Forex, Gold, The Fed, USD – Trades Next Week

With all the talk of “collapsing emerging market” currecies, and the now “global move” towards risk aversion, we are starting to get a good idea as to how the Fed’s massive liquidity injections ( which spilled out of the U.S over the past 5 years ) have fueled spending / investment in these countries – and now the effect of that “hot money” being pulled back out.

As you’ve come to understand, huge amounts of freshly printed U.S Dollars invested “elsewhere” in search of better returns ( as if you can imagine..U.S banks / investors groups would rather invest in an “emerging economy” that their own “sinking” econmomy) are now pouring back into U.S holdings accounts in fear of much further downside risk.

The Fed’s commitment to tapering ( or at least until they freak and double QE) has triggered a rise in interest rates “planet wide” as many of these “emerging economies” now scramble like mad to adjust.

Keep you eyes on gold and silver for buying opportunities ( I like EXK as well ANV ), as well be prepared for some “serious letting of air” in U.S Equities as from a technical perspective we’ve not even made a dint yet, and the fundamental trade is pretty much clear as day.

Fed sticks to tapering – and planet goes down hard. Fed boots up QE ( and more ) band-aid gets put back on. I’m really curious to consider “how far they will actually let things slide” , as even another 1000 SP points doesn’t really look to scary on a weekly chart. Things could easily fall much further over the coming months.

Forex wise, we’ve finally come into the shift and volatility needed to pull “serious profits” in a very short time as these things always move “much further and faster” when moving to the downside.

A complacent buyer is one thing……..but a “freaked out seller” is another animal all together.

We gorillas stand to do very well in times of “correction”.

Exactly the same trade idea’s setting up for the following week, short of a couple days (perhaps late in the week for a breather / bounce ( and slightly lower USD ). We are clearly in a proven “up trend” in USD both technically and more inportantly fundamentally so…..I will continue to press until proven otherwise. Fed POMO running once on Monday and then “Double POMO” on the 5th then virtually NO POMO for nearly 2 full trading weeks! Let’s see how markets hold up…..or not.



I’ve been updating / tinkering with my Face Book page as well if anyone is interested in “liking” or following etc…. Forex Kong on FaceBook

9 Responses

  1. Nfxtrader February 2, 2014 / 9:45 am

    Hey Kong! back to your old tricks again eh? Banging out profits. You know its not going to hold up after tuesday! Take a look at gbp/nzd see if you like it on the long side. Also looking at usd/mxn on the long side in addition to all the stuff you mentioned.

    • Forex Kong February 2, 2014 / 10:38 am

      I’m at odds, not to mention a bit concerned when people / readers start “catching the hint” this late!

      USD has turned higher for the entire month of Janauary as dollars are repatriated back into U.S Cash.

      Short “short term” – I’ve already taken majority of profits and will see USD pull back a touch for reload.

      Short of Fed cranking up QE again ( and more or less doubling it – which they will soon ) “USD up” is common sense / fundamental’s 101.

      But The Fed can’t have that! Or U.S drowns in debt servicing costs alone!!

  2. David February 2, 2014 / 12:53 pm

    Hey Nfxtrader,
    Long USD/MXN looks very promising. I’ve been following the pennant pattern going back to June 2013 (pull up a daily or weekly chart and you’ll see it). We’ve finally broken out to the upside on January 16 and have held that breakout. Recent test of the breakout occurred on Jan 28 and we had a viscous bounce the day after.

    I think the technical and fundamentals are aligned right now (with the weakened EM sentiment and all) and believe we can hit at least 14.0 (Exiting longs at 13.10 otherwise). At that point I’ll be building a medium-term short position though.

    • Forex Kong February 2, 2014 / 12:59 pm

      She’s all yours David!

      I don’t trade the pair.

  3. Franky February 2, 2014 / 1:05 pm

    Kong, do you think buying silver in range of 17-19 with SL below 15 is a good idea? I really want to catch next move up….since I’ve been trying for many months now, don’t want to miss it when it finally happens.
    If USD strength in mid-term pushes PMs down I’m prepared to average down.

    • Forex Kong February 2, 2014 / 3:02 pm

      I’m already looking at the Fed flippin out as USD reaches anywhere near 82.00 so….even at 81.43/50 I’ve taken the majority of profits and am already considering “stepping lightly” with remainder of trades, and additional trades.

      What people don’t realize / fail to understand is “The Fed MUST kill the dollar”! At whatever costs to Americans!

      I’ll ride along here as always but frankly – am more than confident the Fed will crush a rising dollar very quickly, short of a nice fat spike type thing “and then” announcement of further QE. I’m still thinkin g late March , but who knows….perhaps they won’t even wait that long.

      You know what happens to Gold and Silver as the Fed works overtime in the paper market, masking the true effects of printing more money every year that the entire last 800 years of paper money in existence!!

      I like the low end of the range in Silver yes….but not for loading boats and looking for some kind of “killer trade”.

      More like grind away through the entire 2014, til the next round of QE fails as well.

  4. kevin1959 February 2, 2014 / 2:01 pm


    For some reason i did not get this post by email or by tweet.
    I signed up again for email and it said it would send me a confirmation but i havent seen it
    I have had trouble with me email all week . Not getting the tweet is weird though
    Let me know if i need to try something different. Keep up the good work.

  5. slimpickens February 2, 2014 / 4:17 pm

    Ok Kong….just loaded up my E*TRADE Forex practice account. I’m gonna start studying hard and practice trading tomorrow. What are some of the pairs you’re trading? Sold my UUP calls at the close Fri +23%…in hind sight I think I should have just sold half…..then again, I think I read somewhere a smart guy said ” you cant blow your account out bookin’ profits” haha! From an ETF standpoint what’s your near term thoughts on JPY? technically FXY looks to be set up pretty good…..above MAs, above down trend line. ( I know you don’t like ETFs…throw a dog a bone anyway)

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