Making a prediction for the future is easy. (In response to a valued readers questions)
The precious metals have decoupled from the dollar to a certain extent, so putting a time frame on the future prices of these two “asset classes” based on the usual correlations is difficult. I do predict that gold will go up and the dollar will fall. (go figure eh?)
I expect the USD to make its way lower through the first couple weeks of January – then take a usual oversold bounce, and then at least one more leg even lower into the middle/late February. During this time equities will likely push to near term highs then top out and trade sideways. As I am constantly moving in and out of the market I plan to be 100% cash sometime late February early March at the absolute latest, but in a different sense than my usual trading. I will continue to play the safe havens against the risk related currencies with possible addition / focus on EUR.
I plan to completely re-evaluate my trade plans come March.
A previous article worth reading : click here.
Considering that I trade the fundamentals coupled with an extremely accurate shorter term technical system – I will really just allow price to guide me. As per my usual shorter term entries and exits – I am (more often than not) sitting in cash during times of “trendless market direction” so regardless of exact dates / predictions I will trade what I see – as I see it.
I will continue to post real-time trade activity here via twitter, as well through the daily posts. I suggest extreme caution after this next (and possibly final) move up in equities and risk in general – come mid Feb or early March.
Thanks very much Kong, it feels nice when you call your readers as ‘valued readers’!
I like your outlook and I appreciate you sharing it openly. Was this analysis based on your fundamentals as well as short term technical system? I am asking to know if there could be any potential changes to the outlook in coming days as things change dynamically. Or are you very confident with 100% conviction on this?
Thanks again!
My short term system would keep me “safe” as to any sudden changes – as I follow price action, with next to no other indicators on my screens. Given some “unforseen event” such as war in the middle east, or terrorist attacks in the west etc and I will be out of the markets and/or change direction within an hour tops. Obviously I will be bloggin about it, and notifying readers through twitter etc…
Fundamentally I feel that the major players (Central Banks) have more or less laid out their course for the coming few months at least, but yes things can change on a moments notice. In a “mid term” forcast I am very confident this is what we are looking at.
I have a sneaking suspicion that by March things in the U.S will not be looking to much brighter – and come end of the 1st quarter, regardless of the stimulus – risk may very well turn to the downside. As a currency trader this also provides equal opportunity as the safe havens are bought – and the risk related currencies are sold – so no difference to me. I just don’t want to get caught with a lot of money in the markets on the turn.
As I plan to blog / post consistantly – believe me, you’ll here alllllllll about it!
Is your extremely accurate technical system the cycle?
No Hedge. I have been working hard on the shorter term system since we connected up last – and feel that I have finally nailed something down that is extremely dependable. It’s based 100% on price action so…..on as small a time frame as it’s applied (as it stands I use the 1H..but 15 min is also working) I can be alerted to what I consider a very good signal as to enter or exit.
I do plan to release / launch a paid service here in support of that, as well in connection with a members area / live trading / real time blog etc in coming months as soon as I am able to take on the work.
So..in conjunction with a keen bead on the fundamentals this is proving to be very powerful, and has now allowed me to “up” my position sizes (and creat much larger profits) with the confidence that I’m not going to get wacked.
More on this….lots more on this – as things develop.
New year is the time to bid farewell to the old
Year and welcome the coming year. It is the time to forget and get past memories
That are no longer useful or worth pondering upon. Let us Forget and forgive
Happy New Year!
This is my great experience to talk and share forex here with you, kong! Really appreciate that you’ve shared so much of your thoughts!All the best to you in 2013!!! 🙂
Fantastic Careydina!
I look forward to trading with you in the coming year – and wish you all the best!
Lets make it a good one!
Hedge…back from the beach – and a little more to add.
I’ve spent considerable time studying “cycle theory” and have found it to be a fantastic navigational tool for markets in a broader sense (if not the best “general study”).HOWEVER – in looking at “overlaying” cycles in one asset class vs another – I have now come to understand that turning points in one don’t necessarily line up with turning points in another, and that following currency movements is most certainly a leading indicator of movement in other asset classes.
I can’t tell you how many times I’ve been well into a trade…and then see many blogs across the net suggesting a “turn in gold” or “$dxy showing signs of reversal” days (and days) later. Currencies lead in my view.
I’ve taken “common and well known” cycle theory and more or less split it in half – concentrating on the “half cycle” areas.Shorting my time frame
and banking profits / reloading with consideration of the “full cycle” still in play.
As well….after much time and effort – I approach each and every individual asset class (as well as each and every individual currency pair) as a unique entity unto itself – cycles and all.
Kong,
So are you continue look bearish on the usd?
Oh Yes Careydina – I am still very bearish USD as well Yen(JPY) as I strongly believe “risk on” should have these safe havens sold during the first weeks / months of the new year.
The embarassment of the Americans political circus “should” be behind us very soon , and I assume that’s all the markets are waiting on – however ridiculous.
Kong,
Now I am holding all short positions as I think fiscal cliff deal will be out soon and it gonna boost the dollar. How do you think on this fiscal cliff matter? Wouldn’t it down 150 pips from now at least?
Im not sure if I understand you exactly but…..as per my trades and recent posts.
Fiscal cliff solved = USD DOWN – not up.
When the U.S gets this deal done – RISK IS ON – and the USD dollar (a safe haven currency – as silly as it sounds) FALLS!
Risk On = Dollar down
Risk Off = Dollar up
Kong, btw have you heard of market watch.com? Is this good for forex knowledge?
Of course….and yes it’s a great site for general information etc….but please be careful – as it is still a U.S based media site, and in general – as per my last post – when they say “buy” – I am likely selling….and visa versa.
You need to do your own research / learning – and try your best to filter out the “noise”. I hope you have had a wonderful new year – and I wish you all the best in 2013!
Oh no kong! I’ve sold all my long positions already!!! Perhaps as i mentioned plan C= No deal??
Well, I think I better close all my short positions asap. Since fiscal cliff could have enormous impact on the US market. And it could be plan A or B. Hmm… I don’t wanna to take the risk!
Fiscal cliff should be out in next week I guess. I startee to look at eur/jpy and gbp/jpy now. This 2 pairing up quite a bit recently ya 🙂
I expect the dollar to fall (go down) hard over the next coming weeks – and yes EUR/JPY and GBP/JPY have made very large moves – very quickly….so we do need to be careful. Although, I still plan to stay short JPY in general.
I do expect some kind of pullback or retracement soon as all the JPY pairs have made huge moves – but not quite yet!
I am planning to stay in the trades and perhaps just keep postions a little smaller, or even put a “mental stop” on them and just let the market tell me whats what.
I would much rather trades the commodities against JPY as opposed to GBP or EUR….but these have been great trades lately too.
I read alot about the fiscal cliff news this few days. I think USD-getting weaken. But before it down further, am sure it will greenback 100-200 pips first. As us still avoiding to announce the full fiscal cliff. I believe in next coming 2 weeks will have big move.
So Careydina…what do you think now?
Not bad Kong – not bad!
I am not a very technical person. ..I use to see from the indicator but now I see on the news more. So i am more like a fundamental trader. Does it help on indicator chart for trading?
What is most important is that you are trading in the same direction as the time frame higher than you.
So for example…if I look at some charts….and the 4H chart suggests a down trend – I will NOT TRADE a 1H chart unless IT IS IN THE SAME DIRECTION.
If the 1H chart is also in a down trend…then I will wait for the 15Min to ALSO BE IN DOWNTREND.
Hey,
Cleared all my short positions-finally! ! !
I predict this 2 days might up again as there is always a risk hat the US congress cannot agree on the future negotiations and that can affect the markets.
Tell me kong, when you think usd will have big fall?
Its my view that the dollar has already fallen quite a bit – but you’ll have to consider “which currencies has it fallen against”?
USD has lost considerable value against the CHF as well the GBP. The uptrend are still looking great for both NZD as well AUD vs USD so……
The only “dog” has been the EUR/USD trading sideways (I rarely ever trade this pair anyway) so……I remain short the USD against virtually everything on the planet for the coming weeks perhaps even months.
The “big fall” is right around the corner….but I don’t care what day/hour. I continue to buy and sell at levels of known support and resistance, and expect the dollar fall to continue.
What time frame are you trading?
I am always trading on gbp/usd. Will study more on others currency pairs later on while i have more time hehe…
My time frame for trading is start from morning till night haha. Btw I am living in Singapore, so I guess we are about 8 hours different each other. Are you live in the Mexico City?
I live on the Mayan Riviera, Yucatan area on the carribean.
My question about time frame is moreso – which charts do you look at for “direction” and then make your trade decisions?
It may surprise you but I look at the weekly charts first….then the daily…then the 4H etc….and then ONLY THEN if things are all trading in the same direction – I may enter on the 1H. I don’t “really” day trade.
I will book profits and re enter YES – but my trades are based on much larger time frames.
I can’t wait to visit Singapore – it looks fascinating.
I used to look on the D1 chart as well as H4 chart, but now i see more on the news – fundamental trader.
Does the indicator chart useful for trading? Please advise 🙂
Yeah you should have come here for vacation. 😉
A few analyzer said that gbp/usd can be up to 1.66. You think reachable? My goal now is 1.6430. Am sure can be hit by this month! Wow… now pounds dropped quite fair a bit already.
This looks like a fantastic trade opportunity – in fact….Im in!
I will go long GBP/USD – right this minute!
Wow! Good job!
Back to the chart topic, you think is that useful for trading?
The gbp/usd fell alot by 1 day. Its already 300 pips from the top.
Wow! Careydina – even I didn’t expect such a massive spike in the USD!
I really don’t believe that anything has changed whatso ever in a fundamental sense. People become afraid that the FED may stop it’s easing program earlier than expected – and see what happens, the safe haven status of the USD still stands – and money rolls in to it.
I still just see it as a “spike” and a great overall excuse to clean out shorts, and continue to make this a very tricky short term trading environment. I am not budging an inch here and will likley just look for opportunities to add – short USD against most everything.
Yes kong, before the day yesterday I cut off all my long positions. And do short-lucky that i made a right choice, so I save my account. I was under the cold sweat man… and now it seems like very uncertainly. I look at the D1 chart, seem like will drop to 5900-5830.
What is your view on this?
The GBP/USD is highly volatile and could easily dip to those levels – although I am not concerned as I will just add to my current position.
the USD still looks to only have tested the continued downsloping trendline – I see no evidence of a “change in trend” so….. I will remain long GBP/USD.
I have re entered all of my short JPY pairs as well am long the commods against USD – all in profit here as of this afternoon – as well profits in USD/JPY. Currently their are much better trade opportunities in the markets than GBP.