A Day A Trend – Does Not Make

Getting away from your computer and the markets for a day or two, can provide much-needed perspective and a fresh outlook on return. It’s easy to get caught up in every little squiggle the market makes, not to mention the never-ending stream of “massive headlines” – threatening to take you out at a moments notice.

As well ( and very much like fly fishing ) you need to be able to read the current conditions and evaluate where “and when” to cast your line, as we wouldn’t all rush down to the river in the middle of a rainstorm right?



Markets are no different. I don’t try to wade across rapid flowing water well up over my knees, just as I don’t go “all in” on some silly headline during the last couple weeks of summer. Years and years of experience, and countless hours of practice have it that I may not go fishing as often – but I most certainly catch more fish.

Leading into the Fed Minutes here around 2 o’clock – I see that very little has changed here in the short-term, and will likely let the dust settle then “re-enter / add” to a few existing positions – still centered on further USD weakness.

If by some absolute “bizarre shift in the universe” Bernanke actually “says taper” or actually “says” what the plan will be moving forward (as opposed to just sticking to the same ol puppet show) I will most certainly re-evaluate.

I see little to “no chance” of this happening.

9 Responses

  1. jimmy August 21, 2013 / 10:29 am

    Where do you see the direction of the Canadian dollar? Please share your thoughts.

    • Forex Kong August 21, 2013 / 10:36 am

      Hi Jimmy.

      I am bullish on the loonie long term for a miriad of reasons specific to Canada, but also need to keep in mind the macro conditions moving forward. When the U.S enters it’s next “crisis” this will obviously hurt trade / sales / exports from Canada and have an obvious spill over effect (globally as well) so…….I’ll keep my eye on CAD vs “what”? in order to take most advantage.

      Short term it’s really just in range against USD, but I’d still lean towards re entry “short USD/CAD” here this afternoon for a low risk trade.

  2. Andrew August 21, 2013 / 12:29 pm

    Hi Kong, thanks for taking the time. I enjoy hearing your perspective. Not many have been suggesting that the Fed will not taper or reduce printing activities b/c they can’t. I must admit, I’m not sure how the US can continue to pay the bills in an increasing interest rate environment. I was taught that it was unacceptable (even evil) to live beyond your means, but that is definitely not the majority view here in the U.S., as the average Joe has more debt than he knows what to do with and doesn’t see anything wrong with living that way personally or for the government doing so. But if the US goes into a debt crisis at some point, I wonder where that leaves the rest of the world. I have clients in Europe who are on six week plus vacations now, which is standard for them this time of year. Sounds nice for sure (and I’m jealous), but that combined with their expectations of them govt benefits and early retirement (at least by US standards) doesn’t necessarily lead to higher productivity or them ending up on top. Should be interesting to see what happens shortly. You’ve been seeing it clearly for some time for sure.

    • Forex Kong August 21, 2013 / 12:45 pm

      Great comment Andrew – really…get in here and “chat it up” as often as you can man – I’m sure others appreciate it too.

      When the U.S hits “troubled waters” here again “relatively soon” I can’t see it boding well for the rest of the world either Andrew. I’m not really lookin to Europe for any kind of “help”. Im not particularily optimistic about the coming 18 months and beyond.

      The “soft n mushy” system’s in EU are in much worse shape than most can phathom. The shift / imbalance / re balancing of things to come won’t likely see EU do much better in my view.

      Any bets on “who may come to the rescue” when thing head south for real?

      Hmmmmm……. maybe the East?

      Interesting to say the least hey? – We are going to see some incredible things in our lifetimes, with a few just waiting around the corner.

  3. schmederling August 21, 2013 / 7:07 pm

    Hey Kong – looks like you were on in your old stomping grounds up North… LOL good time indeed…

    I have a positive fire in the USD/CAD pair which I have been tracking last week & early this week with fires in the 4hr,8hr & the daily is right in the cliff of firing off positive…. the weekly is also in a squeeze set-up running some 14 weeks now.. should this fire off positive I would then expect the USD to continue gain ground on CAD….. we could see a little rest here before this daily & weekly fire off but it’s got the MM going right now…… went long the pair on the 4hr fire yesterday at noon….. still holding..

    I am expecting the PM sector to resume it’s upward trend as the over-bought conditions have worked off…. couple more days perhaps sold taking profits Monday before close….. ;0)

    All the best Schmed,

    • Forex Kong August 21, 2013 / 7:17 pm

      This damn pair would be the death of me if not for my continued faith in “USD destruction”.

      I’ve looked to pick off this “lil burst” higher with a small trade short the pair as these last 200 pips appear to have come out of “no where”.

      Otherwise….as I’ve expected USD strength in Sept…my window is slowing closing!

      It’s going to be a big change wrapping my head around “long USD” ideas ( and I’m not near ready yet ) BUT – IT WILL HAPPEN!

      Good seeing you are back at it as well Schmed. Fishing was great.

      • schmederling August 21, 2013 / 9:49 pm

        Sounds good – I don’t have a confirmed fire on the daily as yet but the candle is working on a positive fire here…. my squeeze works much better in the longer TF over…. anything over 1hr seems to provide more accuracy…. I’ll post the fire if I can… we will see where this one goes…. as mentioned the weekly is in a set-up as well…

        Cheers Schmed,

  4. robert August 21, 2013 / 10:11 pm

    Hi Kong. Welcome back! What are your thoughts on yen pairs. Are you still long yen?

    • Forex Kong August 21, 2013 / 11:02 pm

      I love trading JPY and am more or less choked that I’m not!

      I don’t know it I “missed something” in markets today or what but I’m still of the same / existing correlations.

      I’m long JPY in spirit here…………..but not pulling any triggers.

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