Trade Alert! – Kong Gets Long USD And JPY

And now………..Iiiiiiiiiiiiiiiiiiiit’s Time!

Clear the deck traders. Do the unthinkable! I’m taking a shot here this morning.

Yes as much as it pains me to do so ( he he….not really ) there are certain dynamics of the currency market that simply cannot be overlooked / overshadowed by one’s own “feelings” or “preferences”.

We’ve been wondering for some time now “if indeed” the U.S Dollar would take its usual “safe haven flows” ( although these days I wouldn’t really call it that but… ) when risk aversion takes hold, and sure enough it looks like we’re there.

I am initiating several trades long both USD as well long JPY, as money comes out of equities in both the U.S as well Japan ( Nikkei indeed rejected at the double top as suggested ), and in turn is repatriated to “cash” in each of these given currencies.

Makes pretty good sense doesn’t it?

I’ve listed the trades I am entering ( at various levels ) based on the fundamental shift from “risk on” ( where safe havens are sold ) to “risk off” ( where safe haven currencies are repatriated / bought ).

Short EUR/USD as well GBP/USD

Short AUD/USD as well NZD/USD.

Short EUR/JPY as well GBP/JPY, AUD/JPY and NZD/JPY.

Short USD/JPY.

Short CHF/JPY

Short CAD/JPY

Long USD/CHF

I sincerely hope this will be enough to keep you busy for the next couple days ( and perhaps even weeks ). With so many trades taking shape, there will be alot of management / jumping around to do, so we’ll do our best to stay on top of things day to day.

19 Responses

  1. schmederling January 13, 2014 / 7:48 am

    Hmmmm Hey Dr. Kong…. .interesting…… very interesting……
    Seeing that I only have on pair Aud/Usd Long out of you selection & of the opposite direction – has me thinking too say the least!!

    I have a daily squeeze running in the pair & very close to firing off positive here…… so this would have to pull a U-Turn to prevent a positive fire taking off today…. Will be interesting to see where the majority of MF goes over the next few day or ” Who or which sector will get the Loins share”

    Still holding long the pair & PM’s respectively…..

    Thanks for the post – Cheers Schmed….

    • Forex Kong January 13, 2014 / 7:57 am

      Keep on it here Schmed as…….USD has been giving us some problems with direction.

      I’ve sat , as well tweaked / passed on my original signals in these pairs / trade concept / idea – and will be keeping this on a very short leash.

      I can’t rule out a news conference, and the FED announcing “taper off the table” and “more QE to come” ( which I expect at some point anyway ) to obviously “de rail” the entire list of trade ideas in a heartbeat.

      I can’t see getting long AUD regardless so…..let’s keep our eyes peeled.

        • Forex Kong January 13, 2014 / 8:48 am

          Now entering “short AUD/CAD”.

  2. Franky January 13, 2014 / 9:06 am

    Thanks Kong,
    …and oil still long or giving up?

    • Forex Kong January 13, 2014 / 9:17 am

      Was a quick pop there the other day, and now with consideration of getting long USD you’d have to consider it flat / scratch.

      I flip an option here and there for beer money so…..I’m already out.

      • JSkogs January 13, 2014 / 11:43 am

        Ya oil could easily bang around for another 2 to 3 weeks. There is plenty of time to re enter oil long. You’d have to think that if a risk correction comes due to poor US data oil is still at risk for a little more downside. Will make a nice long very soon though

        • Forex Kong January 13, 2014 / 12:07 pm

          Bang on JSkogs….

          Didn’t see oil “burst” higher so…..hey – flat is a trade too.

  3. Leonardo January 13, 2014 / 9:22 am

    Agree with everything & have practically the same positions except the short AUD/NZD vs USD. Expecting a marginal retracement in the short term but I believe that the bias should be long on these pairs for a while yet. NZD is a better tell than AUD & if we fail to reach 85ish in coming weeks then perhaps the move has ended

    I also smell something fishy with CHF. Can’t quite put my finger on it yet (aside the fact that another move down in gold will further hurt the currency) but there appears to be something else going on here.

    • Forex Kong January 13, 2014 / 9:37 am

      I’ve been sceptical of a strong move upward in USD over these first weeks of January, but am taking a “closely watched” shot here.

      JPY strength a given, and I for one can’t see what’s keeping AUD and NZD “floating”.

      It’s still a pretty tough call out there, as “now I realize” U.S banks report earnings tomorrow.

      What are the chances “they” disapoint? Great timing on “looking short risk” but……we’ll play it as it comes.

      • pecuniae January 13, 2014 / 12:36 pm

        Kong, I keep telling you 😉 …Gold’s the key to Aussie strength right now, at least until a real panic in equities begins pulling gold down as well in a total risk-off rout. Basically, I would let the Aussie run a bit longer before pouncing on a short. I prefer shorting the euro & pound against the dollar along with both against the yen (as you have done) in the initial stage of this risk-off move. CAD…iffy. I still think we’ll see a sizable correction after its recent collapse. Also, I’m not so sure that the sizable divergence between the aussie and loonie will last much longer here. Also, I have a quick question for you: how large of a move in the JPY are you expecting? I, for one, think we’ll see a complete reversal in JPY shorts during this reversal which I envision as being quite sizable. It’s about time for retail JPY shorts to question their ‘easy’ short trade.

        • Forex Kong January 13, 2014 / 1:22 pm

          AUD shorts looking great here as per today’s entries, and fair enough – “whatver” it is keeping AUD bid…gold “maybe” – won’t be lasting very long so…I’m fine to continue to monitor / add as I always do.

          I too expect ” at some point” the move in Yen will be literally “catastrophic” to the shorts, although can’t rule out a bumpy ride / couple of high volatility squiggles in the days to come.

          You’ve got it – the trade short Yen is so one sided, and it’s screaming out “hard reversal”.

          As it stands….I’m watching literally minute to minute over the next few days as…I’d like to step on the gas a bit here but….have visions of the Fed confirming my med term views and cutting me off at the knees.

          It’s certainly a “dip” but will we get the “extended correction” here? or perhaps after “one more whipsaw”?

          I’m very pleased with entry here today, as from a purely “short term technical perspective” my tweaks / Kongdicator has improved..

          Let’s stay on top of it…..and stay EXTREMELY NIMBLE!

  4. Ze Weziman January 13, 2014 / 7:15 pm

    Hi Kong I am taking the ride with you. I wonder if you have any target in mind for the AUD.USD and for the EUR.USD just to have a bench mark what you are thinking and where you are heading.
    WW HongKong Member

  5. David January 13, 2014 / 9:32 pm

    This year has been quite a grind so far, but I’m with you on that EUR/CAD short play.

  6. schmederling January 13, 2014 / 11:15 pm

    I have Silver closing above the 50ma today – has been bouncing there for about 5-6 days * Along with a daily squeeze which has been running some 21 days here…. A positive fire is where I am leaning currently & once this does break I think the larger % move will be in Silver & Diggers while gold follows….. I’ll post the confirmation on the daily fire once it plays out – should not be long now…. would be surprised if it hold the entire week….. the break should come in the $20.60 price target here….. with PMs positioned to rise here I would have to assume that commod currencies would have to follow… I could also see the DXY & stock falling together as confidence in the USD is weakening away – this should be the early signs or tell if I am correct….

    Cheers Schmed,

    • crackor January 14, 2014 / 9:38 am

      Nice call on that Schmed……20.594 at this moment

  7. schmederling January 13, 2014 / 11:19 pm

    Also think the Aussie could come up & test the 97 res level over the next couple months here riding the PM’s wave…:)

  8. schmederling January 13, 2014 / 11:27 pm

    Aussie looks like it might just be working on the right shoulder of a very large inverse H&S pattern….. if 97 gives then 105 would confirm the completion of the right shoulder unless I am seeing things in charts lately…… not sure how these patterns play out in currencies vs. stocks so I’ll leave the currencies pro’s to have a look…… weekly TF….

    • Forex Kong January 14, 2014 / 12:44 am

      Ya Schmed….about that…

      97? 105? Wow…..

      If AUD reaches 92 I’d be shocked but sure…..something to watch.

Leave a Reply