Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Watch This Group Signal Stock Market Trend Changes - 22nd Mar 18
Stocks are Gapping Beneath the Trendline Support - 22nd Mar 18
Fed Action Casts Shadow on Bullish Case for Stocks - 22nd Mar 18
A Strong Economy and Weak Stock Market is Bullish for Stocks - 22nd Mar 18
Fed Raises US Interest Rates 25bp – Where Are We In The Stock Market Cycle? - 22nd Mar 18
Why Spotify Will Likely Surge During Its IPO - 22nd Mar 18
SY Police Arrest Woman for Blowing Trumpet at Sheffield Tree Felling Protest - 22nd Mar 18
Facebook: The Anti-Social Network Covert Data Gathering - 21st Mar 18
Additional Signs for Gold and Silver Amid Increasing FOMC Tension - 21st Mar 18
Credit Concerns In U.S. Growing As LIBOR OIS Surges to 2009 High - 21st Mar 18
Stock Markets Are Flat-to-lower Before the FOMC - 21st Mar 18
Will Powell’s Actions Pop Stock Market Perfection - 21st Mar 18
Economic Moral Hazards of the International Criminal Court - and Philippines Withdrawal - 21st Mar 18
Larry Kudlow vs. Vladimir Putin on Gold - 21st Mar 18
Trump Builds Economy and War Machine - 21st Mar 18
This Stock Market "Illusion" Can Destroy Once-Vibrant Portfolios - 21st Mar 18
Gold Short-term Pull Back in Progress - 20th Mar 18
Stocks Appear to be Under Pressure - 20th Mar 18
Time To Eliminate Your Wall Street Tax? - 20th Mar 18
The Beast from the East Snow, UK Roads Driving Car Accidents - 20th Mar 18
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Stock Market Boosted by Thirty-Five Trillion Yen Tuesday

Stock-Markets / Stock Markets 2010 Oct 05, 2010 - 02:05 PM GMT

By: PhilStockWorld


Best Financial Markets Analysis ArticleGo go BOJ!!! 
Acting under pressure from the Government to DO SOMETHING, the Bank of Japan announce a 35,000,000,000,000 Yen ($418Bn) monetary easing program this morning, finally taking that last step and cutting rates to ZERO.  That’s right, the BOJ will literally give you money for nothing (no word yet on whether the chicks will also be free). Ironically enough, though, the logic of giving out free money now is the same as it was in the early 80’s - the BOJ is well aware that:

"We got to install microwave ovens
Custom kitchen deliveries
We got to move these refrigerators
We got to move these colour T.V.’s"  

Of course, even with an economy one quarter the size of the US ($4.1Tn), $418Bn doesn’t buy what it used to so the BOJ is coming up with ANOTHER 5 TRILLION YEN in a program to buy private and public assets - let the shopping spree begin!  You might think such incredibly reckless spending by the BOJ would devalue their currency somewhat BUT Noooooooooooo - the Yen ROSE back to 83.2 to the dollar (and we caught that move last night in Member Chat!) as currency traders realized that $500Bn of QE from the BOJ was only a drop in the bucket of the ocean of irresponsibility that is our own Federal Reserve. 

As I had said to Members last Wednesday (and we had lots of cool currency charts): "I am seeing A LOT of money lining up on the short side of the Dollar trade. I’m very concerned that BOJ will do something to squeeze the bears and THEN I think it’s a better entry."  Of course, currency manipulation was the theme of the week last week and you can get a quick review by downloading a FREE SAMPLE of our new Weekly Newsletter HERE.  

"The surprise invited some yen selling, but I don’t think the BOJ’s move will be enough to produce any sustained yen weakening," said Masanobu Ishikawa, general manager of spot foreign exchange trading at Tokyo Forex & Ueda Harlow.  Hirokata Kusaba, senior economist at Mizuho Research Institute echoed this view, saying "there will be no substantive effect from going from the already ultra-low 0.1% to this range.  The only effect on markets will be from the surprise of the announcement, but that will fade," he said. "There’s no doubt the BOJ tried its best today, but it’s hard to see how the measures as a whole will help the economy that much."

Japan’s currency largess gave the Nikkei a 1.5% boost this morning, rescuing them from a weak open, where they threatened to fail the 9,350 line that has been a point of contention all year.  The Hang Seng went nowhere but did recover from a 100-point drop and the Shanghai went up and up and up today, gaining 1.7% to finish at 2,655, exactly testing the declining 200 dma so tomorrow will be a very interesting test for the junior Chinese index.  The BSE just keeps getting rejected at that 20,500 line and fell 60 points today so a real "Which Way Wednesday?" in store for us tomorrow.  

Europe is the happy beneficiary of this recent Yentervention as the Euro jumped to $1.38 to the dollar for the first time since January, when oil was $83.95.  So strong Yen and strong Euro means too bad USA, who still have to buy oil with our weak-assed Dollars - not to mention gold ($1,332) and copper ($3.71) and even pokey old natural gas ($3.71) so we should have a nice rally day today with the energy and mining sector leading us back up as our currency debases another notch.  

Europe is up, led by the CAC, who we learned last night was a global laggard with the EWQ down 7% for the year.  They are making up 20% of that this morning (1.4%) but they have a bit of work ahead of them if they are going to catch up to Germany (EWG is down 1%) or the UK (EWU is up 1.5%) so we’ll be watching them to see if the bullish trend is real or whether this is just a quick stop on the way down, like the 2.5% pop the global markets got off the last Yentervention, on September 15th.  

We were already sick of the nonsense yesterday and I called for cash in our "Turning $10K to $50K in 6 Months" Portfolio (which is now the "Turning $26K to $50K in 3 Months" Portfolio!) along with any other unhedged longs and today is another good opportunity both to sell into the excitement and to get a little short with our "October’s Overbought Eight" list - maybe even another opportunity to short NFLX!  Of course we love our weeklies and I’ll be looking for the SPY $114 puts to come down to about .60 as a fun way to play a pullback for the rest of the week.  

We’ll get a nice look at how the market behaves on "good" news.  Obama said he would be “very interested” in finding ways to lower the corporate tax rate so U.S. companies operating overseas aren’t disadvantaged so MORE FREE MONEY for our Multinational Masters and Bernanke said he refuses to be out-eased by Japan and he’s got a whole fleet of helicopters lined up to dump money on our Multinational Masters as well.  

If you like to keep track of the BS - the WSJ did a very nice job of highlighting the latest Fedspeak and makes a nice read.  ICSC Retail Sales were weak (down 0.8%) and Redbook Sales were not much better and the ADP report was weak so we are certainly not out of the woods just because our money is worthless.  We get the ISM report at 10 and Consumer Confidence at 5 but jobs will be the big driver of the week with earning from YUM tonight, COST, MON, STZ and MAR tomorrow with PEP, AA and MU on Thursday so today is a nice day for a pop before the reality of the data becomes overwhelming.

Who knows, maybe the data and earnings this week will surprise us to the upside but, for now, we’ll play the percentages as we feel we’re a lot closer to the top of our range than the bottom.

By Phil

Philip R. Davis is a founder of Phil's Stock World (, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (

© 2010 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules