JPY Gold Silver Update

The Japanese Yen is making headlines. And not the kinds of headlines that sound bullish -- the exact contrarian indicator for actually building a bullish case.

Here's one headline I just found (though it's not new): Shorting Yen Could Be Hedge Funds’ Favorite Trade in 2013

Here a few other points:

• Sentiment is ultra low. One of my friends even mentioned that the DSI is at 7% - the lowest in 8 years at least
• Like many other bloggers, Mish has been talking several times about how low is going and how fundamentals are supporting these levels. Well, whoever thinks in terms of fundamentals when it comes to markets is just rationalising, and at this levels, they are rationalising a trend that is about to reverse.

In the meantime, gold and silver have been scrapping bottom for several weeks, and I think a tradable bounce has started a few days ago.

Portfolio Update

I have been away in Europe for a few weeks, and it was quite interesting to see how quickly things are deteriorating, for example en France, which looks more and more like a developing country to me.

In the meantime, my stops have been hit on my EUR/USD short and my AUD/JPY short while I was away. I was stopped at about 89.00

I nonetheless managed to open a new short position on the AUD/JPY yesterday only, but at a much more favorable entry point than my original one: new entry point is 92.50 and intend to grow it larger if the AUD keeps the levitation game going.

Extreme Sentiment: The Case of JPY and AUD - And Portfolio Update

I have been following the JPY for some time, with my friend SS. He sent me last a few charts, confirming that the historically low bullishness (or high bearishness) has reached a new extreme, and that at the same time commitment of traders is showing extreme long speculative positions on the JPY, extreme long positions on the JPY by commercials, and the opposite extremes on the AUD, one of the bubble currencies to pop in the coming debacle.

Consequently, I have opened a short AUD/JPY position in addition to my short USD/JPY position and the long USD/EUR position that I had opened a few days ago. 

Portfolio Update

I have opened a long position on the JPY and a short on the EUR both against the USD. Entry points: EUR/USD @1.3078 and JPY/USD@82.085