Global Risks Too Huge – Printing Must Continue

I’ve given it a little more thought, and have put a few more pieces of the puzzle together over the past 24 hours.

I am now 100% certain that the Fed will yank the taper here very, very quickly and implement additional measures to “increase QE”.

Seeing that Japan’s GDP numbers have disappointed ( as well considering the ticking time bomb Fukushima in the backyard ) I am also 100% positive that the Nikkei will continue to fall, and that Abe will have no other choice but to “push print” – much sooner than later ( I don’t think as soon as tonight/tomorrows monetary policy meeting) – likely late March.

Another huge contributing factor has it that China looks less and less likely to implement the “proposed reforms” discussed at the 3rd Plenum Meeting some months ago so the “looming debt/credit crisis in China” may just as well continue on. A further “kicking of the can” if you will.

The EU Zone is a complete and total disaster as it has been, and as it will continue to be.

So…..all things considered, I find it highly unlikely that “ripping the band-aid” really stands a chance here, and imagine you can “once again” thank the good ol U.S Federal Reserve for screwing this up so badly – that at this point…there really is no choice. The rest of the planet has now become so dependent on the constant flow of “funny money” that markets don’t even appear to be concerned.

The data out of the U.S is terrible, housing will immediately collapse, blah blah blah….

The printing “must” continue. To bad it won’t work regardless.

Bond yields are gonna shrink back down. USD is going to make its final trip “to the basement”, stocks are gonna take one more shot to the moon before the entire falls into the ocean.

More as the week gets rolling…….


21 Responses

  1. kevin1959 February 17, 2014 / 4:38 pm

    Kong, Thanks for the views. What would you or any readers suggest to short the housing market?

    • Forex Kong February 17, 2014 / 4:41 pm

      I’m going to poke around, and I’m sure a couple of the guys here will have suggestions.

  2. JSkogs February 17, 2014 / 5:49 pm

    My personal opinion is pretty similar to what Kong has said here. So while homies and related industries might take a short bath….I’m not sure they make good short. Reason being is that the industry already got destroyed 5 years ago and is constantly under the watchful eye of the fed. Intervention could come at any second with respect to housing and blow your ass outta the water.

    • Forex Kong February 17, 2014 / 6:02 pm

      Housing? – Ya I’m not touching it, as it’s not my area of expertise.

      BOJ gonna cranker er upppppppp! Not this week……but at some point down the road.

  3. JSkogs February 17, 2014 / 5:55 pm

    And ya Kong re the BOJ. Stuff I read over the weekend says that they are generally happy with the level of inflation so I doubt they will do anything new this week. One article was on Reuters. If anybody cares I can find the link I am sure

  4. schmederling February 17, 2014 / 8:07 pm

    I finally have a confirmed daily NEG fire in the DXY – will be tracking the weekly squeeze now which should when it fire take us down to test the $72-$74 range if it should fire neg as well…. PM’s pulling back a little as expected…. daily RSI in silver still very high @ 72 from 76 – would like/expect it to come down to 60/65 before we continue higher…. Same with diggers…. I expect a final pop tomorrow am & then have them dip down as well….. I think options exp could be interesting this week with pm’s maybe rising into exp…. Will be interesting to see how this all plays out with the DXY firing off NEG…. think stock could also surprise as data coming in was pretty poor last week….. there was no reason for it to be recovering….. looking at the reversal as a bull-trap currently….. expecting a surprise here as well…. stock & usd lower….. PM’s pulling-back to reset overbought levels & then continuing until the March-April TF for a top…

    We will see how this plays out here…

    Cheers Schmederling

  5. schmederling February 17, 2014 / 8:24 pm

    Short USD/CAD here as well – layering these in ….. ok I am outta here….. excited about this week….

    • Forex Kong February 17, 2014 / 9:23 pm

      Wow brave Schmed.

      USD being so oversold here – should move up a day er two.

      It “should” but ya these days……gees – stuck in the mud for sure.

      • JSkogs February 18, 2014 / 9:15 am

        Call me mental if you must but I’m thinking of taking some more yen and usd nibbles later today

        • Forex Kong February 18, 2014 / 9:19 am

          This thing is a freakin meat grinder……I’ve got no interest in sitting here all day watching this thing continue to grind.

          Short AUD/JPY as well NZD/JPY look reasonable but “still” hanging around at level seen over the past 5 days.

          USD continues to take hits….I’m not doing anything til I see something move with “some conviction”.

    • David February 18, 2014 / 10:23 am

      What’re you targeting if you don’t mind me asking Schmed?
      I really like it long at 1.0850 (hoping to add there this week). So hopefully you’ll get a nice down move, and me a great level to add to my long.

      • Forex Kong February 18, 2014 / 11:07 am

        As well Schmed and maybe you too JSkogs.

        A list of some great Canadian miners?

        I’d like to branch out and explore several more companies.

      • JSkogs February 18, 2014 / 11:39 am

        The only ones I have any real knowledge of are ATAC Resources, Rockhaven Resources and Strategic Metals Ltd. ATAC has quite a serious find under its belt. The three companies are related financially. These are juniors so they are pretty speculative but I do know ATAC will likely turn into something big. I’d obviously urge people to do their own homework first on them.

        • Forex Kong February 18, 2014 / 12:21 pm

          Thanks J – I’ll have a look!

          On my end…moves in EXK , as well GPL have been great, and I believe will continue after we get a lil pullback here.

          ANV on my radar in gold – as a big buy out in the works from Chinese fellows.

  6. JSkogs February 18, 2014 / 10:53 am

    Total meat grinder for sure. USD pairs getting sold but into a very tight range that looks like it will resolve to the upside for USD and yen futures contract looking very much like continuation to the upside. Not acting yet as I agree with but definitely on watch because it could be a powerful move given the extremes

  7. Rob February 18, 2014 / 11:48 am

    Hey Kong,

    Price action as of late feels like a “flushing.” I see where your head is at long term but I am not there with you as yet…

    i think the market is doing what it is supposed to do these last couple days, think tomorrow could be a big moving day… I haven’t lost faith in the USD and Yen yet : )


    • Forex Kong February 18, 2014 / 12:22 pm

      Frankly – price action can come and kiss my big fuzzy ass!

      Another day of indecision, another day of grind…just make a move already!

      • Rob February 18, 2014 / 12:35 pm

        Patience pays in the business does it not Kong? : )

        Pour me a shot yes, it’s too damn cold out here. Sigh-more snow overnight…

        • Forex Kong February 18, 2014 / 1:45 pm

          You know it Rob…and yes this time around certainly stretching it.

          He he he….a shot needed indeed!

  8. David February 18, 2014 / 12:48 pm

    Today’s like watching paint dry,
    There is ast least something that looks attractive in my opinion and I’m starting to build a long position in GBP/CHF and will continue to do if she heads down further, I see a good opportunity medium-term with a move back over 1.50 (but 1.50 is attractive to take some off the table as she hasn’t been able to break and hold that for a while now).

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