Forex Markets – A Disturbance In The Force

Something is going on, and I don’t like it.

With the Nikkei down “another” -360 points here as of this morning, the Yen has barely budged, while the U.S Dollar has gotten absolutely hammered overnight as well!

What happened to the safe haven flows seen yesterday? Is this your “garden variety routing” where nearly everything you “expect to happen” doesn’t happen ( a very normal part of trading ) or perhaps indication of something larger?

The ECB has been “talking down” the EURO overnight, yet here again – the EUR as well GBP and even The Swiss Franc (CHF) have all surged higher in the face of a beaten down U.S Dollar!

I wish I could simply just look at it as a “ripple” or a normal day-to-day type thing, but I’ve been at this far too long. Something doesn’t look right – and I don’t like it. I don’t like it one bit.

An extra “zig” or and extra “zag” in our charts ( as well the every changing fundamental back drop ) can be expected in these times of unprecedented Central Bank intervention but when I see something “blatantly” out-of-place, a move “so contrary” to what I believe “should” be happening – I immediately switch up my thinking.

If I don’t know what’s going on, there’s only one place I choose to be ( at what ever costs ) – and that’s in cash, happily sitting on the sidelines, looking for a time when I “do” know.

Today being Thursday we can generally look for “a move” in markets, as the U.S Data hits the street here around 8:30 a.m.

I will be watching like a hawk. Or a dove, no wait…..a hawk….no dove.

No no no…..all gorilla here.

Stay tuned for an intra day update.


33 Responses

  1. Farhan Nasir (@FaniNasir) February 13, 2014 / 7:26 am

    true that . nothing seems to make any sense ,, these days ,,
    as for the dollar ,, looking at the dollar index ,, on 24th jan it got as low as 80.25 and from there it started moving up ,, and right now its at that support ,, now will have have to wait to see for a rebound ,,

    • Forex Kong February 13, 2014 / 7:35 am

      80.20 has been a number I’ve seen time and time again so yes…..I’m hanging in on a couple of trades ( certainly in the weeds ) and will let this morning go by.

      The USD in particular is extremely hard to nail down these days.

      • Farhan Nasir (@FaniNasir) February 13, 2014 / 7:40 am

        all the data came negative i mean seriously they could have manipulated at least one data and have it positive ,, anyways ,, USD getting nailed against every currency , except for AUD ,, AUD is one tough bitch ,, , but morning’s data had it down , and now speculations are that RBA will reconsider changing their neutral bias to negative again ,and bring down AUD

        • Forex Kong February 13, 2014 / 7:45 am

          I’m fine hanging / adding short AUD as I am currently in several AUD pairs but this USD trade is getting ridiculous.

          It tanks nearly every morning “on SP 500 down days” where again I hate to say it but – I imagine the move is coordinated.

          The series of “higher lows” came within a single point here this morning so….once again – pushing to the limit at every possible turn.

          I’m sticking with the couple trades I’ve got but “will not” be adding – short of seeing a very nice turn around.

  2. Careydina February 13, 2014 / 8:14 am

    All US data were in RED colour. USD is weak… When is GBP/USD rebound? Let’s see! What’s view on this pair, Kong?

  3. JSkogs February 13, 2014 / 8:17 am

    Morning Kong ya weird moves. Awesome loot though with the aud move man. Super pumped. Do you not think some usd weakness could have been expected prior to the data as the data has been soft as of late? only to return as risk off usd strength shortly after? USDCAD is firming up for a move up it looks. A little annoyed with my euro short. Thankfully my sizing is somewhat sensible. Still a bit pissed but whatever

    • Forex Kong February 13, 2014 / 9:16 am

      I’m with you on USD in general as yes…smacked down “then possible rise” but after as many days already – did not expect this mornings “further slide”.

      Everthing else is on track so…I’ll give it another day in that, AUD still lower and JPY pairs certainly not “jetting for the moon”.

      I guess we should expect these “risk off” type moves to pose a challenge although admittedly… I thought this one was a flat out given.

      Markets are doing their job, confusing and confounding – frustrating as well. No big payday for Kong today.

      • JSkogs February 13, 2014 / 10:11 am

        Ya man I was all pumped to collect a nice pay cheque today. Not so much. The last ride down was frustrating but very profitable so I guess why should this one be any different haha

        • Forex Kong February 13, 2014 / 10:21 am

          So it goes…..the ol Forex Market – rarely just “gives it up”.

          Poking around the net this morning – we’re not the only ones surprised.

          With U.S retail sales “miss” as well Unemployment Claims “up/miss”, and a raft of other “really bad news” out there, talk of “further Fed manipulation / banksters pump” is running rampid.

          There really is no day to day explanation, let alone looking at things “hour by hour”.

          Keep your positions small, be ready to dump at a moments notice, take profits immed , and just keep sluggin it out for now.

          All a guy can do.

          Oh ya…and Goldman “slashing GDP estimates”, Nikkei -360 overnight as well.

          It’s a sight for sore eyes that’s for sure.

      • JSkogs February 13, 2014 / 10:59 am

        If you pull up a 6 month daily chart for the DX and look at the last few months you actually see a rising lower line and a flat upper which should generally hold for a breakout move upward. Kong I’m sure you’ve seen what I’m talking about. Anybody have thoughts?

        • Forex Kong February 13, 2014 / 11:02 am

          Yes the pattern is a little fuzzy at the top – but yes continued “higher lows” and still not broken here today – however close.

          When a “real” correction in equites occurs ( as we see in general with Nikkei and inverse move in JPY ) USD has to take an upward ride.

          However “short and sweet” / fast n furious etc….

          That “to me” would be any freakin day now, paving the way for further QE announcements in late March, as the U.S cannot allow the U.S Dollar to rise “too far” without massive implications in debt servicing.

          • Forex Kong February 13, 2014 / 11:06 am

            It will eventually come down to one of two things.

            1.Save the banks / continue to prop up economy, and lose the USD as world’s reserve.
            2.Stop the massive devaluation, let U.S banks and economy hit the skids / restructure etc… and possibly survive.

      • JSkogs February 13, 2014 / 11:00 am

        I’m just on a mobile right now but I think I remember the weekly showing it clearer

  4. Farhan Nasir (@FaniNasir) February 13, 2014 / 8:45 am

    well i am only in two AUD pairs vs USD and Jpy .now i wished that could have entered GBP/AUD at the support ,, and SP 500 look at today’s move it went down but with that USD got down too ,, as i remember you telling me that both are inversely related
    so USD should have gone up ,, ,,

  5. @frenchdna February 13, 2014 / 9:14 am

    – Bad AUD data > Aussie going down.
    – A few hours later bad USD data > USD going down.
    But unless we don’t look at the same charts i still see “lower highs” on say EURUSD and AUDUSD.
    – Tapering is still on track, until proven otherwise.
    – Inflation low in Europe (Draghi’s speech) > room for weaker Euro.
    – Inflation higher in the UK > GBP going up.
    – Safe heavens? Kong you said it yourself, it’s a race to the bottom. Therefore can we still consider currencies to be “safe heavens”? Are there any other class of assets going up atm? (just speculating and throwing ideas here, for the sake of the argument). Worth a look, if a specialist/pro can chip in. I’m just “trading” for fun on the side, i wouldn’t even know where to look. Housing/Minerals come to mind though.

    – Adrien “Bro” frenchdna

    • @frenchdna February 13, 2014 / 9:17 am

      And what are bonds doing lately?

    • Forex Kong February 13, 2014 / 9:23 am

      I’m going to throw today in the category of “routing / fleecing ” as…’s really only the dreaded EUR / USD and the Eur currencies in general taking a bit of a bump on USD weakness.

      Bonds look to be rolling over here, where I would again expect USD strength as a result.

      I’ve been over the idea of “safe havens” a pile and ya….its not as if they are “safe” but a matter of market dynamics when an asset priced in either Yen or USD is “sold” – what is the result? Cash is raised.

      I like the mining stocks and have been in EXK for some time now.

  6. GM February 13, 2014 / 9:33 am

    There is a big support for USD not far below… It’s a rising trendline dating back to Sept 2012 and that was tested in Oct last year. It’s also a monthly pivot and a 50% retracement of the rise since last October. I expect something pretty big when we reach it…

    • Forex Kong February 13, 2014 / 9:34 am

      80.20 as I’ve seen it time and time again…

      A point off this morning…then moving back up so….ya – a tough day but no foul yet.

  7. David February 13, 2014 / 12:46 pm

    Surprised how the US session is turning out, the S&P opened down pretty good and now it’s up just about as much as it was down (this of course after bad employment data and retail data, go figure).

    Long USD/CAD is tempting at 1.0950.

    • Forex Kong February 13, 2014 / 12:56 pm

      Today takes the cake, as I’m “no fan” of trading during the U.S Session – let alone sitting here watching it.

      Complete and total nonsense with the PPT ( plunge protection team ) taking over for the Fed on a “non POMO” day.

      How its spills into currencies? More downward pressure on USD but “still” just hanging at support line.

      Long USD/CAD at 1.0950 certainly worth a stab.

      Me? I’m sitting tight til late Asia / London.

    • JSkogs February 13, 2014 / 1:36 pm

      Ya I’m long a starter in USDCAD at 1.09875. A touch offside but I’m holding. Really tempted to get aggressive here………BUT……I won’t haha

      • Forex Kong February 13, 2014 / 1:47 pm

        I’m as close to firing things up full steam as well!

        But won’t.

        Today can kiss my ass. What a waste of time.

  8. David February 13, 2014 / 1:50 pm

    It is tempting to get aggressive, but I’m not planning to unless we get down to the 1.0675 area, at which point I’ll only be targeting 1.10.

    If this area we’re at now holds, I’ll start offloading my position between 1.11 and 1.12.

    • Forex Kong February 13, 2014 / 1:54 pm

      I’m not doing a single thing here -as tempting as it may be.

  9. Kalahari February 13, 2014 / 3:12 pm

    Just an aside for those interested WTI looks to have hit the top of the range. Pin bar seems to have confirmed that, looking to short.

  10. JSkogs February 13, 2014 / 8:17 pm

    Yen futures chart is continuing to show consolidation vs reversal…….in my opinion. Could obviously be wrong but…..

    • Forex Kong February 13, 2014 / 9:02 pm

      POS……AUD with 100% retracement today / tonight, Nikkei getting smoked here again and literally – zip for movement currency wise.

      A disturbance in the force to say the least.

      Yoda? Yoda???

      • JSkogs February 13, 2014 / 9:45 pm

        Friggin yoda is pretty hard to get hold of man. Finally getting some movement yes!

  11. schmederling February 13, 2014 / 9:19 pm

    Hey Kong,

    I have the DXY leaning over a cliff here on a daily TF with a squeeze running about 16-days now….. A Neg fire is very close but yet to be confirmed…… further down the TF scale I have a weekly squeeze running since the 10th of Nov – 2013….. so I would have to agree that something is a foot here….. both PM’s & diggers rebounded as expected after a positive fire in gold’s daily TF yesterday…… those who were not shaken out of diggers yesterday & actually bought…. well done… I am sure there are not many… If I get a NEG fire in the DXY tomorrow – things will become very interesting – & I will start looking at that weekly squeeze very closely – that fire should it go NEG would take us down to test all-time-lows in the DXY….

    How this plays into currency pairs is another story – I’ll leave that to the currency experts…….. but again agree something is a-foot…. maybe 2-feet…. LOL

    Cheers Schmed

    • Forex Kong February 13, 2014 / 9:30 pm

      We’re really at a line in the sand for the buck, as it almost appears that the market “isn’t buying the tapering”.

      Where it sits as of this very moment is also a significant technical level so…..ya – something is most certainly “up”.

      I’m giving it another day in order to get some clarity – but I didn’t like it last night, I didn’t like it this morning….and frankly – I don’t like it now.

      • schmederling February 13, 2014 / 9:55 pm

        LOL you always make me chuckle Dr. Kong…. LOL make me smile with your one or 2 liners LOL cheers buddy

  12. r February 14, 2014 / 3:14 am

    Hi kong, what is ur gut feeling on this disturbance? Seems like the central banks of the world are up to something huge again..

Leave a Reply