Apparently this missile actually went over mainland Japan for many miles.......an escalation (in my opinion), to say the least.
any thoughts on today's action? I was holding some calls and thought that we would shit the bed at the open but everything reversed.
Yes, first thing folks need to stop doing is believing what they read in the papers. The market has shrugged this off, the only thing that could change this right now is Trump doing something stupid. Let me explain. I went to bed yesterday at my usual 1700 EST with my stock holdings in the green. I woke up 2300 and all were solidly red thanks to rocket man. First thing I noticed doing the data update was the commodity currencies had taken a beating = risk off, CHF and JPY had strengthened. JPY puzzles some, why buy the currency when rockets are flying over? Well I reckon it is the carry trade unwinding. By afternoon in the London session, the commodity currencies were strengthening again and CHF and JPY were weakening. Risk was coming on again, and you saw the reversal. Just did my data update for Tuesday/prep for Wednesday. Commodity currencies have strengthened further, and the currency indexes I track, JPY made an A Down, CHF a C Down, so the mood is for risk on again. Trump was busy in Texas, don't know what he is up to now but as long as he doesn't rock the boat it'll stay positive. Hunsader of Nanex Tweeted yesterday that someone bought about 6,000 ES futures as a single trade, in the afternoon I think. Someone in Seoul joined in another discussion and said people were going about their lives normally. Let's keep this is perspective. The US and S.K. are holding War Games off Korea until tomorrow. Everytime they do that, rocket man does something to show he's got game, and this is like the 2nd or 3rd time he's sent a missile over Japan, not the first. But he's a rational man. The fat kid loves life, he's just had his 3rd child, he's put on a huge amount of weight since coming to power, he doesn't want to rock the boat. But there is no way in hell he will end up like Saddam Hussein or Gaddafi. Seoul and Tokyo and the US bases in both countries are the price for his going. Leave him be and all will be fine. Russia and China don't want conflict either, Russia has pulled out of joint projects as a sign of disapproval. Left alone, things will quiet down.
The fat man is just scared of getting overthrown by outside forces. He has the whole country as his slave, obviously doesn't like the idea of USA taking down their regime. While this isn't the first rocket that flew over Japan, it is the first one considered to be a weapons testing rather than sending satellites or whatever they argue their intentions were. Seems like he just wants the world to accept NK as a nuclear power and wants to be left alone. That said, a lot of negative momentum I was seeing across the board seems to have calmed down after yesterday. My number lines are slowly fading back to 0 which is in line with the price action. I tried a short USD/JPY yesterday when it broke my weekly A-down level and it seemed to be working for a few hours but spiked back and had to close it for like 5 pip gains. On top of that after yesterday the 5 day number line is back to positive. Even the bonds look a little exhausted, although it could just be getting ready for further move up. Overall, not really seeing any easy money trades across the board.
Could have some fertile ground over the next couple of weeks in RBOB: https://www.reuters.com/article/us-storm-harvey-energy-idUSKCN1BA1RD HOUSTON/NEW YORK (Reuters) - Tropical Storm Harvey further damaged the heart of the U.S. energy industry on Wednesday, churning into Louisiana after flooding the biggest U.S. refinery in Texas, forcing major pipelines to halt operations and threatening a supply squeeze for weeks. Benchmark U.S. gasoline prices and margins surged to two-year highs as Colonial Pipeline, the biggest U.S. fuel system, said it would shut its main lines to the Northeast by Thursday, hit by outages at pumping points and lack of supplies from refiners. At least two East Coast refineries have already run out of gasoline for immediate delivery as they scrambled to fill barges to markets typically supplied by the Gulf Coast, two refinery sources said. Others were seen running at higher rates to boost profitability by filling shortages. The Gulf makes up nearly half of total refining capacity in the United States, the world's largest net exporter of refined petroleum products, so the disaster's effects are starting to ripple through global flows. Traders in Europe and Asia were scrambling to reroute cargoes to the United States and Latin America to fill the gap left by refining and shipping closures in the Gulf, but supplies may not arrive fast enough to avert a crunch. “The longer the Gulf refinery outages last, the wider ranging the ripple effect for regions outside of the U.S. Gulf will be,” said Michael Tran, director of global energy strategy at RBC Capital Markets. Refinery damage from Harvey has driven up gasoline futures prices nearly a fifth over the past week, and pump prices are rising too, particularly in the U.S. South. More refineries could close now that Harvey has made landfall in Louisiana, where refiners can produce 3.3 million barrels per day. The outages and limited supplies have hit wholesalers. The premium for Chicago-area gasoline above benchmark futures is at its highest since June 2016, while the Gulf Coast price is at its widest above futures since August 2012. [PRO/U]