Author: Forex Kong

Failed Cycles Abound – Gold and Euro Win

Forex Kong Got something to say?

This market has now taken out some pretty serious support, but now is essentially “too over sold to short”.

With the election looming – it would not be advised to make any large scale trades/investments or decisions as……no one wins come November 8th.

Gold miners bought weeks ago looking great as “king dollar” takes the expected pounding. No rate hike and two nut bars looking to take over the country. How could you possibly consider a “bullish” angle – short of a “pop” and then “ominous drop”?

I’m adding short USD and holding my Gold…..now eyeing “short Canadian housing” as the next big win. Currently researching the best way to hit it.

More on that soon.

dollar-on-fire

dollar-on-fire

 

 

 

1H Chart – Big Volume in Gold and Euro

Forex Kong 8 Comments

This isn’t easy by any means but……after doing this for so long –  confidence builds.

You need to trade “so small” for “so long” that you still have some kind of an account balance left – once you finally figure this out. Most traders bet the farm within the first 3 months, lose everything, get super bitter and never return.

That´s not how I roll.

Boring as hell at times…( as trading should become – once you understand it ) but….one can´t really complain while sippin a cold one in their undies.

You wanna trade for a living? Calm the f”$k down……plan your trades, and TRADE SMALL when getting started!

In any case…I digress.

As per the post on Gold, USD and Eur back like….8 days ago……everything moving according to plan.

USD taking a pounding today……gold surely holding it´s own and EUR looking very close to bottom – if not already.

Hope you’re all doing great.

 

Forex_Kong_Ready

Forex_Kong_Ready

 

 

Post Election Pop ´n Drop – A Country Divided

Forex Kong Got something to say?

It’s truly amazing how well markets have been holding up, considering “the gong show” currently playing out in the 2016 U.S Presidential Elections. Looking at it from both a Canadian “and” a Mexican perspective ( as I’m sure you all recall……Mrs. Kong – Mexican Goddess ) it’s hard to imagine:

  1. This election is happening at all, as by now I would have fully expected ( at the very least ) a Trump assassination attempt, faked alien invasion or perhaps a false flag / terrorist attack, in order for Obama to call the entire thing off and keep his seat in the Whitehouse a bit longer.
  2. Either of them as the actual President of the Unites States, considering that whichever way it goes…..the other half the country is going to absolutely detest their new leader.
  3. How markets could possibly remain buoyant as social mood quickly deteriorates in the wake of ( quite likely ) civil unrest.
funny-trump-and-clinton

funny-trump-and-clinton

There is no possible way that Donald Trump will just “disappear” if Clinton takes the helm. In fact, one would have to imagine Trump making even more aggressive moves “after” the election, as he will have millions and millions of supporters across the country that quite frankly…..I dont think will just sit idle as Clinton continues with the status quo.

Lots of talk out there now about Trump’s “master plan” – Trump T.V

So markets will likely have some kind of intial “pop” post election, as supports of “whom ever” wins rejoice in their selection. A brief period of euphoria soon followed by the complete and total opposite.

Social mood and appetite for risk will take a solid hit. I expect markets to fall hard shortly after the inital pop so….be aware.

 

 

EUR/USD – USD And Gold – Alien Knowledge

Forex Kong 3 Comments

A simple correlation – the price of commodities and the U.S Dollar.

Gold being priced in USD obviously.

As the “value” of The U.S dollar rises – Gold price goes down. When the value of USD falls….one would expect the inverse in gold. Gold moves higher as USD falls. All good?

So you should find it interesting then, that over the past few days ( since giving the green light to buy gold ) The U.S Dollar has remained strong. Suggesting to myself at least…..that “even with a relatively strong dollar” the price of gold and silver related stocks have not only remained buoyant, but have made some pretty sold gains over the past few days.

I bought IMG at 4.68 a couple days ago –  Now sitting at 5.29 – All the while USD has continued to move higher.

So what gives Kong? How can the value of the U.S Dollar keep rising AS WELL as Gold and related names?

Answer: An intermediate bottom in Gold.

I’m not talking about a nice little dip to buy, or a quick little stock tip to make you a couple extra bucks for beer….I’m talking about a large scale “fundamental shift in money flow” where the big boys are already well in position. Fully prepared for the U.S Dollar to fall – just that couple of steps ahead of you as…….you still see relative strength in USD even while the big money keeps scooping up Gold.

These large-scale “intermediate turns” don’t play out in a single day.

This will be short-lived, and here is why:

The Euro only further confirms the move currently in play as……it’s now very VERY close to bottoming as well.

Currencies don’t lie. You can’t have EUR and USD going up at the same time!

eur_bottoming_at_1-09

eur_bottoming_at_1-09

So the trade at hand is as follows. Long Gold / Silver and the miners NOW…….and short USD ( long EUR ) here in coming days…once this turn shows itself to the masses.

These “big turns” take weeks and even months for the big boys to build positions, so you don’t always see typical correlations playing out “minute to minute”. It’s my firm belief that the entire year of 2016 has essentially had the big money distributing stock to retail investors….while they quietly and patiently unload USD and scoop up Gold.

Make no mistake. It’s “Dollar Short Time” again here soon, with large gains planned in EUR longs, and a solid investment in Gold.

You think it’s backwards. You don’t think it makes sense but…….haven’t you been reading / lurking here long enough to know better by now? Once you throw currencies into your watch lists, and basket of tools to draw from…you can see things much clearer.

Big moves coming post election.

 

Invest In Gold Now – Thank Kong Later

Forex Kong Got something to say?

A golden opportunity? I should say so.

Let’s look at the technical side of things first……

buy_gold_as_an_investment

buy_gold_as_an_investment

As far as a “technical set up”goes……it really doesn’t get much better than this. Gold and the entire complex has essentially broken out of the long-term downtrend of the past “years” ( yes I said years ) then pulled back in a “huuuuuuuuge” way – now sitting at the “perfect place” to consider this as an “investment”.

Don’t f^&k around here……these kinda things don’t come about every day of the week. You don’t have to rush into anything but if I was you….I’d be inching into gold and gold/silver miners here pronto ( if not already….as I have ) with consideration of a much longer term trade than I would normally consider.

My goal here is simple. 

Take a fixed amount considered an “investment” – let’s say 25-30k and just start pounding away with small orders over the next couple of weeks. Find the trade at break even / somewhat in profit in coming weeks…..move stops to break even and don’t look at it again forever.

This is “investment talk” not trade so………don’t confuse the two.

 

Why Are Markets Trading Sideways?

Forex Kong Got something to say?

In a general sense……you can’t do shit when markets continue to trade sideways.

It’s very difficult for new traders as……you still feel that you “must keep trading” in order to keep money coming in. Trades go nowhere, you get frustrated…..then you make mistakes. Costly mistakes.

Taking a quick look at the Dow ( going back a few months ) we can see at least the past 8 weeks as virtually “unchanged”. Marketing stuck in the mud a full 8 weeks now.

 

dow_trading_sideways_for_months

dow_trading_sideways_for_months

You can’t “really” trade this, as this small amount of movement leaves little room for profit – and timing entries becomes paramount. You need to recognize it for what it is….and accept it. Then your trades / trading will improve.

I don’t really expect this to change until AFTER the U.S Election / Gong Show finally winds up in November, and will be planning trades accordingly. Smaller orders…lower expectation. More planning for the larger moves expected post elections.

It is what it is…..you’ve just got to learn to recognize it sooner.

 

 

 

 

Understanding USD/JPY – You Know You Need To

Forex Kong 12 Comments

With Japan now out of the way….we can clearly see that markets don’t dig it. The Yen is powering higher which is the absolute last thing Japan would like to see.

A strong Yen is terrible for Japan ( as a strong currency is for any nation these days ) and suggests that money is actually flowing “out” of markets – back to the place where it was originally borrowed at 0%.

asimo-is-selling-his-u-s-stocks

asimo-is-selling-his-u-s-stocks

Think about it.

Let’s say you went nuts and borrowed thousands of dollars when the interest rate was 0%, then invested it in U.S Equities hoping you could make a buck. Months later your U.S Equities trades are flat at best, but even more likely sitting at a loss. Then you figure out……hey wait a minute – if we get an interest rate hike here in The States…this market is gonna tank! You sit there thinking…..man I better get the hell out of here, or I am gonna get killed.

Imagine if they actually DO raise rates in the U.S today? You are hooooooped!

How will I pay back all that Yen I borrowed??

So you unwind your trade. You sell your U.S Equities likely at a loss…..then you have to convert the U.S Dollars “back” to Yen ( at a new rate that also hurts ) and finally pay back your loan. This is the fundamental driver behind movement in the currency pair USD/JPY. This is why it’s been tanking since markets “actually topped” back in late 2015. Everything else has been pure distribution as the big boys and heavy hitters unwind their Yen Carry trade, and it’s taken more than a year to quietly do so.

You can see it on the charts  so clearly, and now that USD/JPY is at parity……things could get pretty ugly.

Clear signs that markets have more or less topped out – and have been distributing to retail “hopefuls” for the past full year.

Little mining stocks on fire….just getting started in the larger macro trend people so……go grab a couple!

 

 

Tomorrow’s Trade – BOJ And Fed On Deck

Forex Kong 13 Comments

Blah, blah blah……as once again The U.S Fed and Bank Of Japan keep markets on their toes.

Tomorrow we “should” hear from both, which sets up a pretty tricky scenario if you are thinking about placing any trades prior to the announcements. That’s not how I roll, although…….I am still holding every single trade entered like – 10 days ago.

Conviction is great, as I am 100% certain that The U.S Fed will not be raising interest rates this close to the election but we can never EVER count on The Bank Of Japan to do what we expect. In fact…there have been several times in the past where The BOJ has surprised markets –  big time.

You are aware that the BOJ and The U.S Fed have been working together on this “propped up market” for years now right? Taking turns cranking up the printing presses as to keep these fake dollars / yen rolling into markets? 

BOJ takes the next kick at the can

BOJ takes the next kick at the can

This coordinated effort is widely known….yet poorly understood.

It would not shock me in the slightest to hear Japan “beefing up” its easing and money printing efforts in order to keep the balls in the air a while longer as…..Japan is deep DEEP in The Fed’s pocket.

If Japan pulls the trigger ( allowing The U.S off the hook ) expect markets to rally…..otherwise…we continue flat across the top. Flat across the top until the elections are out of the way…then down.

Further currency trading prior to tomorrow’s announcements is plain stupid.

Sit tight….wait and see what shakes out.