Here We Go! – Bring On The Recession!

Like it’s not already here, and more so…..never even left.

I look forward to hearing of your “timely exits” somewhere along the way during the next 3 years of complete and total economic devastation. I can only imagine that you’ll “do as humans do” and hang on “right til the last penny of your investments” has been squeezed from you, then of course – sell at the absolute bottom.

Why must you endure months and likely “years” of pain watching your portfolios dwindle to nothing, only to “then” decide you’ve had too much and ditch at the lows?

That’s because you are a retail investor. You are ridiculously greedy, and “for the life of you” can’t sell with profits in hand as….you must get more, and more and MORE!

I spoke of long, dark red candles yesterday. I spoke of the setting sun in Japan “weeks ago”.

I SELL AT TOPS.

I BUY AT BOTTOMS.

When are you going to finally get this flipped around?

I’ll take a couple more in the Premium Services area as we’re moving along quite nicely now.

Hit me at : [email protected] as the service is still not available to the public at large.

The Retail Investor’s Predictable Doom Loop

You want to know why 95% of retail traders lose money? It’s not the market – it’s their complete inability to fight their own nature. Every single economic cycle, the same pathetic story plays out. They pile in at tops, convinced this time is different. They hold through the initial pain, telling themselves it’s just a “healthy correction.” Then comes the real bloodbath, and suddenly they’re paralyzed by losses they never imagined possible.

I’ve watched this movie a thousand times. The retail crowd gets greedy when they should be fearful, and fearful when they should be loading the boat. Right now, we’re entering the phase where their portfolios are about to get obliterated, and they still don’t see it coming. The smart money has already rotated out of their favorite momentum plays and positioned for what’s next.

The Currency War Nobody Talks About

While everyone’s obsessing over stock picks and crypto rallies, the real action is happening in currency markets. The dollar’s dominance is cracking, and when that dam finally breaks, it’s going to reshape everything. You think your tech stocks are going to save you when the dollar loses its reserve status? Think again.

The writing’s on the wall if you know where to look. Central banks are diversifying away from dollar reserves faster than ever. The BRICS nations are building alternative payment systems. Even our closest allies are quietly reducing their USD exposure. This isn’t some conspiracy theory – it’s basic geopolitics playing out in real time.

Smart traders are already positioning for USD weakness while the masses still believe in American exceptionalism. When the currency war goes hot, you’ll either be positioned correctly or you’ll be roadkill.

The Three-Year Devastation Timeline

Here’s what the next three years look like for the unprepared: Year one brings the initial shock as overvalued assets finally correct. The retail crowd will call it a “buying opportunity” and double down on their losing positions. Year two delivers the real pain as economic fundamentals catch up to market reality. Corporate earnings collapse, unemployment spikes, and suddenly those “safe” dividend stocks start cutting payouts.

By year three, the devastation is complete. Pension funds are insolvent. Real estate markets have cratered. The middle class has been effectively wiped out. And where will our retail heroes be? Exactly where they always end up – selling their remaining scraps at the absolute bottom, just as the next cycle begins.

The professionals saw this coming years ago. We positioned accordingly. We shorted at the peaks, accumulated defensive assets, and prepared for the chaos. The retail crowd? They’re still chasing last year’s winners and believing in fairy tales about soft landings.

Why I Trade Against the Crowd

Every profitable trade I make comes at the expense of someone who thinks they’re smarter than the market. When retail is euphoric, I’m selling. When they’re panicking, I’m buying. It’s not personal – it’s just mathematics. Markets exist to transfer wealth from the impatient to the patient, from the emotional to the rational.

The beautiful thing about retail behavior is its predictability. They always do the same thing at the same points in every cycle. They buy strength, sell weakness, and convince themselves they’re “investing” when they’re really just gambling with money they can’t afford to lose.

Right now, we’re seeing the early signs of the next major market bottom formation. The smart money is quietly accumulating while retail is still fighting the last war. When the dust settles, guess who’ll be holding the winning positions?

The market doesn’t care about your feelings, your mortgage payment, or your retirement timeline. It only cares about supply and demand, fear and greed, intelligence and stupidity. Choose your side wisely, because the next three years are going to separate the professionals from the pretenders once and for all.

10 Responses

  1. ukmark62 April 25, 2014 / 10:16 am

    Do you have an opinion as to where the S&P might drop to over the next few years? Around 1,000 or maybe re-test the lows of 2009, or even lower?? Quite a few people who saw a crash coming in 2008-2009 are thinking the worst is yet to come.

  2. ukmark62 April 25, 2014 / 10:18 am

    Do you have an opinion on where the S&P could bottom out at over the next few years?? 1,000 or lower?? Some folks who predicted the 08-09 mess are thinking the worst is yet to come.

    • Forex Kong April 25, 2014 / 10:29 am

      The financal storm on the horizon will make 2008 look like a cool breeze.

      Many feel that “The Central Banks” will never allow this to happen again…which is absolutely ridiculous, as they have no power over this.

      When “global appetite for risk” wanes…..and flips over / hits the “fear button” there is no force in markets strong enough to withhold it.

      • Forex Kong April 25, 2014 / 10:33 am

        The SP will “easily” retrace 60-75% of the run since 2008 touching levels such as 1318….1147 and lower.

  3. Jworthyworthy April 25, 2014 / 3:41 pm

    Thanks for the posts Kong. I have really enjoyed reading your views (and those of your friend Dr. Roberts), over the last 6 months. As a boring equities guy I have mostly been in cash this year (in large part because of the things you’ve highlighted here). Of course their is still lots of FUD but your musings help bring some clarity in fitting together the pieces. It has been a long and bumpy road but patience is starting to pay off. Thanks for the ongoing reminders that things aren’t exactly what “they” seem.

    • Forex Kong April 25, 2014 / 4:05 pm

      Get off your ass then Jworthy!

      What are you doing about it then? We’re on the other side of the mountain now! And your “mentors” have all gone tits up ( The Fly calling er quits – 32% for the year after literally “weeks” of warning / posts here).

      No one survives in cash. Why can’t people wrap their heads around “trading both sides”??

      I thought this was called “traaaaaaaading”!

      “Investing” went out the door right around the same time “The Fed” cornered markets. How long will it take people to realize these are not “free markets”?

      • Jworthy April 25, 2014 / 6:55 pm

        Hey Kong,

        Thanks for the reply. I appreciate your refreshing perspective. And yeah man…

        The Fly’s recent blow-up was unreal. It has been a slow motion train-wreck. Goes to show this high-speed momentum trading is pure gambling. And (no matter who you are), without some basic risk management and discipline… poof, you’re gone.

        As for me? Well, what can I say. I know investing isn’t very “a la mode” these days. I guess It takes a special kind of weirdo to find pleasure in discounting future cash flows, – especially when “just buying the dip” has been such a great “strategy.”

        I’ve persuaded my investors that buying puts is a smart approach we should try. Baby steps. But I’m trying to profit from the downside, since most stocks are really over-valued. It’s not as exciting as going super-long Yen or anything. But all that is still a little over my head. So baby steps for now.

        All that to say, thank you for the encouragement to keep thinking, learning and trying new things.

        • Forex Kong April 25, 2014 / 9:28 pm

          Fly’s recent blow up was completely expected as he’s got nothing more than a single “fed induced” bias, and absolutely “no clue” what goes on beyond the walls of his Minnesota basement suite.

          Anyone with even the smallest “shred of knowledge” of the world around them would have / could have / should have seen the down turn “long before retail” – Yet the Fly get’s trampled right along with the mom n pops. What does that tell you? He “is” mom n pop.

          Investing on behalf of “million dollar clients”? Gimme a break. If so….he’d of been short along side me – weeks ago.

          More snake oil, along with that “Gary” clown.

          You’re a bright guy Jworthy, and I think it’s about time……

          You can make these decisions for yourself. I know you can.

  4. PT April 26, 2014 / 11:56 pm

    Senor Kong,

    Do you have a near term expectation for gold, silver and miners?

    Gracias, PT

    • Forex Kong April 27, 2014 / 11:34 am

      If you’re an investor in gold / silver / miners then…..just go on holidays and look again come Aug.

      If you’re a trader – you’ll have every opportunity to buy ALL – LOWER.

      One of the largest problems investor / traders have is asking themselves…..WHICH ONE AM I?

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