While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
February 29, 2016
Fiat Lux
(SPECIAL PROGNOSTICATION ISSUE)
Featured Trade:
(WHAT IS THE CNN FEAR & GREED INDEX?),
(ORDER EXECUTION 101),
(AND MY PREDICTION IS?.),
(TESTIMONIAL)
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
February 26, 2016
Fiat Lux
Featured Trade:
(MARCH 2 GLOBAL STRATEGY WEBINAR),
(IT?S SAFE TO SELL SHORT THE YEN AGAIN),
(FXY), (YCS),
(RIGHT SIZING YOUR TRADING)
CurrencyShares Japanese Yen ETF (FXY)
ProShares UltraShort Yen (YCS)
I think we are at the tag end of the recent unbelievable bout of yen strength.
Triggered by the Bank of Japan?s shocking move to negative interest rates (NIRP), it has been driven by a massive unwind of hedge fund positions in everything around the world that were all financed by short yen positions.
The memo is out now, and the bulk of the ?hot money? positions are gone. After some fits and starts, I expect the yen to resume its long-term structural downtrend shortly.
If for any reasons you can?t do options, just buy the ProShares Ultra Short Yen ETF (YCS) outright. This is the best entry point in a year.
?Oh, how I despise the yen, let me count the ways.?
I?m sure Shakespeare would have come up with a line of iambic pentameter similar to this if he were a foreign exchange trader. I firmly believe that a short position in the yen should be at the core of any hedged portfolio for the next decade.
To remind you why you hate the currency of the land of the rising sun, I?ll refresh your memory with this short list:
1) With the world?s structurally weakest major economy, Japan is certain to be the last country to raise interest rates. Interest rate differentials between countries are the single greatest driver of foreign exchange rates. That means the yen is taking the downtown express.
2) This is inciting big hedge funds to borrow yen and sell it to finance longs in every other corner of the financial markets. So ?RISK ON? means more yen selling, a lot.
3) Japan has the world?s worst demographic outlook that assures its problems will only get worse. They?re just not making enough Japanese any more. Countries that are not minting new consumers in large numbers tend to have poor economies and weak currencies.
4) The sovereign debt crisis in Europe is prompting investors to scan the horizon for the next troubled country. With gross debt well over a nosebleed 270% of GDP, or 160% when you net out inter agency cross holdings, Japan is at the top of the list.
5) The Japanese ten-year bond market, with a yield AT AN ABSOLUTELY EYE-POPPING -0.08%, is a disaster waiting to happen. It makes US Treasury bonds look generous by comparison at 1.70%. No yield support here whatsoever.
6) You have two willing co-conspirators in this trade, the Ministry of Finance and the Bank of Japan, who will move Mount Fuji if they must to get the yen down and bail out the country?s beleaguered exporters and revive the economy.
When the big turn inevitably comes, we?re going from the current ?112.75 to ?125, then ?130, then ?150. That works out to a price of $150 for the (YCS), which last traded at $76.88. But it might take a few years to get there.
If you think this is extreme, let me remind you that when I first went to Japan in the early seventies, the yen was trading at ?305, and had just been revalued from the Peace Treaty Dodge line rate of ?360.
To me the ?112.75 I see on my screen today is unbelievably expensive.
Its All Over for the Yen
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
February 25, 2016
Fiat Lux
Featured Trade:
(WHAT HAPPENS WHEN QE FAILS),
(INDIA IS CATCHING UP WITH CHINA),
(FXI), (PIN), (TTM)
iShares China Large-Cap (FXI)
PowerShares India ETF (PIN)
Tata Motors Limited (TTM)
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