Month: May 2014

Eastern Ukraine To Separate – Not In U.S News!

Forex Kong 10 Comments

I can’t believe western news coverage of what’s happening in Ukraine. Outrageous.

Have you not heard the “real news”? Unreal.

The people of East Ukraine’s “Donetsk Region” are holding a referendum vote this coming weekend, with every likelihood of ” overwhelming support” to separate from Western Ukraine, and become another republic of Russia as did Crimea some weeks ago!

These people don’t want to be part of Washington’s circus side-show in Kiev! They don’t want to fall under the rule of the money hungry over lords from the West!

There is no “Russian army” killing the innocent people of Ukraine, no force, no “invasion”! The people of Eastern Ukraine are trying to “leave”! They want to separate! No war / guns needed!

The only group looking to take this out of the people’s hands ( who should have, and “will have” the right to decide for themselves ) is the U.S!

I can’t stress enough the significance of Ukraine and what this represents from a global perspective, and in a matter of days you’ll get to see it for yourself, as the people of Eastern Ukraine vote “whole heartedly” to leave Ukraine and join Mother Russia.

Once again O”bomb”a will be made a fool of ( as he well should be ) continually poking his nose where it most certainly doesn’t belong.

The people of East Ukraine can decide for themselves, and trust me, “not” with guns pointed to their heads.

They want to separate!

USD making the turn here exactly as expected. Markets to continue lower – as expected.

More real time trade chat and daily strategy at: www.forexkong.net

Can Yellen Save The Dollar? – Why Would She?

Forex Kong 3 Comments

I expect U.S Equities to roll over here and continue on their way down.

Perhaps some imagine that Yellen will have something to say this morning to “once again” pull markets back from the impending sell off – but I don’t.

If anything I would more so envision the “opposite” as….if there is anything Yellen “needs to say”  it’s something to save the U.S Dollar from falling much further.

This is very thin ice USD is walking on down here…very thin as the rest of the planet really won’t stand to see this thing ( and their billions of useless USD toilet paper stacked in reserve ) go down much further.

the opposite effect of this falling dollar has been “killing the EU Zone” with a rising EUR as well the U.K, New Zealand etc – all getting a little fed up with seeing their own currencies “flying higher” ( and killing export opportunities ) while the U.S devaluation continues.

And don’t kid yourself…the “QE” hasn’t changed in the slightest as it’s only a couple of numbers typed on a computer ( the tapering whatever ) with no “actual real world application”.

A couple of numbers on a couple of screens at the U.S Fed and Treasury Dept to keep the media spin going. That’s it .

Means nothing.

Perhaps a “tiny hint” that interest rates may rise sooner than later will do it….but then again The Fed “just told you” that won’t happen. Or was it the week before they said it “might”?

Or not? The Fed “loves” a lower dollar…it’s everyone else that doesn’t.

These people are literally “winging it” here day-to-day in a continued effort to rid you of your cash.

I’m tuning in to watch.

 

U.S Equities Top Call – The Top Is In

Forex Kong 5 Comments

Hey you only live once right, and in nailing the Nikkei a couple of weeks ago….we might as well just go for broke here. I’ve got absolutely nothing to lose anyway.

The Top Is In!

Peaking on Friday, and now continuing on its way lower U.S Equities will now “finally” roll on over.

With the momo names in tech “quietly leading the way” over the past few weeks, and the Bank Index $BKX flopping around, we’ve now seen what we might call ” final capitulation” in the U.S Dollar to top things off.

A strong U.S Dollar bounce on “repatriation” will only be fueled “more so” by the selling of equities “also priced in USD”.

The money has to go somewhere right? So when you sell something priced in U.S Dollars that money then goes back into your trade account / bank account and BOOM! USD cash position moves higher and higher.

The coming move in USD should put considerable pressure on commodity prices as “they too” shall fall.

And U.S Bonds? Would you seriously want to own a U.S Bond?

Not me.

We continue to frame trades with a “risk off mentality” including long USD positions as well “waiting in the wings” for  several long JPY positions as well.

The members area now in full swing at www.forexkong.net

 

USD Tanks – The Move Is Suspect

Forex Kong 5 Comments

The U.S Dollar just broke down past the previous daily low, suggesting that either “the big big low” is still out there in front of us….or “this” is indeed “the one” and it’s stretching past any and all technical indicators / levels in order to take out the most players.

I’m sure we can all agree that any given asset “does this kind of thing” at significant turning points, and that “nothing is given to you easily” when it comes to timing these things.

Discussion picks up in the Members Area throughout the day.

That said….further patience is required.

From a fundamental standpoint I find it very difficult to imagine further weakness in USD, and I’m “leaning” towards “this being” the significant low that I’ve been hunting for – although technically we’ve now seen indication that “further lows” could still be out in front of us.

A quick chart:

USD_May_06_Forex_Kong

USD_May_06_Forex_Kong

Considering I am “only now” in the red on a couple of these early entries I am taking profits on GBP/AUD and in turn scrapping NZD/USD for break even, and will remain holding the few smaller “long USD” positions as well short AUD/JPY for the remainder of the day.

This is as close to a “near term bottom” as we can get, so no “panic selling” as that’s what’s expected of retail here.

Because You're Mine – I Walk The Line

Forex Kong 1 Comment

Another day……another “year stripped from your life” with respect to the amount of stress / tension / anxiety and general frustration you “harbor and absorb” as a trader. I imagine investors as well – feeling a bit of a pinch as “indecision” continues to rule supreme.

Monday’s are no time for decision-making anyway, and should just as quickly be stricken from your future trading plans. Don’t look to trade “jack shit” on Monday. Period.

1876. Fudge.

A bit of a mouthful but..for the number of times I’ve seen it appear as a significant level in SP 500 , I will now consider it for the name of my future pet, be it of this planet or another – human, canine or other.

This seriously can’t go on much longer as nothing moves in a straight line ( however flat ) forever.

The endless debate. Up or down – tiring to say the least.

My take? As wacky as it may be?

Time and price intersect when the “time” and “price” are right ( a topic for another day ).

I think we’ve got our price so…..now we’ve just got to let “time” do it’s thing – and all will be clear.

Check out “risk in general” as seen over the past 4 months via JPY / The Japanese Yen futures.

 

JPY_Trading_Range_Forex_Kong

JPY_Trading_Range_Forex_Kong

The Fed’s got it that “tightening” is now the path forward ( if you actually believe that ) so….this current talk of The European Central Bank “now” looking at QE?? As well the Bank of Japan looking at “further QE”??

Something doesn’t quite fit if you’ve any idea how this all fits together…

The Central Banks need “coordinated effort” to keep these balls in the air so…we’ve got to see this resolve shortly as the message is unclear.

Is the punchbowl getting refilled? Or is the party finally over?

I can assure you ……another couple of points in the SP is “no indication”.

Ugly “two day candle formations” across the board as clearly…both bulls and bears take another hit. “Time” can grind your mind and your account to pieces….and they’ve got all the time in the world. Stay safe. Make no big decisions, protect profits and at least “imagine” how you might consider making money in a bear market.

 

 

Conviction Market Call – Where To Next?

Forex Kong 3 Comments

Speculation as to “where markets are going next” is running rampid across the various forex, stock trading, news outlets and financial blogs these days, with a pretty equal split between both the bulls and the bears.

And for good reason as….It’s an absolute meat grinder out there.

This being said “caution” is likely the best suggestion anyone can make while markets continue to “sit on the fence” but you know…..you’ve really got to “go with something” as lack of conviction won’t really do much for you either.

Reducing position size or going to a cash position is never the wrong thing to do, so there’s always that….but again – we’re looking to “make some money here” so if it’s a bit of “hard work that’s required” well then?….We’re gonna do it!

I’m going to simplify and keep this short.

The largest QE program on the planet ( coming out of Japan )  is currently doing “nothing” to elevate Japanese stocks as the Nikkei “will” continue to fall here. This is significant in that…if the QE money isn’t doing it anymore ( as well consider the QE money in the U.S now evaporating monthly ) what on Earth would it take to continue pushing higher?

Nikkei_May_04_Forex_Kong

Nikkei_May_04_Forex_Kong

I believe that the “near term” wind has certainly come out of the sails, as U.S “momo names” have also taken their “first leg down”, with Twitter cut in half ( from 75.00 – 37.50 ) and Yelp soon to follow.

The analysis / theory is simple…..just follow the money.

Who’s printing the most money? Where’s that money going?

Do you seriously think the “world at large” is rushing to the “supposed safety” of U.S Bonds for anything more than a short-term trade?

I don’t….wait – I do…..no…..wait ( U.S Bonds are gonna top out here pronto ).

These things take time yes. It’s a grind yes, but there are many excellent trades setting up for those who are patient, and for those willing to do a little work.

I remain short the Australian Dollar ( risk currency ) as well am keeping a very watchful eye on all JPY pairs as these “will” move fast and hard with further weakness coming in Japanese stocks.

I continue to look for a stronger US Dollar on the “repatriation trade” and see us at a significant turning point here. Should USD fall lower it will only mean the trade has been “put off” a touch longer as much further weakness in USD will have some larger “ripple effects” with our friends across the pond.

I don’t believe the U.S can allow USD ( if they can really help it remains to be seen ) to fall much further without risking a serious, serious knock to whatever credibility it still has left.

Lots of great stuff on tap this week, so good luck everyone!

 

 

 

 

I Lied To The Bank – Hello Internet

Forex Kong 13 Comments

So I lied to the bank.

At the time I was just a starving musician, living in an illegal basement suite, moonlighting as a “commercial painter” with a group of misfits I’d met at the bar. Clinging to ladders by day, and my dreams by night – I “painted and played” enough to keep myself in “beers and macaroni” ’til the day I first caught wind of some thing they called “The Internet”.

Hello Internet.

I’d been involved with computers from a relatively early age. Deemed a “gifted child” somewhere around the age of nine, I was fortunate enough to of had a particular school teacher take an interest in me. Living in a remote area, far, far from anything….incredibly – I was given the opportunity to learn. And so I did.

It took me about 15 minutes to whip up that “skeleton business plan” I presented to the Royal Bank of Canada, outlining intentions of starting a “commercial paint company of my own”, and leaving my employer in the dust.

Loan granted, I walked directly across the street and blew the entire $3200.00 on a brand new PC computer.

Hello Internet.

Six weeks later the loan was repaid in full. Three months later I was spear fishing off the tiny Islands of St Kitts, Nevis – hosting “lobster boils” at my beach side condo.

Good bye Canada.

Hello Internet.

And so it begins……

A Chart – For Those Evaluating Risk

Forex Kong 3 Comments

I’ve made light of it before as it’s a handy thing for “non forex traders” to also consider keeping in mind.

The currency pair AUD/JPY has long ago been directly associated with the “risk on” trade, as traders simply borrow ( sell ) Yen ( as the base lending rate in Japan is practically 0% ), then invest (buy) the same money in a higher yielding currency such as AUD ( base interest rate currently paying 2.5% )

It’s essentially free money, and rests pretty much as “the backbone” for most major banks – as far as  forex strategy is concerned.

When this trade “unwinds” ( when risk appetite wanes, and banks and major investors begin to seek “safety” ) you certainly don’t want to be on the other side of it – as the move is nothing short of amazing.

Lets take a look at the “unwind” back in 2008, and consider where we’re at with the pair today.

 

AUD_JPY_Forex_Kong_May_1_2014

AUD_JPY_Forex_Kong_May_1_2014

The pair “peaked” right along side “peak activity” surrounding the Bank of Japans massive QE program and equally massive dilution of the Yen, sometime “around this time” a full year ago.

We can see that it’s done very little since, as “risk” apparently rages on ( as seen via U.S Equity prices ) in the West.

A “swing high” here marking a “lower high” on a monthly chart would prove to be a very, very powerful technical sign that the turn is indeed near, as big banks and institutions will have used these past few months to quietly whittle away, adding to positions here, selling a bit there, getting themselves into position slowly as to not turn price against them with any large-scale moves.

Until of course the large-scale moves commence ( as seen via the “red candle waterfall” of 2008 ) where the big boys have already gotten out  and retail investors “unknowing” get caught holding the bag.

One has to consider that “if the Big Banks are running the show” ( as we all know they are ) – don’t you think they’ve got the info / knowledge / plans in place long before we ever hear of them?

Do you think the biggest players on the planet get “caught” suddenly realizing that things are turning? Or perhaps because they missed a bit on CNBC? There is absolutely 0% chance of this as it’s this is  “their market” and the house always wins.

Equities in the West continue to grind as the turn has already been realized in Japan. These past 4 or 5 days are again what we call “distribution days” as big players unload to those late to the party, in preparation for the next “real money to be made” on the short side of town. Currency wise a large and solid “short AUD position” has been building for quite some time, as other “risk off trades” slowly fall into place day-to-day.

 

Very relaxed here as positioning is well underway and the tiny squiggles don’t really mean much at this point.

I can’t see how unemployment data out of the U.S ( 344,000 more last week ) could be helping anyone with their medium and longer term trade ideas, but I’d love to hear the arguement.

Good luck everyone, and have a good weekend.