Kong In Cash – Tomorrow Will Crush You

I have closed all positions Long JPY ( thousands of pips profit in total ) as well all USD trades and am now 100% in cash.

Tomorrow, potentially  brings with it one of the largest “market moving” events/announcements of not only this past year….but perhaps even the last 10 years – as The U.S Fed looks to either “raise interest rates” ( .25 token move if at all ) or sit tight.

Either way ( once the dust settles ) it’s all bad news for USD and likely risk in general.

I have no opinion on it…..as it makes absolutely no difference to me.

The U.S Dollar is no longer viewed as a safe haven. Further QE is coming……so tomorrow is just another day.

I do however recommend “what ever you decide to do” – do yourself a favor and wait until “at least” Asian markets express their views or likely even better….the following day in U.S trading closer to the closing bell.

There is no trade until the fireworks end. …unless of course you enjoy having things blow up in your face.

I’m not much for that.

Good luck everyone!

 

 

 

 

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4 Responses

  1. Chris Sargent December 16, 2015 / 1:22 am

    Yea it is going to be an interesting day.    But as always the us keeps moving forward. Make a decision and act on it. Sent from my BlackBerry 10 smartphone on the Rogers network. From: Forex Trading with KongSent: Tuesday, December 15, 2015 6:47 PMTo: sargent@shaw.caReply To: Forex Trading with KongSubject: [New post] Kong In Cash – Tomorrow Will Crush You

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    Forex Kong posted: “I have closed all positions Long JPY ( thousands of pips profit in total ) as well all USD trades and am now 100% in cash.

    Tomorrow, potentially  brings with it one of the largest “market moving” events/announcements of not only this past year….but p”

  2. Hisham December 16, 2015 / 10:46 am

    I usually do the same, liquidate before such a big event. But what do you think about getting in shortly before the news (predicting the USD will weaken) with very small SL, and riding the market that way. Of course the SL has to be very small so “things don’t blow up in your face”, but if the USD indeed does get weaker, then you’d be sitting in a nice quick profitable trade.

    Is this asking for trouble?

    • Madness December 16, 2015 / 12:30 pm

      Hisham:

      All depends on what sort of broker you use. If you use any of the retail bucket shop brokers, they will hunt your small SL very very quickly so it just wont be worth it.

      Even if you trade through a reputable broker, fact is any unexpected announcement could simply gap through your SL and you’d be filled at a much worse rate (just look at what happened when the Swiss National Bank abandoned their currency peg in January this year, CHF pairs gapped 20%-30% depending on who your broker was. A couple of retail brokers went broke and numerous clients had huge negative balances despite placing Stops as market simply gapped through them.

      Remember it’s not just the announcement, there then follows a Q&A 30 minutes later where Yellen may well doctor her answers depending on how the markets reacted in the interim 30 minutes.

      Part of being a good trader is just being able to sit on your hands. There will always be future opportunities.

      Hope this helps.

  3. Madness December 18, 2015 / 2:38 am

    Hi Kong,

    Been a great few days 🙂

    I think the fact that the FED has pencilled in at least four rate hikes next year (whether they do or not is immaterial for now) and that is why the US$ has been strong since the decision as no one expected this. Whilst everyone expected a dovish statement, the four target rate hikes has caught everyone by surprise, although the MSM has not really mentioned that at all – go figure.

    Still if you look at the risk off barometers, short JPY against commodity currencies, they tell a different story.

    2016 should be a serious risk-off market especially for US equities – I believe it started yesterday morning once everyone woke up to the fact that the FED has a much higher rate in mind and the fact that the FED has basically raised rates when the US is entering a recession.

    Even more evidence is that last night, the BOJ increased QE of sorts and this temporarily lead to a spike in the JPY pairs but within an hour, all these gains were reversed. A sure fire sign that the BOJ has all but exhausted in arsenal of QE, just like the ECB and FED.

    Am short SPY from last night, and will look to add to shorts on any rally especially above 2064. There is Opex today so this may lead to some shenanigans but am expecting SPY to topple over now. Lets see if stock holders have the courage to hold on to their positions before the start of the New year.

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