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Goldman's Tom Stolper Has An FX Trade Recommendation For You
What would the world be without Tom Stolper FX recos? Very confusing, with no sure money to be made, and without anyone to fade, that's what. Which is why we are happy to bring the Goldman muppet slayer's latest FX "recommendation" In short: "We recommend going short $/JPY at current levels of about 97.30 for a
tactical target of 94.00, with a stop on a close above 98.80." In even shorter: Goldman is now buying USDJPY from its clients.
Go tactically short $/JPY on less proactive stimulus in Japan and narrowing rate differentials
While we believe that $/JPY will ultimately move higher on growing interest rate differentials and more stimulative policies in Japan, the near-term risks have increased, as we discussed in our latest FX Views published yesterday. On a tactical basis, these risks could push $/JPY temporarily lower first.
This week the Japanese government decided to go ahead with the sales tax increase at the beginning of the next fiscal year. The additional fiscal package pre-announced at the same time aims at alleviating only part of the negative impact from the VAT hike, according to our Japan Economics team. The BoJ meeting this week is unlikely to lead to any further stimulus either. Our Japan economists expect the next BoJ easing to roughly coincide with the implementation of the sales tax increase in April next year. With short positioning in JPY still very stretched, these policy announcements remove some catalysts to hold on to JPY-bearish positions.
On the rate differentials side, at the last FOMC press conference, Chairman Bernanke made explicit reference to fiscal tensions as a factor for delaying the widely expected tapering announcement and for the strengthening of the forward guidance. Rates have rallied since and continue to be under downside pressure. Uncertainty about the fiscal outlook in the US will likely maintain this downside pressure for now.
The combination of less favourable rate differentials, less proactive stimulus policies in Japan (at least for now) and continued short JPY positioning suggests the near-term risks to $/JPY have become more skewed towards the downside. We recommend going short $/JPY at current levels of about 97.30 for a tactical target of 94.00, with a stop on a close above 98.80.
The only question we have: will the length of time before Stolper is once again Stolpered out be measured in days, or hours?
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thank you, thank you...
QUICK!!! BUY ALL THE YEN YOU CAN IMMEDIATELY!!
FML ... just wasted my last dry powder before Stolper guidance ... I should set up a Stolper-only bucket.
This is a little cryptic. Who is this Stolper guy? Why is the Yen going to do the opposite of what he says now?
Is this a superstitious contrarian thing or is Goldman manipulating the FX markets?
I guess there are such a thing as stupid questions.
Ahab,
Nuh. It seems that Mr. Stolper, like most other 4X traders for the past few years, has assumed that the markets would move according to "natural" rules of bond spreads, money flows and common sense. More than once, Stolper has been wrong.
More than once, he has also been correct. He made a great Euro call at the end of last year and finished well into the money. I would have loved to have that bonus, I tell you.
ZeroHedge likes to pick on his sticking his neck out, making a market recommendation and having a good laugh when those presumptions don't come to fruition. It has been difficult of late to find someone who will stick their neck out for fear of ridicule (including myself...) because the foreign exchange markets no longer follow tried and true rules. But that is Stolper's job.
Retail traders, who used to be the swarming army against the giant banks, have fallen to the wayside because they are getting burned trading with logic, science and common sense. It seems as soon as we open our fat mouths, some ass on the other side of the planet is able to jawbone the market in the opposite direction, crushing our positions with 100+ pip moves that have no bearing on reality.
Thus, 4X has become an historically thin market in which central banks and other government-sponsored entities can move the market at their whim. And, no, Goldman's 4X division is not at all privy to anything Dr. Bernanke or the president said over the weekend at breakfast at Camp David. Last time Stolper was in Maryland, he was camping in the back of a minivan with a space heater hooked up to the cigarette lighter.
Thomas Stolper has done his outright best to predict the markets, as any 4X trader needs to do over the coming eighteen months but forces beyond his control have left him high and dry on many occasions.
It is far more important to listen to the reasoning for his calls and to assess those reasons on their merits. In this case, Mr. Stolper is spot-on in logic and common sense. Only time will tell if he is correct, or whether Abe, Bernanke or Draghi's "magic words" will crush his logical trade into oblivion.
Either way, it is important to note that Tyler loves to take easy shots at those who will actually put it out there, while he ridicules them behind a pseudonym. I don't see Zerohedge telling me where the Pound Sterliing will be in six months, nor where the yen crosses will end up tomorrow. It is easy to throw stones but much more difficult to stand up and face them.
:D
And for what it is worth, 4X rules. Only the most clever can survive in here.
Orly, I've been reading Stopler's recommendations for, maybe, three years. I don't remember him making a good call, but I may have missed one. Stopler's record is so bad that, it is useful information, like taking the opposite trade. Of course, we make fun of him, because his clients have gotten screwed so many times. So, what the heck are you talking about?!
Sometimes I wish I didn't have morals and I could trade this garbage.
Kidding... I love my morals! Oh! And my Silver.
So the US dollar will go stronger when the US is about to default? Of course it is. The markets are so fucking retarded...
Do you understand politics? They will "compromise" and come to a deal because TBAC told them too.
Yeah I know there will be a deal...
I had a dream that a major rating agency got so ticked off at Helicopter and Oblowme'x bullying that they jumped the gun and down rated the US after just a weak er week, just to watch them thrash and scream.
sweet, finally one of thes FX ideaas a person w/out an FX acct can take a look at. stronger yen, weaker dollar. weaker dollar usually means higher equity prices, and lower gold
with GS: FXY or YCL
vs GS: YCS
he might be right in the very near term, then get stopped out
On it, thanks. Long USD/JPY, target 103.
sweet, finally one of thes FX ideaas a person w/out an FX acct can take a look at. stronger yen, weaker dollar. weaker dollar usually means higher equity prices, and lower gold
with GS: FXY or YCL
vs GS: YCS
he might be right in the very near term, then get stopped out
As much as I hate to admit it, I think Stolper might have made a winning call short term. Keep an eye on 96.82 (usd/jpy)
Given USD weakness, I would short that stupif fuck. No need for stoplder. Go fuck yourself stopler.
Gotta love a country that says it wants more corporate and consumer spending, then raises the sales/VAT tax!
Brilliant!
I fucking love this guy Stolper!
Hahahaha
The only thing funnier is that Vlad is nominated for the Nobel Peace Prize.
Now all those ZH'ers with their closet crushes on Vlad can hope to feel safe and secure that Vlad is just like the Obamster.....
He's right. As the ten year yield comes off due to increased "risk-off," the yen crosses will follow suit.
Not only that but it is turning out that Abe's all-powerful jawboning of the 4X market has been over-played dramatically. A 93.97-level double-bottom to support is not at all out of the question.
Already short the GJ...
:D
Hi Orly. Good breakdown. I'm short G/J as well. Hope you've been well.
Yeppers. Not bad. How about you?
Crazy thing is, I still have the Cable moving higher to pass the Fibo-level above 1.634. After that, it should roll over pretty hard.
How do you see it?
:D
As usual, YC, I didn't think you would touch it with a ten-meter cattle prod.
:/
This recommendation is so stupid that it definitely will hurt anyone following the trade. O.K., let $usdjpy breach 97, maybe 96.5 possiibly if enough donutheads have listened to him. But then anyone with some brain should go long, for 98.8 at least, maybe even 100 is possible.
Once US yields start to rise and the economy is on known sound footing, 212 is quite feasible.
:D
YESSSSS! Fckin' yes!
was actually contemplating going home with what little I scrapped this week and shelf the usd/jpy long for the time being. Phew; well timed, bless his little cotton socks.
Probably not a real person. A guise for slaying muppets! I'll be long though. Easiest money out there.