ECB QE Plan – It's Already Priced In

Who “doesn’t” think The ECB will disappoint markets with Thursday’s announcement of its “proposed” plans to initiate full-blown QE?

Draghi is well-known for his “silver tongue” – but it takes money to buy whiskey.

In order for Draghi to satisfy the “massive expectations” of Wall St. and the global investment community at large – he better have a lot of it. I’m thinking that anything less than “1 Trillion Dollars” ( which still won’t be enough to even make a dint ) will be seen as a disappointment, as markets have already priced this in.

The Germans are still very resistant to the idea, assuming they will inevitably be left holding the bag in supporting “the rest of Europe” with their own economic output, and as I’ve come to understand it – there are still several legal hurdles to be overcome before just ” cranking up the presses”.

It would not surprise me in the least to hear “suggestion” of QE to be rolled out later this year, or perhaps some “paltry amount” bullshit program aimed to temporarily shake the wolves off their backs – either way….it will do nothing to stave off the current economic spiral Europe finds itself in.

QE from The ECB will do absolutely nothing to change the trajectory of a further weakening European economy, a further weakening U.S economy, a further weakening Japanese economy – and the list goes on.

Short of a very near term bounce ( which we’re seeing now ) I expect another series of “long red candles” coming – “post ECB meeting” Thursday.



15 Responses

  1. madness January 20, 2015 / 8:49 am

    Hi Kong,
    Unless Draghi does something truly amazing, have to agree with your analysis. The MSM may try and spin whatever he does in to an extremely positive light (as per their usual BS) but all in all, unless whatever he does goes directly in to supporting and helping those at most need, ie. Greece, France etc, can’t see how buying German debt is going to help the EU economies at all.

    Knowing Draghi, he will back up whatever he does (or does not) with words implying he will do more in the future which will get the market all excited and which they can feed of for a while longer.

    Do you keep an eye on hard commodities, oil, copper etc. you know, the factors of true economic production? The precipitous fall in these is hardly indication of a growing world economy. Do you have any levels where you think Oil/Copper will find support? I think as long as these keep falling, markets will find it hard to rally. A gradual realization that if the worlds economies were truly doing well, demand for these would surely be going up.

  2. Dressguard January 21, 2015 / 7:50 am

    It would be the first time Draghi would pull his bazooka. It’s hard for him anyway ad he doesn’t have any. More talk, less action in 24 hours from now. It’ll be interesting to see the market reaction.

    • Forex Kong January 21, 2015 / 8:25 am

      He will say / do something but the question remains how markets will react.

      • Dress January 21, 2015 / 10:48 am

        Market seems to be very excited?!

    • Dress January 23, 2015 / 6:38 am

      I was wrong. Draghi pulled a big enough bazooka and the European stock markets like it. The € almost in free fall. Tough times!

  3. R January 22, 2015 / 9:54 am

    HEre it comes… QE from ECB… euro is going to parity

  4. David January 22, 2015 / 12:09 pm

    This dollar rally is for real Kong. EUR/USD under 1.14, GBP about to be under 1.50, CAD about to be 1.24, JPY back over 118. AUD and NZD are the latest shoes dropping, 80 handle and 75 handles in focus. EUR looking more and more likely to hit parity or under, possibly even this year.

    Any change to the short dollar trade Kong?
    I’m not overly exposed, but definitely eating some losses on EUR. I continue to buy USD/JPY on dips, which is still working at least.

    • Nyen January 22, 2015 / 3:50 pm

      Kong, you let your political views mess with your trading. You were calling top in usd from July and market jest kept going higher. You at best missed monster fx move, but most probably you lost money on it. You can keep callign a top, you will be right eventually, but maybe it’s time to admit mistake?

      • David January 23, 2015 / 12:42 am

        Well said Nyen,
        Although Kong has made some very nice calls and trades in the past, as I’m sure he will again in the future, I agree, his short dollar idea stretching back well into last year has just been a terrible call, possibly his worst.

        We could very well be early in a multi year dollar move that brings USD/JPY over 130 and GBP/USD under 1.40.

        I myself have missed out on a massive move already, I thought EUR/USD looked good at 1.20, now we’re in the 1.13s with nary a retracement. Is 1.10 possible next week after Greek elections, maybe even 1.08.

        Personally I think we will at least have some sort of bounce this year against the dollar, with what I assume will be news that the US will not hike this year as being the catalyst. But the question is, bounce from where? For all we know the EUR/USD may bounce from as low as 1.08 to 1.12, and that’ll be the extent of the “short dollar move”.

    • Forex Kong January 23, 2015 / 6:50 am

      Sorry everyone…I’ve been in transit / on holiday.

      Youch!No question about it…..I’ve been smoked on a couple ( only two trade actually ) short USD trades – for sure!

      And I agree that “indeed” I’ve been hit here at least twice in the past few months looking to “build around the horn” at areas where I would have expected a top. I belive it’s called trading.

      I’m not looking to catch falling knives , and have ben stopped out.

      Admitting one is / was wrong about a particular trade is easy….you just need to get back in there for the next one.

      • Dress January 23, 2015 / 7:03 am

        Kong, you made very clear how you are trading your $ idea. No shame in that at all! Brave and honest how you are calling as it is!

        • Forex Kong January 23, 2015 / 7:06 am

          Thanks and ya….strategy wise this is how I’ve come to trade. The small orders over time essentially prevent you from getting “killed” on any one particular trade – at any one particular level.

          Obviously it doesn’t always work out so….you just start getting set up for the next one!

        • Forex Kong January 23, 2015 / 7:51 am

          I’ve also made suggestion early this week via the members area that traders just let the ECB new get digested, and look to make moves as late as Monday afternoon.

          We sighted 2047-2050 area for SP 50 rejection, and the move lower to continue.

          So many younger readers expect these “trade calls” to turn on a dime, and provide some form of “instant riches” so….everyone gets all excited about “who is right and who is wrong” within the first 24 hours of a major news event.

          Then silence across the board…when the longer term / medium term trend continues.

  5. Anonymous January 23, 2015 / 7:48 am

    At least you have your health…and a beautiful better half…and that means you are far more wealthy than most…
    best to you, Mr Kong

    • Forex Kong January 23, 2015 / 7:52 am

      Yes it’s “just trading” and it hasn’t killed me yet!

      The beautiful better half helps alot.


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