Month: December 2013

Japan's Aging Population – Adult Diaper Sales Surge

Forex Kong 12 Comments

Not like Fukushima isn’t a large enough problem for Japan ( and the rest of the world for that matter ) but unfortunately……..it’s only a “near term concern”.

Originally triggered by a “massive baby boom” post World War II, the demographics of Japan have evolved into something pretty unusual. The combination of long life expectancy and extremely low birth rate (one of  the lowest of all developed nations ) has resulted in a rapidly aging population, such that currently “one in every four citizens” is over the age of 65.

According to Japan’s National Institute of Population and Social Security Research, it will be “one in three people” in Japan to be aged above 65 by the year 2030.

There will be more people “over the age of 60” than “under the age of 14” by 2020, with more diapers being sold for adults than for babies.

Japan’s rapidly aging population and low investment returns are driving a decline in savings and wealth ( as retirees now “spend” their savings as opposed to grow them ) dramatically reducing the amount of capital available to fuel the economy.

Since 1981 Japan has produced enough savings to finance its domestic investment needs “and” still export savings as well. But as Japan grows older and it’s savings pool shrinks they will surely become a “net borrower” – meaning…..yet another “purchaser of U.S Debt” will likely stop buying and put even “more pressure” on the economic situation in the U.S.

“You ain’t investing in no U.S Treasury Bonds when your primary concern is maintaining a reasonable quality of life in your later years.”

Is it any wonder we see Japan taking such drastic steps ( via currency debasement / QE etc..) to promote growth and bolster their economy?

A work force that is generally “drying up” ……………and taking their life savings along with them.

Japan's Woes – Fukushima, China , Debt And Seniors

Forex Kong 20 Comments

For the coming week, I’m going to be writing / providing considerable information on some of the very troubling developments taking place in Japan. As you already know, I watch Japan very closely ( much more so than the U.S) and am “compelled” to share with you some of the things I’ve recently come to understand.

1. Fukushima

With over 300 tonnes of contaminated radio-active water flooding back into the pacific ocean “daily” for the past 2 FULL YEARS – the nuclear disaster in Japan is the absolute #1 largest threat to humanity I will have seen ( and likely yourselves ) in our lifetimes. The current situation is so dire, that Abe and the Japanese government have now passed a “new bill” granting Japan’s govt sweeping powers to declare state secrets where in whistleblowers and journalist may face up to ten years in jail for exposing anything the Japanese government declares “a special secret.”

If you can imagine how frail the situation is – if a single “spent fuel rod assembly ” of the 1000’s hanging precariously in reactor 4 where to break in open air – 30 million citizens of Tokyo may face evacuation, crippling the world’s third largest economic centre, paving the way for complete global economic  disaster.

As little coverage as the story is getting in the West, the threat at Fukushima is very, very real and will take many, many years to even “contain” – let alone repair. All the while…the contamination continues with estimates of impacting the entire Pacific Ocean over the next 5 years.

http://www.zerohedge.com/news/2013-12-06/japan-secures-final-passage-secrecy-bill-designed-kafka-inspired-hitler

This is an excellent breakdown of the situation moving forward, should any of you care:

http://www.geoengineeringwatch.org/fukushima-facts-that-you-have-not-been-told-about-dire-update/

Given the “passing” of this new bill, I fear it’s unlikely we will really “ever” get the information needed to properly evaluate the situation at Fukushima, as it’s obvious the Japanese don’t want to speak of it. Tourism, exports, health care, government reputation etc…take your pick – the lasting effects on Japan ( and it’s economy ) will be felt for many years to come.

Throughout the week I want to also touch on China’s recent military actions concerning Japan, as well the country’s “mushroom cloud” of debt and rapidly aging population.

Learn To Trade Forex – It's All In Your Head

Forex Kong 20 Comments

I’ll do this “once” as to provide a touch more insight into how I trade.

Let’s look at AUD/JPY for example.

You can see in the chart below, that the pair has been trading sideways for near an entire month within a very tight “100 pip” range. To put that in perspective in “real terms” the difference in value of the Australian Dollar and the Japanese Yen has fluctuated “a single penny” over the past 30 days. Actually no wait….over the past 2 months! A single penny in exchange rate.

AUD_JPY_RANGE_2013-12-06_Forex_Kong

AUD_JPY_RANGE_2013-12-06_Forex_Kong

Let’s stop right there.

Can you imagine that with “all the news” and “all the hype” and “all the bullshit” you are inundated with every single days as to “The Taper!”, ” China Slowing!”,  “Death Of The Dollar!” , “Stocks At All Time Highs!” “Market Crash Coming!” Blah blah blah….that the fluctuation between one of the highest yielding currencies, and that of the lowest yielding currency has moved…………a single penny?

And you’re completely underwater, can’t believe you’ve taken trade advice from a total stranger on the Internet, and sitting under your desk praying to god that “things will turn in your favor”.

A “single penny” in real world terms – and you’re already about to pull your hair out.

So…………..

This is where you just step back a moment. You recognize you’ve got absolutely no business trading as large as your trading – and that frankly, you’ve got “no friggin idea at all” how currency markets / trading works.

Good. This is an important step as……hopefully now…..you’ll go back – start reading from the beginning, and get yourself caught up. It’s all here, and I’m always available to answer your questions.

I can’t tell you “how to trade”, but I can tell if “a single penny” on “a single day of trading” has you slamming your head into your desk – I’d best keep my positions small.

Very small.

Trade Through Volatility – Get Tough Or Get Out

Forex Kong 22 Comments

If you’ve got zero conviction in your trade decisions – what hope in hell do you have in succeeding?

If you’re just “rolling the dice” sitting glued to your screen, “praying to god” the damn thing moves in the direction of your trade after a huge “risk event or ” news release” – give your head a shake!

YOU ARE THE LIFE BLOOD OF THE BROKERS AND WALL STREET BANKERS!

“Ka Ching!” – Thank you very much you tiny frightened little man, trading on margin with your hopes and dreams of “striking it rich” – I will liquidate your account now! “Ka Ching!” “Ka Ching!”

You’ve got to either sit these things out, or have a firm understanding as to where to pull the rip cord. Otherwise…..you’re sitting ducks.

I just saw several trades fluctuate as much as a full 100 pips within a 15 minute interval. Several “thousands of dollars” blinking before my eyes across the board – positive, then negative,, then mixed, then positive, then negative.

Has the world stopped turning? Has something “so amazing” occured as to change my entire outlook in a single 15 minute blip? Of course not!

With no conviction – you’re toast, and if you can’t rustle it up then the number one piece of advice I can give anyone is to TRADE SMALLER!

If your heart is racing! You’re trading to big!

 

 

Trade Alert! – Kongdicator Takes The Trade

Forex Kong 15 Comments

The Kongdicator has obviously taken its signal as I’ve entered like “a million trades here” as of now including to start:

short: CAD/JPY

short: AUD/JPY

short: USD/JPY

long: EUR/USD

long: GBP/USD

long: EUR/NZD

long: EUR/AUD

There is no question that in the immediate “inverse” effect of a tanking U.S Dollar is a rising EUR, so that’s a given. GBP strength along side ( geographically speaking ) makes continued sense, and it’s hard to expect much out of the commod currencies as risk comes off.

USD/CAD still hovering but will likely make it’s move lower here as well.

JPY is a tough nut to crack, and I won’t be surprised to see it put up a larger fight but…..short term trades with a quick hand / ready to jump look to be worth a shot.

U.S GDP Data – Totally Bogus

Forex Kong 16 Comments

You can get in here and argue your case til the cows come home! – and I honestly hope that you do, as perhaps you’ve some insight / information that can better help me understand.

The U.S data released this morning is absolutely hilarious. Not just “kind of funny” but so absolutely outside the realm of believable that I’m literally “on the floor laughing”.

Let’s see what the markets make of both this “ridiculous GDP number” and the “magical drop” in unemployment.

I’ve only added to USD shorts as well watching Japan continue to slide with long JPY’s starting to take shape.

Short and sweet this morning, as I want to get “back to the circus” as soon as possible.

I’ve not had this much fun in a while!

USD will continue to be sold here.

 

The Correction – One Way To Trade It

Forex Kong 2 Comments

It’s simple.

The hot money out of Japan has been responsible for “a pile” of the recent run up in U.S equities, as Ben and his buddies have been busy enough in the bond market – with little success. TLT is currently priced at 102.65!

I’m pulling up this ol chart from back “I don’t know when” I first suggested what was to come for U.S bonds, the U.S dollar – and inevitably U.S stocks.

Quote: “Not much else to add here as the intermarket analysis above pretty much outlines the direction for the U.S Dollar. I feel we will likely see a time very soon, when U.S bonds, U.S stocks as well as the U.S Dollar all fall together.”

TLT_Forex_Kong_April_20

TLT in Weekly Downtrend

I really don’t think people grasp how screwed the Fed is, and unfortunately how this translates to the “middle class” of America – who will be stuck paying for it.

With 85 billion per month in effort, you can see by only a couple of “down days in the market” the Fed is absolutely powerless when the “market decides” what’s what.

You’d seriously have to ask your self what on Earth would need to occur to “reinstill confidence” in the purchase of U.S bonds/debt? Not to mention the “global move” away from USD. Tapering is impossible. QE will be doubled no question, then likely tripled.

Did I mention that recent data has just had the “Yuan” replace the Euro as the second most widely traded currency on the planet?

This may not be the “last of it” as the large majority of retail investors will view this “next dip” as an excellent place to buy….and they will be right – for a couple weeks.

You want to play the correction?

Get short Japan.

Are You Trading Any Of This? – Why Not?

Forex Kong 13 Comments

This from November 14th:

I’d expect that “this time around” we’ll likely see the price of crude reverse here around 91.70 – 92.00 dollar area, with the usual correlating weaker USD.

I’m going to start running short-term technicals on stocks here soon, as well hope to offer those of you who “don’t trade forex directly” additional options and trading opportunities.

Dig up “oil related stocks” over the weekend and plan to get long.

Oil now touching 97.00

This from November 21st:

I’m not going to get into all the details here at the moment as……I imagine the majority of you could really care less.

“Just give us the trades Kong – what’s the trade Kong??”

The Australian Dollar is in real trouble here.

AUD has already come down considerably but…..I might see a “waterfall” coming – in the not so distant future.

AUD has fallen an additional 300 pips since.

This from December 1st:

In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S

Nikkei now down -500 points as SP trades lower for 2 days in a row.

If these kinds of “market gems” aren’t providing you with sufficient information, to be placing profitable trades then I’ve got no idea what the hell you’re doing over there.

Granted you’ve got to be pretty quick these days to catch some of this but…..aside from the floating heads on your T.V just telling you to buy, buy , buy – how else are you framing “profitable” trade ideas?

I assume I need me to get more specific right?

Market Exposure – How Long Are You In?

Forex Kong 19 Comments

It’s interesting when you consider that now a days – I spend far more time “out of the market” than in.

For as much time and effort spent, you’d likely think the opposite but….as the years go by, and as you learn to “pick your spots” – you find yourself doing a lot more waiting around than anything else.

I know it’s difficult when you are first starting out. Every “blip” feels like an opportunity lost and every minute feels like eternity while you eagerly await the next chance to trade. You practically “jump” at every little move – envisioning yourself “hitting the next big one” time and time again.

That doesn’t happen to me anymore. In fact, I can’t remember the last time my heart raced – let alone picked up a few beats. Finally you come to a point where “you make your plan”, you “trade your plan” and the plan just works.

I’d say the amount of time “in the market” vs “out of the market” is likely 25% of the time.

I dig into smaller time frame charts for fun, and place little trades here and there, but for the most part I’m usually sitting near 85% cash – watching and waiting for the next “real opportunity” to come my way.

Granted….these days – they don’t come as often as I’d like either but…….you can’t “make it happen”. You need to learn to be patient.

Real patient.

Oh! Oh! What’s that I see? Is the Dollar rolling over? No! It can’t be! Oh and what’s that as well? Is the Nikkei even gonna “make it” to 16,000? Is that GBP still pushing higher, do I see a “touch of strength” in JPY?

You’ve really got to love it when a plan comes together.

Eyes On Japan – Start Following Nikkei

Forex Kong 21 Comments

It’s 11:07 a.m in Tokyo Japan right now, and traders are just getting settled in for the long week ahead.

Considering our “global market” as well the fact that Japan’s current QE program is 3X larger that of the United States – it goes without saying that I’m very interested in activity overseas. A quick look at Asian markets on Sunday night is a virtual “look into the future”, as equally skilled and experienced traders/investors evaluate the weekend’s data and start making their moves.

A current chart of the Nikkei ( I use futures /NKD ), compared to a chart of the SP 500 has both poking around at near term highs so….in that sense ( if you don’t choose to follow the Nikkei specifically ) you can imagine traders in Japan in nearly the “exact same position” as those on Wall Street.

Two separate governments, both with similar monetary policies, printing like mad with hopes they will “somehow” survive. Massive trading floors, big banks flooded with liquidity and a stock market “turned up to 11”.

In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S. Half the planet is already “up and running” devouring the news of the day ( perhaps U.S retail sales over the holiday weekend?? ) so…..what? Did you have some idea that U.S markets lead?

With a current QE program “dwarfing” that of the U.S I can assure you – in the current environment of “free money” and “print to eternity” Japan is the country to keep your eye on.

All those freshly printed Yen had to have gone somewhere right?

You don’t think the Japanese are smart enough to “jump onboard” the “bubble fest” currently playing out in U.S equities as well?

Please…….with a full 12 hour head start, I’ll see “trouble on the horizon” in Japan long before you’ve hit the snooze button.