General Options Blog

USD/JPY Bullish Trade

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The main headline in the currency market yesterday was that the USD/JPY (Dollar/Japanese Yen) broke a major resistance point, in fact it was a 25 year resistance line. Given the positive fundamental picture for this currency pair, and the breakout from major consolidation I think that the trade has more to room to the upside with little risk. After consolidating for all of 2015, the USD/JPY has finally broken out on heavy volume. To me that is the key: heavy volume. We saw a failed breakout on the SPY because it was on weak volume. When you have a breakout on heavy volume it means there is strong commitment to the trade and a lot of money going your way. I went long the FXY July 79 puts for $1.20. The FXY tracks the Japanese Yen vs the US Dollar. So by buying puts I am better that Yen will fall in value vs the Dollar.I am not sure how long I will hold them. I do not trade currencies that often so I will most likely just let the price action do the talking for me.

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I’m Selling and Going Straight to Crash

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The script for 2015 has yet to change.  Stocks gyrate around intra-day, intra-week, before hitting fresh record highs.  The market then proceeds to pull back, eliciting the "here it is" type reaction in reference to the much awaited market correction.  The bears draw all sorts of nasty red arrows... and state the crash of 2010, 2011, 2012, 2013, 2014... oh wait this is 2015...... the crash of 2015 that they forecasted  is finally coming to fruition.  We are mere mortals in the face of these market Gods.  Let us bow to their endless crash calls.

What a terribly wonderful chart by Jon Boorman.  In one picture you see just how wrong some of these pundits are.  Every year they call for a crash and every year when it doesn't happen they just move the date forward... as if their previous crash call never even happened.

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