As a position trader quite often what’s happening in the world, different changes in the geopolitical and macroeconomic environments, kind of tell me “what’s next”. I’m a bit of an overnight warrior; I grew up with cats and they’re nocturnal. So am I and for good reason; it’s a big world out there and opportunities occur around the clock.
Just wanted to get out there before you wake up with what looks to be an emerging trend; the upside in the Yen versus the Dollar. This will be my second trade in the Yen. When it hit 150:1 against the Dollar I bought a bunch of 147.50 March puts and sold them when the Yen bounced and hit 135. It’s time to enter once again.
As discussed in last Sunday’s Tradrr’s “The Week That Was & What’s Next” we spoke of what’s coming this Friday. The new Bank of Japan Governor Kazuo Ueda chairs his first session. Inflation is far from being under control in Japan and despite promises to stay on the dovish side, it’s becoming obvious that changes to Japan’s monetary policy are in order; or if nothing else much more likely.
Monthly Yen Futures
I’m a long term futures trader so I start with the monthly chart. The Yen dropped to precariously low levels late last year and while beneficial to their exports, the rate of inflation has not tempered itself as anticipated. So what happens when a country, any country, tightens it’s availability of capital; the price of the underlying currency goes up. Hate to say it but it’s as simple as that; all you have to do is be aware of what might happen.
To summarize, I went long the Yen overnight, both the futures contract as well as some call options. It’s time for a “new broom” to sweep clean and it’s time for the Yen to move higher against not just the Dollar but all foreign currencies. The Dollar is the best bet as there’s a few other problems like the “Petro-Yuan” on the Dollar’s plate that make it more susceptible to a decline. Time will tell but currencies tend to trend. I’m not always right and quite often a little early so do your own due diligence.
Hope you enjoyed this post. I’m just a young 68 years old; my Dad became a broker when I was 13. It’s time for me to ‘give back’ to all of you what’s in my head. It’s not always pretty but it’s based on history . . . and history, unchecked, repeats itself.
Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at dzimmer@substack.com so we can further help.
Here’s one from The Red Hot Chili Peppers . . . yes there’s a few songs that weren’t released in the 1960s . . . careful what you wish for or I’ll start going back into the days of the “big bands” . . . enjoy and best to all as always.