Good morning, $/JPY did a final push higher to 109.37 this morning before plunging suddenly to 108.61. Overnight, the higher $/JPY dragging NKY by over 2%, dragged European & U.S. indices higher too by 1%.  However, we got to realise that S&P500 & Dow are not representative nor leading indicator of general broad equities anymore with financials like Goldman & Apple dominating price weighted Dow & market-cap weighted S&P500 respectively  Why The S&P 500 And Dow Are Misleading Investors . It masked the weak price action across many stocks & prevailing soggy sentiments where on many days past 2 weeks, individual stocks had plunge 10-20% that we have seen in the recent earnings season disappointment in a number of tech & old economy companies. Disney fell 6% on earnings miss (and you wonder even with their nice slew of movies hits) Walt Disney earnings: $1.36 per share, vs expected EPS of $1.40 . Fossil Group also plunged 23% on their miss as well Fossil Group (FOSL) Stock Plummets in After-Hours Trading on Q1 Earnings Miss and we also had a bombshell halt of the supposed US$6 billion Office Depot merger with Staples that saw their shares plunged 26% & 9% respectively Judge halts $6B Staples, Office Depot merger; ODP shares plunge 26% . I suspect we have completed the retracement rally of 3 to 3.5 big figures higher in $/JPY last night/this morning from recent 105.52 lows last week.  I have added shorts in $/JPY as mentioned yesterday from 108.71 to 109.30 (*as recommended in establishing shorts at 109 -/+ 30 pips either side).  We have the U.K. Manufacturing & Industrial Production figures releases at HK/Singapore 4.30pm that may move GBP & GBP crosses and U.S. DOE Crude Oil Inventories release at 10.30pm that will move oil & the closely correlated stock indices along with it.  Good luck!

Good morning, the main mover from Monday that continued on Tuesday in markets was $/JPY that grinded higher first past 107.70 resistance level before reaching 108.50 last night.  It continued to 108.83 this morning presumably on further stops triggered on impulsive bad shorts in markets on $/JPY post disappointing 28 April BOJ meeting.  $/JPY has a tendency to retrace higher by 3 to 4 big figures after an initial plunge following BOJ or Japan disappointment over the past year.  We have seen a rally from 116 back to 119 early this year prior to BOJ meeting where the initial negative rate announcement on 29 January 2016 caused a spike to 121 before plunging to 111 by 11 February.  We then retraced higher to 114.87 by 17 February where it chopped around till 29 March falling to 107.7 before rallying back to 111.97 prior to 28 April BOJ meeting & plunge to 105.52 in the latest leg lower.  If there is a pattern, we should see $/JPY retracing higher to 109 -/+ 30 pips where these will be great levels to be short $/JPY again.  Overnight Brazilian equities & BRL plunged after effort to impeach President Rousseff appeared to hit a roadblock Brazil markets in disarray as Impeachment vote annulled .  This might weigh further on EM/Asia bloc as a whole from here as the strong risk rally from February lows for EM/Asia is in question now.   Interesting that billionaire investor Carl Icahn has turned net short in equities by 149% in disclosure by his vehicle Icahn Enterprise Icahn net short position of 149% .  We can be entering a period soon where they latest popular consensus positions in the market gets shaken out where players have gone long EM/Asia equities & currencies, short U.S. treasuries, long gold and oil, short USD especially against AUD and CAD in G7 space besides EM/Asia .. the recent USD rally is already sign of bad positioning  USD jump catches traders short . For the superstitious traders out there, Mercury is in retrograde on Monday 9 May & crossing against the Sun as well which is doubly negative for risk Mercury retrograde . Hang on & good luck!

Good morning, the U.S. employment report out last Friday was decidedly weak in job adds at 160k vs expected 202k in non-farm payroll U.S. employment report but with supposed signs of wage inflation that subsequently drove UST yields higher to 1.79% (10yr) with TYM6 spiking to 131-06+ before plunging lower to 130-14+ closing.  U.S. equities recovered from intraday lows as hopes of Fed June meeting on hold rose on this employment report.  We should be back to a range trading whippy market swinging from perceived further Central Bank on hold or stimulus hopes to realities of global economic slowdown that doesn’t change with any Central Bank actions.  China’s trade figures released over the weekend does point to continued doldrums China trade balance .  BOJ minutes out this morning reveals a sharp split over negative rates policy that show fatigue & uncertainty even among the ranks of Central Bankers over their policy ineffectiveness BOJ meeting minutes .  For now, sell $/JPY 107.50-108 & buy 106-106.50 on tight gamma trading.  S&P500 eminis rebounded from intraday lows on Friday at 2030.5 & should be capped at 2062.5.  There’s no fireworks but grinding trading this week perhaps till Fed’s Dudley scheduled speech on Tuesday 10 May, RBNZ Weeler on Wednesday 11 May & Thursday 12 May BOE meeting decision.  Good luck!

Good morning, post Mayday holiday in most Asian countries yesterday, we have Japan market close & if there’s a day when speculators wish to test downside in $/JPY with less threat of BOJ intervention, it’s today! 105.38 to 106.20 represent the levels that $/JPY rallied from since Oct 2014 when Abenomics took shape. It should provide support & will not be easy to break convincingly at one go if 101-102 is the final stop in this JPY rally. I’ve already covered shorts in $/JPY & NKY as the gap move lower post disappointing BOJ has brought them to the lower node in the bi-modal price distribution that I’ve previously discussed & risk reward is better in short S&P500, Dow or Eurostoxx50 for that matter. China Caixin Manufacturing PMI came out tad lower than expected at 49.4 & saw Asian equities ticked lower slightly. All eyes on RBA meeting decision at 12.30pm (HK/SIN time) & a rate cut is slightly priced in at 53% odds. Sell AUD on a spike to 0.7750/0.7800 is preferred on no hike or long GBP/AUD cross at 1.8840-1.8950 to ride on the market positioning of elevated GBP shorts (on Brexit fears) & AUD longs (on commodity rally).

Good morning, instead of FANG stocks in 2015, we might be looking at LEAF (LinkedIn LinkedIn earnings,  Expedia Expedia earnings, Amazon Amazon earnings & Facebook Facebook earnings ) now in short term where they all spiked more than 10% on better earnings & outlook.  Yesterday’s BOJ meeting that didn’t come out with anything new seems so distant now as $/JPY came off in jiffy from 111.55 to 107.36 with NKY from 17555 to 16120 presently.  While Japan is still mired in finding a sustainable solution to its problems, I’ve taken off all my shorts established in $/JPY & NKY as discussed earlier in week where we were clearly at the higher end of the range in our new bi-modal distribution world where prices gap between the 2 nodes and we’re now at the lower end node.  However, I’ve established shorts in Dow futures at 17950-970 past 36hrs before BOJ & added last night at 17910-30.  This is in addition to a broken put fly in S&P500 May20 expiry 2025/1975/1950 where it make sense for a 5-6% correction lower post earnings as players head towards summer in cleaning the deck.  Also managed to buy some GBP/AUD cross at 1.9050-65 yesterday in the correction lower from 1.9230 .. something that I was recommending looking at 1.8830 before the sudden poor Australia CPI figures 2 days ago caused the sudden spike higher &  1.97-1.99 looms next in GBP/AUD!