance.

Something in me tells me that my trump trade of the year could be the Gold trade. It is akin to the burning feeling in me Aug last year on the JPY. With Gold, it is the war of the central banks, the Printers vs the Print Nots. The Printers would have us believe that Gold is not worth anything to their print-out cash. The Print Nots does not want Gold to rally too much as they load up (notice China keeping quiet ?). There is not enough Gold in the world to back the paper Gold that we buy just as there are not enough trees in the world to print the US money supply on.

The markets are coming to a start soon, I believe. Disconnect between economic reality and valuations, coupled with heavy central bank involvement. The crisis of confidence has taken root and will soon spread its wings.

I am short S&P via SDS US, long Gold vs EUR, still short USDJPY for my target of 92 and looking to short AUD and long VIX. As for bonds ? They are not in the real world, they are in the Fed‘s world, a safe haven for only the right stuff.

Some thoughts on a rainy afternoon while waiting for my new Bloomberg account.

Dyslexic BoJ : Sell USDJPY short term : tradehaven

Major Risk Off Imminent To April : asianmacro