And The The Next Leg Lower…….

I’d pull up a chart of the SP 500 pretty damn quick if I was you, and consider how far we’ve fallen and “how fast”.

Today’s move upward doesn’t come CLOSE to being considered a “reversal” as we’ve barely even “bounced” – with respect to the near term technical damage done over the last couple of days. Even now the index looking weak moving into the late afternoon.

I usually don’t make short-term calls on U.S Equities but as I see things from a purely “technical perspective” you might expect another day, or even another day or two – before we roll over and take the next leg lower.

That’s right “the next leg” lower.

Long USD trades turned out fantastic, although I’m not at happy with the way I traded it. Another 1% added here with short EUR and CHF providing most of the juice. Now leaning pretty heavy on the short NZD trade moving forward. JPY pairs still suggesting more JPY strength to come so….beware! The ol SP “risk o meter” is still very much so pointed – lower.



9 Responses

  1. Brosbhos January 30, 2014 / 1:42 pm

    Anything on AUD relative strength against USD? I don’t really understand why this specific currency holds stronger than say NZD or EUR.

    • Forex Kong January 30, 2014 / 1:53 pm

      Well….very different than EUR but usually trades similar to NZD.

      NZD held off on interest rate hike yesterday and has been an absolute brute / strong currency for months now….finally taking profits / pulling back along with risk in general.

      AUD is a bounce and nothing more – moving “up with risk” on a “day like today” – but most certainly not in general.

      I have both NZD as well AUD heading lower, and lower….

  2. Rob January 30, 2014 / 1:47 pm

    Hey Kong,

    This is Rob again, the same gent whose post you ended up using as a blog entry about a week back : ). That was neat thanks for that. Question for you…

    I just read that you are favoring short Kiwi as we go forward, and I think that is a good play, my question though is timing, Kiwi seems to have take a bit of a beaten on most pairs recently, don’t you think she is due a bounce up before getting smoked?

    Another pair I mentioned last time I posted on your blog was CAD. I thought it was a bit toppy at levels back then and perhaps got in too early on a particular CAD trade, but the run up against the Loonie now again looks tired to me and toppy. What are your thoughts on America’s neighbor?

    Cheers take care.

    • Forex Kong January 30, 2014 / 1:56 pm

      NZD has finally had the wind come out of the sales…’s a pain to trade anyways.

      I’m leaning short in that it’s FINALLY showing the kind of weakness that tips my indictors.

      Love Cad…. ( as I am Canadian as well! ) but not in a risk off environment obviously….getting pounded.

      The move VS USD is ripe for reversal yes – but not yet.

  3. Kalahari January 30, 2014 / 2:37 pm

    Aud/cad looks again at the top of the range, good time to short

    • Forex Kong January 30, 2014 / 2:59 pm

      Certainly a “ranging pair” yes…and even with potencial 100 pips to .99, to start chippin away here / building around the horn??

      You bet -I’ll bite on some of that.

      Small orders, staggerd throughout coming days. Boom – a winner!

      • Kalahari January 30, 2014 / 3:07 pm

        Glad you like it, thanks for your SP500 tip certainly seems to be on the move again

        • Forex Kong January 30, 2014 / 3:11 pm

          Even another day er two up “still” can’t repair the damage as ( in my view ) it’s now to be viewed as a counter trend move.

          A bounce in a newly established downtrend.

  4. Anonymous January 30, 2014 / 6:45 pm

    Kong –
    Forgive/correct me if I misunderstand your stance/outlook here. Based on what I’m reading, you see the dollar going up and the equities market going down? Do I have that right? If I am understanding you correctly, where does gold hang it’s hat?

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