Japan Is Broken – Soon You Will Be Too

We’ve been waiting for this for a considerable amount of time, and our patience will now be rewarded.

The Japanese Stock Market Index “The Nikkei” has now breached our “waterfall zone” dropping an additional -200 points here overnight in a surprising ( only in that it’s happened on Sunday ) move lower, this early in the week.

The flow of news headlines won’t make a single difference in the world ( depending on what they look to as the cause ) in that, this has been slowly developing over such an extended period…it was only a matter of time before she cracked.

It takes the big players “weeks and months” to move such large amounts of money “in or out”  of position, and the past few weeks have had “distribution” written all over them. Distribution is a market dynamic where over time, large players continue to “quietly sell” to retail as they prepare to “hit the exits” with profits in hand. You certainly don’t want to be the last one holding the bag looking to “buy the dip” once the big boys make the move.

You doubt me? Consider the entire past 5 months as purely “distribution” and now watch how quickly these “gains” are wiped from your portfolio. Weeks and even months of trading “evaporate” in a matter of days.

You can lead a horse to water but you can’t make him drink well…..again I am absolutely stunned that so-called “traders” continue to push the “green button” in the face of something so incredibly obvious.

I guess you need to lose 30-40% of your gains to finally get it.

Best of luck with everything “bullish” here this week and in the months to come. Gorillas are already nearly 100% in position and already in profit pretty much across the board – still just waiting on the final nail ( USD ) to make up its freakin mind so we can jump on that train too.

Long JPY is the way to go, with the commods continued weakness right on cue. SPY and QQQ shorts from “days” ago still performing well and a miriad of trades lining up in USD. More at the members site: www.forexkong.net


16 Responses

  1. mark cooper May 19, 2014 / 7:23 am

    not sure about shorting the usd kong. she looks ready to rock n roll…

    • Forex Kong May 19, 2014 / 7:26 am

      Not shorting it at all….in fact just waiting to see it swing here for longs…

      But it’s still on the fence…and I’m not moving on it until I get a better idea where its gonna trade.

      • Forex Kong May 19, 2014 / 7:27 am

        The scenario of “USD down” as well “commods down MORE” still exists here so – USD can wait a couple more days.

        I’m not going to miss anything.

  2. mark cooper May 19, 2014 / 5:32 pm

    sounds good:)

  3. schmederling May 19, 2014 / 9:32 pm

    Yeah should be an interesting week – still long Eur/Usd pair for a good bounce – then we will see…. long Aussie….

    • Forex Kong May 19, 2014 / 9:37 pm

      15 days trading in AUD/JPY wiped in a couple sessions…..I cant imagine sticking around long AUD much longer.

      Risk off ma man. I’m as short as I can get.

      • Farhan Nasir (@FaniNasir) May 20, 2014 / 1:54 am

        AUD falling like a water fall ,, just hope that this bitch gets down to 91 level before making any rebounds or anything

        • Forex Kong May 20, 2014 / 6:28 am

          We’ve only just gotten started in my view Farhan, as “risk” has barely budged yet!

          I feel AUD has a long, long ways to fall.

  4. schmederling May 19, 2014 / 9:51 pm

    For the moment – the 4hr looks weak & the 8hr & daily have squeezes that look like they might fire Neg – In which case I’ll switch & go short if they do…. However things have been reversing like crazy lately so we will see…
    The 4hr is very close to a Neg fire here so that will be my Key to start trimming – we will see how it goes…

  5. schmederling May 19, 2014 / 9:54 pm

    I’ll know by mid-night if the 4hr fires off Neg – then will bail… as the 8hr & daily will most likely follow downward….

  6. schmederling May 20, 2014 / 12:29 am

    Yeah – I have a Neg fire on the 4hr – bailed AT mid-night – ahh well … the 8hr & Daily should fire off Neg here…

  7. Andyman71 May 20, 2014 / 4:26 am

    Morning Kong, could I possibly ask you what importance you rate these in your trading? (as a percentage would be great).
    I hope I’m clear as to where I’m coming from. Any thoughts you have would be much appreciated…again.

    • Forex Kong May 20, 2014 / 6:32 am


      I don’t usually take a technical trade “unless” the fundamentals are on my side so…..

      Fundamentals, Technical and then Risk in this order.

      Generally..once I have the first two in line…..”risk” is reduced to something very small.

      As a percentage…..hmmm – interesting…

      I’d say the fundamentals are “everything” but can’t give it 100% obviously…..how bout 70/30 then risk being a tiny sliver / next to nothing.

  8. anon May 20, 2014 / 12:32 pm

    Enjoy your post, when aud/jpy went down hard in 2008, Long term treasury (ie TLT) went up hard so don’t understand why you think bonds will drop this time when aud/jpy drops hard? Thanks, and hope to hear your reasoning!

    • Forex Kong May 20, 2014 / 12:47 pm

      In 2008 people actually still thought / believed U.S Treasuries where safe.

      They don’t anymore as the U.S is 100% completely broke!

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