Month: April 2014

If one considers “capturing the most pips possible” and entering a trade at the “exact right time” where as to not only move directly into profit, but also catch a turn of “such significance” that the trade produces “substantial profit over time” – you’ve really got to look out to the larger time frames, as well draw on your knowledge of the fundamentals.

Shooting for small “short-term gains” is fine too ( as this skill comes into play when timing “any entry” ) but there’s nothing like nailing and entry on the “longer term” – watching it move directly into profit, then running for weeks.

These types of trade don’t come around very often, but when they do……wow.

Lets look at an example:

Long_Term_Trading_Example_Forex_Kong

You can easily see what I’m saying.

When identifying a “macro change in trend” in a particular market one sees “amazing profit potential” but only if positioned either “before hand” or “very early”.

I’m very often early……but rarely…RARELY ever late.

I can show you how to do this.

I’m considering opening / starting the premium services here at Kong but wanted to first ask those who’ve been following along for some time.

I’m considering “pulling back the curtain” and taking a small group of traders ( 50 maybe? ) along with me through this next phase of the markets – where one has to assume…. many will struggle.

Full blown intraday trading / signals / weekly overviews, entry levels, stops, “the whole enchilada” as well as tools / charts etc – stocks / forex / whatever so…….as it stands – I’d look at it on an “individual basis” so…..anyone interested please drop me a line at [email protected] and we can go from there….

Otherwise….good luck to all.

The Psychology Behind Multi-Week Winners

Here’s what separates the weekend warriors from the real traders: understanding that the biggest moves don’t happen on your schedule. They happen when macro forces align, and most retail traders are either looking the other way or getting shaken out by noise. The chart I showed you isn’t luck—it’s the result of recognizing when fundamental shifts create technical opportunities that can run for months.

When you’re positioning for these longer-term moves, you’re not trading against algorithms or day trading noise. You’re aligning with the same forces that central banks and sovereign wealth funds respect. That’s why timing becomes everything, and why being early beats being late every single time.

Reading the Macro Setup

The traders who catch these multi-week runners understand something crucial: currency markets don’t move in isolation. They’re reflecting shifts in global capital flows, interest rate differentials, and geopolitical realities that take time to fully unfold. When I talk about being early, I’m talking about recognizing these shifts before they become obvious to everyone else.

Take the current environment. We’ve got central bank policy divergence, shifting trade relationships, and structural changes in how nations view currency reserves. The USD weakness we’re seeing isn’t just a correction—it’s a symptom of larger forces at work. The smart money recognizes this before the headlines catch up.

Why Most Traders Miss the Big Moves

Here’s the brutal truth: most traders are wired for failure when it comes to these longer-term opportunities. They want instant gratification, perfect entries, and risk-free profits. They’ll watch a currency pair set up for weeks, wait for the “perfect” entry that never comes, then jump in after the move is already 80% complete.

The psychological challenge is real. Holding a position through normal market volatility while maintaining conviction in your macro thesis requires a different mindset than scalping for quick profits. It requires understanding that temporary drawdowns are part of the process, and that the biggest profits come to those who can stay positioned while others get shaken out.

The Current Opportunity Landscape

Right now, we’re seeing the kind of setup that creates these multi-week winners. The traditional safe-haven relationships are shifting, emerging market currencies are finding new strength, and the dollar’s reign as the default risk-off trade is showing cracks. These aren’t day-trading opportunities—they’re position trades that could define portfolios for the next several months.

Smart money is already positioning. While retail traders are still fighting over 20-pip moves, institutional flows are building positions in themes that could run 1000+ pips. The market rally we’re seeing across multiple asset classes is connected to these same macro forces reshaping currency relationships.

The Premium Edge

This brings me back to why I’m considering the premium service. The difference between catching 20% of a move and 80% of a move isn’t just about better entries—it’s about having access to the kind of analysis that reveals these opportunities before they become obvious. It’s about understanding not just what to trade, but when to scale in, when to hold through volatility, and when the macro thesis is breaking down.

The 50 traders I’m considering bringing along won’t just get signals. They’ll get the reasoning behind each position, the macro factors I’m watching, and the market structure analysis that turns these longer-term themes into actionable trades. Because when the next major currency cycle begins, being positioned early isn’t just about profits—it’s about participating in moves that only come around a few times each decade.

At these levels you’ve got a pretty serious situation on your hands.

The U.S Dollar is literally “a hair way” from breaking below an “extremely significant level of support” with some pretty wide-reaching implications.

A massive drop in value of USD from here ( where it’s “already” dropped huge! ) would have serious ramifications as the international investment community and “world-wide holders of USD” would be concerned – continuing to watch their “USD reserves” reduced to toilet paper.

How much lower before a “literal waterfall” ensues? With international holders of USD finally giving up and “adding” to the selling pressure –  hoping to “just get out” with whatever they have left.

On the flip side……a “much expected bounce” and medium term move higher in USD will also force bond yields higher, tank corporate lending, push up interest rates and add continued pressure on the repayment costs of the U.S Governments monumental mountain of debt??

The U.S Government and buddies at the Federal Reserve have put themselves in a corner alright………………….with the only ones I imagine paying for it – being U.S citizens.

Bravo!

The Dollar’s Technical Breaking Point: What Happens Next

Looking at the charts right now, we’re sitting on what could be the most significant technical breakdown in the Dollar Index (DXY) in over a decade. The 101.50 support level isn’t just some random number traders drew on their screens – it’s the foundation that’s been holding up the entire USD complex since early 2023. Break below here with conviction, and we’re talking about a cascade that could take DXY down to the mid-90s faster than most analysts think possible.

The technical damage is already severe. We’ve got a massive head and shoulders pattern completing on the monthly charts, RSI showing bearish divergence at every bounce attempt, and volume patterns that scream distribution. When institutional money starts quietly rotating out of dollar-denominated assets while retail traders are still buying every dip, you know the writing is on the wall.

The International Exodus Has Already Begun

Here’s what most people don’t understand: the real selling pressure hasn’t even started yet. Central banks from China to Russia to even traditional US allies are diversifying their reserves at an unprecedented pace. The BRICS nations aren’t just talking about alternative settlement systems anymore – they’re actively implementing them. When oil transactions start flowing through yuan-denominated contracts and gold-backed payment rails, the demand destruction for dollars becomes structural, not cyclical.

The velocity of this shift is accelerating. Every sanctions package, every frozen asset, every weaponization of the SWIFT system teaches the global financial community the same lesson: dollar dependence is a strategic vulnerability. Smart money doesn’t wait for the stampede – it moves early and quietly. The dollar weakness we’re seeing now is just the opening act.

The Federal Reserve’s Impossible Mathematics

Let’s talk numbers that matter. The US government is carrying over $33 trillion in debt with interest payments now consuming roughly 15% of total federal revenue. Every 100 basis points increase in average borrowing costs adds approximately $330 billion annually to the deficit. The Fed can’t raise rates without bankrupting the government, and they can’t lower them without destroying the dollar’s credibility.

This isn’t a policy decision anymore – it’s mathematical inevitability. The only “solution” left in their playbook is financial repression: keeping real rates negative while inflating away the debt burden. That means purposefully destroying the purchasing power of every dollar in existence. Currency debasement isn’t a bug in their system; it’s the feature they’re counting on to avoid default.

Trading the Breakdown: Positioning for the Cascade

When this support finally gives way – and it will – the initial move could be violent. We’re looking at a potential 5-8% decline in DXY within the first few trading sessions post-breakdown. EUR/USD could rocket toward 1.15, GBP/USD might see 1.35, and don’t even get me started on what happens to commodity currencies like AUD and CAD.

The smart play isn’t trying to catch the exact moment of breakdown. It’s positioning for the follow-through move when algorithmic selling kicks in and systematic funds start unwinding their dollar longs. That’s when you see the real acceleration – when technical selling meets fundamental repositioning meets panic liquidation.

The Broader Implications: Beyond Currency Markets

This dollar decline isn’t happening in isolation. It’s part of a broader reconfiguration of global financial architecture that includes the rise of alternative currencies, the return of gold as a monetary asset, and the emergence of decentralized financial systems. When the real money players start diversifying their reserves, it creates momentum that feeds on itself.

The implications reach far beyond forex markets. US equities priced in real terms could face a prolonged bear market even if nominal prices hold steady. Real estate markets dependent on foreign capital flows will feel the pressure. The entire “everything bubble” inflated by decades of dollar dominance starts deflating when that dominance erodes.

We’re not just watching a currency trade unfold – we’re witnessing the slow-motion collapse of a monetary system that’s been four decades in the making. The only question left is whether this breakdown happens over months or years, and frankly, the technical picture suggests it’s going to be months.

This is being sold – as suggested.

The Nikkei is now down an additional -430 points, so only another “couple 1000 more points lower” to go on this “next leg down” – as suggested. Watching for 11,500 or 12,000 area.

The Nikkei leads as the money printing in Japan ( and it’s use in buying U.S equities ) has been driving the last legs of this….as U.S big boys have been selling you “their own stock” for months now, while the Fed cash just sits with the banks – as suggested.

There’s really not much more to say about it, as even if / when some “new nominal spike” takes SP / Dow prices near highs again, then again….and even “again” – it’s just more desperation / attempt to keep the ponzi alive a little bit longer.

Talk about a cynic, as I’ll be watching out for “false flags” anytime soon, with the U.S media machine and government clowns look for anything they can possibly muster  – to get people’s eyes off this.

Declaration of war next? Alien invasion?

Let’s see what they come up with next.

Moooooooo!

The Yen Carry Trade Unwinding: Understanding the Real Market Mechanics

The Nikkei’s brutal drop isn’t happening in isolation – it’s the visible symptom of a much larger structural problem that’s been years in the making. When you’ve got the Bank of Japan printing money like it’s going out of style, and that freshly minted yen gets immediately converted into dollars to buy overpriced U.S. equities, you create a feedback loop that was always destined to implode. The smart money has been positioning for this exact scenario, while retail investors keep buying every manufactured dip.

What we’re witnessing is the systematic unwinding of one of the largest carry trades in financial history. Japanese institutions and hedge funds borrowed cheap yen for years, converted it to dollars, and pumped it straight into American stocks. Now that the music has stopped, they need dollars to pay back those yen loans – which means selling U.S. equities at any price. This isn’t a temporary correction; it’s a fundamental shift in global capital flows that most traders don’t even understand.

The Fed’s Liquidity Trap Exposed

Here’s what the financial media won’t tell you: all that Federal Reserve liquidity everyone keeps talking about? It’s sitting in bank reserves, not flowing into the real economy. The banks are using Fed cash to buy treasuries and collect risk-free profits, while corporations use cheap debt to buy back their own shares. It’s financial engineering at its finest, but it creates zero real value. Meanwhile, Japanese money was the actual fuel driving stock prices higher – and now that fuel is being cut off.

The irony is beautiful in its simplicity. American executives have been selling their own company stock for months while Japanese investors were buying it with borrowed money. Now the Japanese need to sell to cover their positions, the Americans already took their profits, and retail investors are left holding overvalued shares. This is wealth transfer on a massive scale, dressed up as market volatility.

Currency Dynamics: The Dollar’s False Strength

The USD strength we’re seeing isn’t a sign of American economic health – it’s forced buying from unwinding carry trades. Japanese institutions need dollars to pay back their yen loans, creating artificial demand for greenbacks. This short-term strength masks the underlying weakness in the dollar’s fundamentals, which haven’t changed. The moment this unwinding completes, the dollar faces the same structural problems it had before: massive fiscal deficits, declining manufacturing base, and a central bank that’s trapped between inflation and recession.

Smart traders understand this is a technical move, not a fundamental one. The yen is getting crushed because Japanese money is flowing out of domestic assets and foreign investments simultaneously. But currencies don’t move in straight lines forever, and when this panic selling exhausts itself, the snapback will be violent. The Bank of Japan can’t let the yen collapse indefinitely without destroying their import-dependent economy.

What Comes After the Chaos

Once we hit those Nikkei targets around 11,500-12,000, the real opportunities emerge. Market bottoms don’t announce themselves with fanfare – they happen when everyone’s convinced the world is ending. The politicians and media will try every distraction in the book to keep people from noticing how badly they’ve mismanaged the financial system, but markets don’t care about narratives.

The endgame here isn’t complicated: forced selling creates oversold conditions, oversold conditions create opportunities, and opportunities create the next cycle. The key is recognizing when the unwinding is complete and positioning for the inevitable reversal. This isn’t about timing the exact bottom – it’s about understanding the mechanics driving price action and being ready when sentiment shifts.

Keep watching the currency pairs, especially USD/JPY and EUR/JPY. When the carry trade unwinding reaches exhaustion, you’ll see it there first. The stock indices will follow, but the currency markets always lead. That’s where the real money is made, not chasing headlines about alien invasions and political theater.

This is getting ridiculous, and much like a small boy poking a stick into a hornet’s nest – The United States is getting close and closer to “taking the short end of that”.

I’d suggested some time ago that “if you don’t know what’s really going on in The Ukraine” – you should really take a closer look.

Behind the unfortunate disappearance of flight 370, and the never-ending daily coverage ( I swear..my CNN watch has it that this “must be” the single most important story on the face of the planet! ) sit headlines of much greater “global significance”.

The situation in The Ukraine is heating up – and heating up fast as Obama’s complete and total desperation reaches new levels.

• http://www.zerohedge.com/news/2014-04-07/russia-accuses-us-mercenaries-inciting-civil-war-ukraine
• http://www.zerohedge.com/news/2014-04-08/crackdown-begins-ukraine-launches-anti-terrorist-operations-eastern-ukraine-arrests-

Keep in mind that for the most part…..these areas/people of The Ukraine “want” to become part of Russia, so running out in the streets looking to “arrest and detain” these protestors can’t sit well with Mr. Putin.

Obama is pushing his luck here…and I have every bit of confidence that – Russia will not sit idle much longer.

The Economic War Behind The Headlines

What we’re witnessing isn’t just political theater – it’s the opening salvo of a currency war that will reshape global markets for decades. While mainstream media feeds you sanitized sound bites, the real action is happening in the shadows where central banks are positioning their pieces for economic checkmate.

Putin isn’t playing defense here. He’s systematically dismantling the petrodollar system that’s kept America’s financial house of cards standing since the 1970s. Every sanction pushed by Washington only accelerates Russia’s pivot away from USD-denominated trade. China’s watching, taking notes, and quietly building alternative payment systems that bypass SWIFT entirely.

The Dollar’s Achilles Heel

Obama’s desperation stems from a simple reality – America’s economic dominance depends entirely on the world’s willingness to keep using dollars for international trade. That foundation is cracking, and Ukraine is just the visible symptom of a much deeper structural shift.

Russia and China have been preparing for this moment for years. They’ve been stockpiling gold, building bilateral trade agreements, and creating financial infrastructure that doesn’t require American approval. Every heavy-handed move from Washington pushes more nations toward these alternatives.

The irony is beautiful – American aggression is accelerating America’s own economic isolation. Markets are starting to price in a world where USD weakness becomes the dominant trend, not the exception.

Energy Economics Drive Everything

Here’s what the talking heads won’t tell you – this entire conflict revolves around energy markets and who gets to denominate those transactions. Russia supplies a massive chunk of Europe’s natural gas. That’s leverage you can’t sanction away or tweet into submission.

Putin holds cards that Obama simply doesn’t have. European industries need Russian energy to function. Period. All the moral posturing in the world won’t change basic economic reality. When push comes to shove, Germany isn’t going to freeze in the dark to make a point about Crimean sovereignty.

This creates a fundamental disconnect between American foreign policy objectives and European economic interests. That wedge will only widen as energy prices respond to geopolitical tensions.

Market Implications Are Massive

Smart money is already positioning for the inevitable. Commodities, precious metals, and non-dollar assets are where the real opportunities lie. This isn’t about picking sides in some geopolitical drama – it’s about recognizing structural shifts that create massive trading opportunities.

The ruble might look weak today, but currency markets are forward-looking beasts. A Russia that successfully pivots away from Western financial systems becomes economically antifragile. Meanwhile, every escalation threatens the very system that gives America its economic advantage.

Energy stocks, agricultural commodities, and precious metals are positioning themselves as the real winners here. These are tangible assets that hold value regardless of which currency system dominates global trade.

The Endgame Nobody Talks About

Obama’s playing a losing hand, and Putin knows it. America can’t actually follow through on its most aggressive threats without destroying the very financial system that gives it global influence. It’s like threatening to burn down your own house to spite your neighbor.

Russia, meanwhile, has been systematically reducing its vulnerability to Western financial pressure. They’ve diversified their reserves, built alternative trade relationships, and created economic buffers that can absorb short-term pain for long-term strategic advantage.

The real question isn’t whether America will back down – it’s how gracefully they can manage that retreat without completely undermining their credibility. Every day this drags on, more nations are taking notes about America’s actual capabilities versus its rhetoric.

This Ukrainian situation is just the opening act. The main event is a complete restructuring of global financial architecture, with America’s role looking a lot smaller when the dust settles. Trade accordingly.

I get the impression that for the most part…..many of you aren’t “particularily thrilled” with what you read here day to day.

You may pass by occasionally, maybe looking to “round out your daily reading” with something a little different, or perhaps you check in once in a while for a laugh at what “ol Kong” has to say about this or that, or maybe ( just as likely ) you stop by with a tiny little “chip there on your shoulder” hoping all the while ( somewhere there in the back of your mind…) that I’m flat out 100% wrong. That’s right – wrong.

Dead wrong. Completely wrong. Totally wrong. No?

Wouldn’t you rather that I’m wrong?

How bout the Japanese Nikkei crapping out at 15,000 and in turn……40 “trading days” of SP 500 profits wiped clean within 72 hours?

You liked that one?

I’ll bet.

Why Market Doubt Actually Validates the Strategy

Here’s what most traders can’t stomach: being right feels uncomfortable when everyone else is betting the other way. You want validation from the crowd, but the crowd is usually positioned for maximum pain. When I called the Nikkei stall at 15,000, half of you probably rolled your eyes. When those 40 days of S&P gains evaporated in 72 hours, suddenly the eye-rolling stopped.

The uncomfortable truth is that profitable trading isn’t about being liked or having your analysis cheered by the masses. It’s about positioning ahead of the inevitable reversals that catch 90% of retail traders completely off guard. The Japanese market hitting that resistance level wasn’t luck—it was technical analysis meeting reality.

The Psychology Behind Wrong-Way Betting

Every time I post a contrarian view, the silence in the comments tells me everything I need to know. You’re not commenting because you’re conflicted. Part of you sees the logic, but another part is still holding onto those long positions that are bleeding red. The cognitive dissonance is real, and it’s expensive.

Most traders would rather be wrong with the crowd than right and alone. It’s human nature, but it’s also financial suicide. When everyone was celebrating those 40 consecutive days of S&P gains, where was the skepticism? Where was the basic understanding that markets don’t move in straight lines indefinitely?

Currency Markets Don’t Care About Your Feelings

The forex market is particularly brutal to emotional traders. While stock traders can hold and hope, currency moves happen fast and without mercy. When USD weakness materializes, it doesn’t wait for retail traders to adjust their positions or their psychology.

This is why I keep hammering the same themes: risk management, technical levels, and positioning ahead of major moves. The Japanese Nikkei example isn’t just about one market—it’s about understanding how momentum breaks and how quickly sentiment can flip. The traders who recognized that 15,000 level as significant resistance were the ones who preserved capital when the selloff began.

The Validation Game is Expensive

Here’s what kills me about most retail traders: they want to be right, but they also want to be popular. These two objectives are often mutually exclusive in trading. When I lay out a bearish scenario or point to technical resistance levels, I’m not trying to win friends. I’m trying to position ahead of probable outcomes.

The market doesn’t care if you like my analysis or if you think I’m too aggressive or too negative. The market cares about supply and demand, technical levels, and the positioning of smart money versus dumb money. When market bottoms form, they’re usually accompanied by maximum skepticism and disbelief.

Profitable Contrarianism Requires Conviction

The difference between profitable contrarian trading and just being stubborn is having a systematic approach. The Nikkei call at 15,000 wasn’t a guess—it was based on technical resistance, sentiment extremes, and risk-reward ratios. When those 40 days of S&P profits disappeared, it validated the importance of taking profits and respecting momentum exhaustion signals.

Most of you reading this are still fighting the last war. You’re positioned for markets that existed six months ago, not the markets that are developing right now. This is why you secretly hope I’m wrong—because being right would mean admitting that your current positioning is probably flawed.

The reality is harsh but simple: markets are designed to transfer money from emotional traders to systematic ones. Every time you hope I’m wrong instead of objectively evaluating the analysis, you’re choosing emotion over logic. And in trading, emotion is expensive. The Japanese market reversal and the S&P selloff weren’t anomalies—they were predictable outcomes for traders who understand how momentum cycles work and when to position against the crowd.