What I Wish I Said

I was honored today to be on @spz_trades’s last show on BFTD.tv with @NicTrades. @NicTrades is a superwoman who chatted markets in the middle of a power outage. She rocks. Some of her key observations for 2014 that I took away:

  • $AUDUSD to 0.9000 off the double bottom
  • $USDJPY to 112
  • USD lower and USD pairs higher
  • $EURUSD to 1.43
  • Correction in $SPX, $DAX and $FTSE
  • Stocks will have to rally on their own merit, not QE

I was clearly the student in the room and now in hindsight there are a number of thing I WISH I could say now. SMH. Face plant. So I’ll say them here.

  • I do see $EURGBP higher to 0.8600. I also still see heading lower in 2014 to 0.8000. It might happen way sooner than I imagined if current price action is any indication.
  • $GBPAUD is due a correction lower. Much lower. But if it were to correct to 1.7670 the 50% Fibonacci level, hold, and rip to new highs at 2.10, it would be the trade of the year.
  • Other great follows right now on Twitter for new traders that I didn’t mention: my traders list

I love that this blog gives me the opportunity to reflect on myself and remain true to who I am. I don’t know if it was nerves (Nic is a rock star!) or because I had company the night before, but I don’t feel like I came off myself today. Hopefully, you all can enjoy listening in on this chat about markets and trading for 2014.

Europe Contagion Hits Japan

chart of Japan trade balance with EU

Europe hit Japan right where it hurts – in the wallet – for the first time in 38 years. We all know that Europe is hell bent on carrying out austerity-driven policies. That drop in exports above is vicious. The following recovery has been tepid at best. It looks like the recession that has gripped Europe since 2009 is spreading beyond its borders.

As its second largest trading partner, Japan needs European business to help inflate its economy. Decreasing trade, however, leads to decreasing price hikes which leads to more deflation which equals a strong yen. Currencies from low-inflation countries are always in favor with investors. With $USDJPY around 80.00 and the $EURJPY having traded to record lows, the BoJ has quite a fight on their hands as Europe only gets worse still.

But who cares? Interesting chart, nonetheless.

Source: Reuters