The Turn – Draghi And I Can Taste It!

You can almost taste it can’t you?

Every single chart you view / analyze sitting “right on the cusp” – with just a “tiny push needed” to put this thing into the “golden zone”.

Draghi should provide that for us on Thursday when markets “finally understand” that Mario Draghi and the European Central Bank will not participate in the ridiculous “currency devaluation practices” put in motion by both Japan and The United States.

If a piddly “interest rate cut” is actually in the cards….it’s more than already priced in, and the idea of “massive dilution / bond buying” etc is completely and totally absurd.

Germany runs the show in the E.U, as the only country with an economy worth a damn.

Draghi can’t “act” on behalf of a dozen countries, as there “is” no European bond….and he “can’t legally” devaluate the Euro.

Christ…..imagine if Canada and Mexico where ever foolish enough to allow / agree to a “North American unified currency” with the U.S Fed at the helm?? He he he…..impossible. Speaking on behalf of “both” countries….. I know for certain – the people are much smarter than that.

Wait til U.S stocks are literally “chopped in half” and then imagine what that money printing solved. Bahhh! Nada.Zip.

So we sit patiently for yet another 24 hours. I’m cool with that.

Draghi is “once again” getting ready to to do what he does best.

Absolutely nothing.

The pool of saliva on my trade terminal widens as it’s getting difficult now to even touch the keys without gloves on.

Gross I know but……..isn’t this market just disgusting anyway?

 

19 Responses

  1. Kanastel June 4, 2014 / 5:47 am

    Hey Kong,
    You’ve been “warning” us not to watch CNBC (which I doubt any of your readers do anyway) and that US stocks are on the verge of a massive drop for MONTHS now. And still, it keeps on rising. Don’t get me wrong, I completely agree with your and Zero Hedge’s view on economics and financial markets, but maybe it is time to understand that the big guys at the Fed are stronger that economic theory, that they have weapons of mass destruction and that this SP500 joke can last a looooooot lot more. No?

    • Forex Kong June 4, 2014 / 6:37 am

      Sure it’s crossed “all our minds” with consideration of that ol saying “don’t fight the Fed”, but considering that currencies haven’t really been playing along and that most ( if not all ) my trades over the past months have been bearish – I can only go with what I see.

      The Equitiy markets are the last place on Earth I’d look for anything “fundamental” as you’ve got it….the Fed has blurred the lines to such a degree that “regular day thinking” would have anyone assuming things will just go up forever. This is dangerous to me, as we’ve already seen the MOMO stocks get hammered ( and from what I understand – lots of bulls get taken out ) so the advice here has been at least “prudent”. We know tops are a “process” and not a single “event”..so….if trading through it….one needs to pick a side / look for their spots where they can find em.

      I don’t believe the SP joke can last much longer no, and I also beleive that the entire first 6 months of 2014 will have merely been a blip as the big boys finish their distribution to retail investors….all knowing they are soon hitting the exits.

      It’s been frusrtrating for sure…in fact the toughest trade environment I’ve ever faced but I’d much rather be “preparing” for the next “real move” than get caught up in the phony baloney.

      Great stuff Kanastel. Cheers.

  2. dave June 4, 2014 / 3:03 pm

    Hey kong thoughts on usdjpy are you still bearish thx

    • Forex Kong June 4, 2014 / 7:50 pm

      You bet……we’re just at the top of the range going back some 5 even 6 months now!

      What “has gotten better” fundamentally to consider “all up up up from here”?

      Zip man…..things look worse than they did 6 months if you ask me with Q1 U.S GDP coming in “recessionary”.

  3. Alex June 4, 2014 / 7:24 pm

    Hey Kong, so considering your scenario whereby Draghi will cut rates (useless for the economy but anyway), maybe come up with some unconventional measures but nothing close to a QE or any form of FED/BOJ type of money printing, what do you expect for the Euro to happen (in the very short term after the news and mid-term thereafter). Could the “market” sort of punish the common currency by making EUR pairs shoot up significantly as if saying: “Hey Draghi, you’ve been talking for 2 years about acting and doing something really good for us, (such as the free money from so-called Central Banks – “L’air du Temps”) so time’s up now sort-of-thing? Are you still expecting the Yen to strengthen and AUD to sink at one point? Thanks for your site. Un chico en Londres

    • Forex Kong June 4, 2014 / 7:58 pm

      I expect EUR strength following Draghi dissapointment.

      And continued JPY strength / AUD weakness medium term.

      Everyone has to understand….tomorrow is no “mystery” to the bankers. You don’t think everyone’s been on the phone these last months getting things in order / making their plans etc? No one can honestly imagine “the banks” taking the short end of the stick in any of this right?

      There’s nothing more to tomorrow than the media spin and the continued “fleecing” of mom n pop at home. No one “really expects “QE” out of Draghi….as it’s essentially impossible.

      Imagine “starting to print” while the 2 other largest printers / economies on the planet now consider tightening? EU Zone printing “into the fire”?? Impossible.

  4. Magnetpal June 4, 2014 / 8:23 pm

    Hey Kong, great post. However I disagree with you that Draghi will do nothing. He is a creative, poker face, smart arse:). He always comes up with something that dazzles the market! I expect him to come up with something which will smash Euro! This is his best chance and why do you think he will blow it?

    • Forex Kong June 4, 2014 / 8:30 pm

      That’s what makes a market my friend – make yer bets! step right up! Lol.

      I don’t bet on Central Bankers especially one with a shared currency such as the Euro. He’ll pull a “token rate cut” ( if that ) and even at that – he can’t act on behalf of ALL countries in the E.U hence the “disaster of a currency” the EUR is.

      We’re finally seeing it now…as these “individual countries” suffer thru unique economic circumstances of their own. It’s a gong show to say the least.

      I expect markets to sell on the “lack” of news.

      • Forex Kong June 4, 2014 / 8:34 pm

        I’m a EURO buyer here but of course…..”After” we watch the retail fireworks.

  5. John June 5, 2014 / 8:24 am

    Kong, just another bear that can’t get the timing right. Eventually it will go down is your motto, well no kidding! How much value are you providing? You called a top already, along with every other bear out there! Listen, no hard feelings, I like your commentary however off base you have been with your predictions.

    • Forex Kong June 5, 2014 / 8:51 am

      John.

      You’ve got to look closer at currency markets specifically as well “intra market” as…..The Nikkei topped MONTHS AGO!

      A top will never be a “day’s call” as these things take months…and in this case ( considering the significance of the turn ) you can’t just let a couple of “elevated stock prices” dictate your vision of a top.

      I hear you loud and clear but please appreciate – I write a blog, I trade, I make a living….we all make decisions in this game as best we can.

      Oddly ( as much as ya for sure…these last few SP points on zero volume suck ) I still stick with the TOP call..looking at things far more relevant ( such as the Japanese Nikkei making it’s first “lower high” just now ) and leading the way during 2007 ‘s fall.

      I so appreciate where you are coming from John, and if you’ve read / understand some of my trading principals – “I place many small orders over time” as the core part of my trade strategy so….this thing can go on as long as it likes. I don’t care how long it takes.

      • John June 5, 2014 / 8:58 am

        Well said, and didn’t mean to come off as all knowing because that I am not! For the record, I believe we have topped here.

        • Forex Kong June 5, 2014 / 9:05 am

          Not at all John….I know exactly where you are at and….

          Top calls are ballsy / fun / stupid / nutty so….from the “blogging perspective” please understand – I have fun with this too!

          I know how most guys won’t “put it out there” for fear of ….well ( this! if you where some punk / troll ) so what do I do?

          I fire away! As conviction holds at least “some” water I hope.

          All good John – great feedback

  6. Anonymous June 5, 2014 / 8:33 am

    Hi Kong

    Do you publish your individual trade results? I know you post an amount on the side (which has been 39% up for a while …. which is suprising given some of your recent trades shown on here). Not trying to be antagonistic, but how do I know you aren’t just making up those numbers on the side?

    • Forex Kong June 5, 2014 / 8:53 am

      I’ve not been keeping up with the updates since starting the members area – that number should be much higher.

      I’ll edit / update it now.

      • Anonymous June 6, 2014 / 3:30 am

        Where are the individual results? Anyone can update the side and write 50%, 70% whatever. Before joining any members service how can i see you really are making profit?

  7. Rob June 5, 2014 / 11:08 am

    Kong, this is kinda irrelevant to the post above but pertinent towards trading. How important is it to stick to a consistent set of pairs? For example, I noticed that when jumping around and trying to pick the “best set ups” on 28 pairs, my account equity suffered as I found out even the best looking set ups can go against you. This constant jumping around caused me at times to miss set ups on pairs, and also, at times, be too correlated on a particular currency.

    Therefore, I had read to stick to a smaller list of pairs, now I trade 20, and don’t even trade 8 other pairs. I find implementing a system more “consistently” on a “set” amount of pairs creates a little more “order” to the chaos that is markets. I was just curious what your thoughts are on having a “set” amount of pairs, and if you do in fact trade only X number of crosses (that is you don’t bother with some pairs at all).

    Thanks

    • Forex Kong June 5, 2014 / 1:03 pm

      I don’t bother with pairs that range or are closely correlated such as EUR/GBP or AUD/NZD.

      I always look for the largest moves pitting “safe havens” against” risk related” first and foremost.

      In general…it usually only amounts to around 10 – 12 pairs under contstant evaluation…with trades in 8-10 perhaps at a time.

      Once in a while I’ll “gang up” on a given currency in seeing it’s weakness and play it “specifically” across several pairs….and at other times ( as you do as well ) I find myself saying “hey wait a minute here!” I’m a little too heavily short “x”. Then re adjust.

      28 seems like an aweful lot to me and still being able to remain focused.

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