Forex Trade Ideas – Wednesday, February 19

Sitting through an additional 4 or 5 full days holding a couple of small “long USD” trades, I’ve made the move here in the early morning to not only add to these – but pick up a few more.

Currently I’m holding:

long USD/CAD, as well short NZD/USD and AUD/USD

I’ve also added a small “face ripper position” in long EUR/NZD ( however bizarre you may think that is) at 164.83

I’m holding tight for the EU type currencies ( EUR; GBP and CHF ) as I’d like to see a more “convincing” move but both GBP and EUR are starting to show signs of exhaustion.

As well nearly ALL the JPY pairs are currently sitting at levels where a decent short position “could” be initiated but I’m still going to “tread lightly here” as these trades would suggest a further “risk off move”……and we know how that goes here as of late. The U.S Dollar looks painfully close to making a turn, but again we’ve got “Thursday” ahead – so in all honesty, not looking for too much action here today.

I’ve had little to say as of late, as I’ve not been actively trading but (as it’s my mandate) I must continue to push for profits as I go through alot of bamboo chutes, and of course don’t mind a good cold beer on the beach once in a while.

U.S Wants Ukraine – No Matter What

Markets sitting idle “yet again today”… in other news, and in the brilliant words of our dear friend Dr. Paul Craig Roberts, what you “may not know” about the current situation in Ukraine.

“”The protests in the western Ukraine are organized by the CIA, the US State Department, and by Washington- and EU-financed Non-Governmental Organizations (NGOs) that work in conjunction with the CIA and State Department. The purpose of the protests is to overturn the decision by the independent government of Ukraine not to join the EU.

The US and EU were initially cooperating in the effort to destroy the independence of Ukraine and make it a subservient entity to the EU government in Brussels. For the EU government, the goal is to expand the EU. For Washington the purposes are to make Ukraine available for looting by US banks and corporations and to bring Ukraine into NATO so that Washington can gain more military bases on Russia’s frontier.””

More from Dr. Paul at his personal blog here.

There are three countries in the world that are in the way of Washington’s hegemony over the world–Russia, China, and Iran. Each of these countries is targeted by Washington for overthrow or for their sovereignty to be degraded by propaganda and US military bases that leave the countries vulnerable to attack, thus coercing them into accepting Washington’s will.

Needless to say….I can’t imagine Russia being too thrilled with the U.S now looking to “set up shop” at the border.

You think there’s a little more going on these days than the SP 500?

Wow….things heating up in the East.

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…….


Fed Pulls USD Strings – Puppet Show Goes On

How long have I been going on about “tapering impossible”, U.S recovery a sham, QE to continue, Fed to destroy the Dollar, blah, blah, blah, you’ve heard it all before, a thousand times again, over n’ over n’ over, yes Kong we get it , by all means why not tell us how you “really feel” – right?


So we’ve seen Bernanke make his exit, and now we’ve got Yellen at the helm.

Keep in mind, the position of “Chairman of the U.S Federal Reserve” is likely one of the most, if not “the most” economically and financially influential positions on planet Earth, akin to “god” – or at least to you humans so……changes in U.S Monetary Policy effect each and every country on this planet – in some way or another.

With two straight months of “-10 billion dollars” in supposed “tapering” – why aren’t stocks falling? Why aren´t bond yields ripping higher? Why hasn’t the US Dollar shot to the moon on safe haven flows?

Because it’s never gonna happen that’s why! And to my absolute shock and surprise…the market already knows it!

Taking the bait, and again “trading what’s in front of me” sure…I’ve spent a good 3 or 4 days looking at “long dollar strategies” ( as much as it’s pained me ) then BAM!

We pretty much saw the USD fall out of bed over the past two days, crossing significant areas of support and signalling / suggesting “considerable downside” ahead. Can you believe it? Already?

It looks pretty plain to me that markets have absolutely “no faith or belief” that the Fed will stick to its guns and continue with tapering, and that if anything “yes indeed” more QE and money printing await – just around the bend.

That being said, it’s quite likely the U.S Dollar will take a bounce here sure, but – I will now “reframe” this as a “bounce” and NOT a fundamental change – reflecting “any change” in my long-term views being that the U.S Dollar is toast, and that the Federal Reserve will continue to print / devalue until the absolute end.

I’ll likely use any strength in USD next week to “gracefully exit” a couple of positions, so if it gets another “zig before the zag” I see the good ol 200 Day Moving Average up around 80.80 as good a place as any.

We’ll need to take another day or two to see what it means for stocks and “risk in general” but as it stands…and as hard as it is to believe well…..ya you know.

Whipsawed Fundamentally – It Happens

Further decimation of the U.S Dollar overnight has now taken us below a critical level of technical support, coupled with a dramatic and powerful “surge” in fundamental / supporting data.

All CPI readings for a number of European countries came in “above expectations” overnight propelling the EURO and other Europeans countries currencies “even higher” with the inverse effect on USD.

Now falling into “oversold” territory USD is setting up for a bounce / move higher, but that’s not of much consequence really – when you’ve just been completely and totally “fundamentally whipsawed”.

The barrage of conflicting data (suggestion of China’s tightening / slowing, as well the continued notion that indeed the Fed sticks with the taper) has created a scenario,where one has little choice but to either “get out-of-the-way” – or risk great pains in sticking to the program.

I choose to get out of the way. I will not participate in any “waterfall activity” as USD’s “time in the sun” appears to have been / will be short-lived, so will likely look to sell ( at a loss ) remaining open positions on any further strength.

This sets up for a very difficult time ahead with USD now rolling over and suggesting a “continued trip lower”. Personally I’m stunned by the activity but in putting a couple more pieces together am of the thinking that “few of the big boys” really have much faith / belief that the Taper will continue much longer – and aren’t even bothering to catch “whatever move upward” in USD may have resulted. That and the fact that the Fed is still very busy “behind the curtain” doing everything it can to crush the U.S Dollar.

I “may” try again to catch a move upward in USD but in getting my hand caught in the cookie jar here this time – will remain wary.

Considering I’ve suggested late March as a time to consider Fed intervention again ( and further printing ) anyway – I’ll now likely look for any further USD strength as an opportunity to sell / get short as opposed to riding it off into the sunset on safe haven flows.

Go figure eh…me the biggest USD bear on the planet get’s caught long.

I’m thrilled.



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.


Reversal Across The Board – USD And JPY Back In Demand

It’s a funny thing really.

You can make light of a particular currency pair’s price level (such as AUD/JPY yesterday afternoon), as well point out its general connection / relationship / correlation with “risk appetite”, and BAM!

Perhaps it’s a touch too early to say, but I’m seeing reversal’s in just about every single pair I track with respect to a reversal in “risk appetite” – with both USD as well JPY showing strength here overnight.

Did I need to wake up and check SP futures? or perhaps tune into my local financial news this morning to get an idea of where U.S stocks may be headed here today? Nope.

Obviously I’m short AUD/JPY from yesterday, and will be adding a couple more long JPY ideas here today. The long USD’s I’ve got will be added to as well.

I can’t imagine another “triple digit gain” here in the U.S today, as this counter trend rally peters out.



AUD/JPY And The 200 SMA – Just Can't Get Along

So you’ve been pushed to your limits “technically” and the majority of you’ve been pushed off the field.

Hungry bears trading “too big too fast” crushed in the recent upswing and “right around now” eager bulls feeling that it’s “safe to buy the dip”.

Has anything changed?



Last time I looked ( 15 minutes ago ) this Yellen chick (now heading the U.S Federal Reserve) is sticking to the plan and the “taper talk” continues so……check your “fundamental heads”.

U.S equities “still” pulling the wool over your eyes perhaps?

The Australian Dollar ( which generally trades” along side risk” ) just had a brief meeting with its old friend the 200 Day Moving Average and guess what?

Same old story. These two just can’t get along,and yet again part ways – unhappy.

Things setting up for a nice lil “reversal” here if you ask me.

Technical Limits – A Fundamental Challenge

There’s a pile of traders out there that feel “the fundamentals” are a complete waste of time. Following the charts day by day, minute to minute, hour by hour, “riding the waves” and trading the technicals –  with little or no regard for any such thing as a “fundamental”.

This works great of course…….until it doesn’t.

A “technical limit” provides a “fundamental challenge” in that eventually ( as markets will always push further in either direction than the average trader can bear) “all technicals” will be broken/shattered  creating further “fuel for the fire” in an industry “built” on the sale of technical analysis, and the promise of eternal wealth – while the fundamentals continue to lurk in the under current.

Can you consider making a living trading with “no concern” for the fundamentals, trading only the technicals?

I’ts my belief, that the answer to this question is no.

Eventually…..”all technicals” will be broken as the simple mechanics of the system “require” this to be the case.

Markets tell you to buy the RSI at level “x” and sell MACD at “y” as it “commands” – all-knowing the indicators / levels are meant to be breached, pushing “past” any extreme, essentially “snatching your dreams” with little concern for “anything you’ve learned” about technical analysis, time and time again as the fundamentals continue to hide in the shadows.

Do not leave your indicators set at the “pre defined” levels suggested to you in your trading platform! They are designed to be broken!

Learn to “compliment” your short-term trading with a “sprinkling” of the fundamentals as you really can’t survive without both.

Do I like coming home to “yet another day” of a counter trend rally? Absolutely not.

Am I at all worried about it?

What do you think?

Back in the game……nothing has changed.

Hold Or Fold – U.S Job Data To Disapoint

I was going to wait until “after” the jobs report here this morning, to see if we get a better idea of direction moving forward. Why bother.

The number will be a disappointment as I expected, with the media suggesting that the poor employment numbers are largely due to “poor weather” (I don’t think I’ve ever heard “that one” before).

Markets continue to question “if indeed” Yellen will stick to the plan of tapering, or even as soon as next week – make suggestion otherwise. I’ve been hearing that The Fed feels they need to see “a little more data” before considering flipping the switch and “tapering the tapering”, so mid March still looks like a reasonable time frame to expect “something big”.

We’ve bounced a little bit here this week, with AUD also moving up with “risk appetite” as the ol standard correlation goes, but all in all, it still only looks like a “bit of a counter trend move” in a fairly well-defined down trend.

I’ll be off to Belize here this morning, currently holding several pairs and frankly not that thrilled about it. The entire week trading flat ( and I mean really flat ) generally puts me on edge, as I hate holding anything for too long. I’ll let the jobs data hit, then re-evaluate holding,or possibly dumping a number of positions before I head out on holidays.