March Rate Hike – Already Priced In

The near term strength in The U.S Dollar ( although still no higher than 5 days ago…. ) is a ramp into the proposed rate hike and a clear “sell on the news” trade. It’s so obvious. Staring you right in the face as Gold’s near term slide looks to FINALLY end – in the congestion zone around 1200.00

Looks pretty clear to me, as per the previous post and information provided by James Rickards.  A “nominal rate hike” with stocks at all time highs ( when else could these bozos possibly even consider it ) and perhaps a short-term “extension” of this ridiculous euphoria….then reality, as both stocks and The U.S Dollar hit the skids.

  • USD/JPY should hit resistance around 114.85-114.95 and that will be that.
  • EUR/USD is perfectly fine here around 1.0525-1.055 ( as it’s STILL above 1.05 despite USD bounce )
  • AUD/JPY ( our “risk barometer” ) hasn’t even budged. No breakout. No nothin so…..

Don’t get too excited. Nothing has changed except of course –  further bad news on trade deficit with China and of course…..Trump instability / Tweetfest and generally nuttiness – still on the rise.

 

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8 Responses

  1. dudu erdogan March 8, 2017 / 3:31 pm

    Atlanta Fed US Q1 GDP annualized at 1.3% as of March 7, it will be cut further in light of today’s very weak January inventory data. Time to increase rates, right ?

    • Forex Kong March 8, 2017 / 3:44 pm

      It doesn’t matter…they may or may not hike – even if they do…..it’s “nominal” and will make no short / medium term difference.

      It’s smoke and mirrors…keeping the retail crowd convinced this thing is on an upswing..all the while “real data” has this hanging by a thread.

      I watch currencies..and currencies suggest this is heading lower and QE5 is on deck

      • Clinically Insane March 8, 2017 / 5:45 pm

        QE infinity …..central bank keynesians have guaranteed that.

        • Forex Kong March 8, 2017 / 6:27 pm

          Hilarious how…for those of us “in the know” this looks so blatantly obvious. The printing presses can never stop now, but the headlines just keep coming!

          The illusion of growth and economic recovery in the “soft data” while the hard data puts that idea to rest. This is as propped up / phony baloney market as there has EVER been…and fantastic for all those who have profited ( myself as well ). It’s time to ring the bell!

          The uncertainly of Trump / now Mexico pulling trade deals….China now in play – the list goes on. It makes no sense to continue looking higher, but retail needs to learn the lesson a couple hundred times before it sinks in.

  2. syron March 8, 2017 / 7:39 pm

    Curious, do you have a view on Oil Kong? Leading the way?! With this massive long overhang, I see CL dropping to 40 in the coming weeks. Today was just the start of this massacre. Will fit nicely with the news headlines next week (Oil lower because of worries about global growth bla bla) 😉

    • Forex Kong March 8, 2017 / 11:34 pm

      Oil is a bitch with respect to the global implications etc but…looks like a near term / short term rinse to me as Commods in general have bottomed.

      I can’t suggest it as a trade as there’s not enough meat on the bone for me.

      Check a much longer term chart of $CRB and see that commods in general are now just testing the 50 MA “from above” so….no real concern – just not a short term trade for me.

      I will certainly take a look if oil bumps $42 area..but might look to oil services like WNR for a play with a little more “action” money wise.

  3. BobR March 8, 2017 / 9:05 pm

    Hi Kong .. love your work and especially your unbiased takes on the markets. Refreshing to see someone say it as it is instead of the complete nonsense you find everywhere on the internet.

    What is your target for the Euro here? I know you are long; I am personally thinking we are on the cusp of a major up move here that will surprise a lot of folks.

    Thanks tons for all your work. Truly enjoy it.

    • Forex Kong March 8, 2017 / 11:29 pm

      Thank you so much BobR – very much appreciated. Please plan to stick around / contribute here – as the community of “no buillshit” investors/traders is growing quite rapidly. I so appreciate everyone who takes the time to stop in and express their views.

      Oil is oil….and a roller coaster ride IF you get caught up in the smaller wiggles ( like today???- wow! )

      I suggest pulling out to much longer term charts ( like a monthly chart ) and consider…..even 42 bucks and the “uptrend” is essentially still in place. Now couple this with a fundamental view that USD is gonna fall and I am of the mins set that oil is “OK”.

      It’s not 25 bucks anymore and likely never will be again.

      For me – fun to watch but its not a trade I’m interested in.

      EUR is currently stuck, as is gold and USD, in wake of the Fed speak on the 15th….the upper ends of where things “could go” is purely speculative.

      I would love to see EUR up in the 1.10 area but will gladly take profits around 1.08-9 once this finally flips.

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