Despite the Chinese equity markets performing well today, the JPY remains supported as more occurrences happen to keep up demand for the haven currency. Japanese equities performed poorly and European markets fared no better. In addition the alleged nuclear test of a hydrogen bomb by North Korea and further political situations in the middle east have also put investors into risk aversion mode. The result is that the JPY has strengthened for a third day in a row against all the other majors.
I wish to make clear my opinion that I believe this surge of Yen strength is not due to the Japanese economy faring better but simply due to risk aversion. Possibly exaggerated risk aversion as the markets adjust to the chaos in their first week of trading. With their GDP flat, Inflation flat, production contracting etc, the Japanese economy is anything but healthy and has a long way to recover. I believe that this risk aversion sentiment will lift as soon as some positive data comes into the market, which I believe will be this Friday’s American US data which I believe will show unemployment shrinking to 4.9% and NFPs increasing by 205k.
With regards to our account, I am happy to report that despite all the doom and gloom, there is one positive and the NZDUSD sell is roughly at break even point now, having been earlier in the green. This encourages me a little as I had not expected this to occur until the end of the week and it does reinforce our predictions at the end of December that the AUDNZD and NZDUSD positions would go from deep red to green before mid-Jan.
Onwards to the elephant in the room, the GBPJPY sell. Now as much as you will probably doubt this, and you have every right to, I still believe in this position. The JPY has nothing going for it at the moment other than risk aversion (in my opinion) and once this passes, the USDJPY and GBPJPY positions arr literally going to go back to where they belong, approaching 125 and 190 respectively (once again my opinion) and so I will hold this position no matter what unless Economic data from Japan makes me change my fundamental outlook. To this event, to protect those who did not or were not able to deposit a further 20% over the course of December, when I did the same and advised it, I will be closing the NZDUSD sell in green at some point today (hopefully), in order to protect everyone’s GBPJPY position, which I expect to recover and for us to profit from.
Also before I leave, I wish to say that as many of you know I do not actively post much on Etoro these days, other than saying good morning from time to time, so please do not be offended if I do not reply to your messages. I found it not to be worth it when every post without exception always attracts at least one “pro investor” who can read the market excellently days after something has happened. Clearly East Europe has many talented young fortune tellers as they all foresaw all these global routs, conflicts and disappointments happening. Reminds me exactly of my red month in August when many were touting me as a fool and claiming the US would never hike and was faking its data and saying my money management was poor.
Well if you like low risk and want 5% a year, then yes it is poor, but considering that after losing half my account (unrealised loss) I still am up 1260% over the last 8 months, I do not think I have done too badly. Considering I survived over a month with high risk multiple positions all going against me several times and deeply and been honest and communicated in good times and bad, I would say that my ability to handle things is decent and my integrity and respect for others is not too shabby. So the next person who wishes to send me death threats, wish me cancer or insult Islam on my blog (not that any of these matters have anything to do with trading), please use your real name and send me an address where I can send you a bag of rocks for you to kick around 🙂
Good luck everyone! We can do this!