Author: Forex Kong

U.S GDP Data – Totally Bogus

Forex Kong 16 Comments

You can get in here and argue your case til the cows come home! – and I honestly hope that you do, as perhaps you’ve some insight / information that can better help me understand.

The U.S data released this morning is absolutely hilarious. Not just “kind of funny” but so absolutely outside the realm of believable that I’m literally “on the floor laughing”.

Let’s see what the markets make of both this “ridiculous GDP number” and the “magical drop” in unemployment.

I’ve only added to USD shorts as well watching Japan continue to slide with long JPY’s starting to take shape.

Short and sweet this morning, as I want to get “back to the circus” as soon as possible.

I’ve not had this much fun in a while!

USD will continue to be sold here.

 

The Correction – One Way To Trade It

Forex Kong 2 Comments

It’s simple.

The hot money out of Japan has been responsible for “a pile” of the recent run up in U.S equities, as Ben and his buddies have been busy enough in the bond market – with little success. TLT is currently priced at 102.65!

I’m pulling up this ol chart from back “I don’t know when” I first suggested what was to come for U.S bonds, the U.S dollar – and inevitably U.S stocks.

Quote: “Not much else to add here as the intermarket analysis above pretty much outlines the direction for the U.S Dollar. I feel we will likely see a time very soon, when U.S bonds, U.S stocks as well as the U.S Dollar all fall together.”

TLT_Forex_Kong_April_20

TLT in Weekly Downtrend

I really don’t think people grasp how screwed the Fed is, and unfortunately how this translates to the “middle class” of America – who will be stuck paying for it.

With 85 billion per month in effort, you can see by only a couple of “down days in the market” the Fed is absolutely powerless when the “market decides” what’s what.

You’d seriously have to ask your self what on Earth would need to occur to “reinstill confidence” in the purchase of U.S bonds/debt? Not to mention the “global move” away from USD. Tapering is impossible. QE will be doubled no question, then likely tripled.

Did I mention that recent data has just had the “Yuan” replace the Euro as the second most widely traded currency on the planet?

This may not be the “last of it” as the large majority of retail investors will view this “next dip” as an excellent place to buy….and they will be right – for a couple weeks.

You want to play the correction?

Get short Japan.

Are You Trading Any Of This? – Why Not?

Forex Kong 13 Comments

This from November 14th:

I’d expect that “this time around” we’ll likely see the price of crude reverse here around 91.70 – 92.00 dollar area, with the usual correlating weaker USD.

I’m going to start running short-term technicals on stocks here soon, as well hope to offer those of you who “don’t trade forex directly” additional options and trading opportunities.

Dig up “oil related stocks” over the weekend and plan to get long.

Oil now touching 97.00

This from November 21st:

I’m not going to get into all the details here at the moment as……I imagine the majority of you could really care less.

“Just give us the trades Kong – what’s the trade Kong??”

The Australian Dollar is in real trouble here.

AUD has already come down considerably but…..I might see a “waterfall” coming – in the not so distant future.

AUD has fallen an additional 300 pips since.

This from December 1st:

In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S

Nikkei now down -500 points as SP trades lower for 2 days in a row.

If these kinds of “market gems” aren’t providing you with sufficient information, to be placing profitable trades then I’ve got no idea what the hell you’re doing over there.

Granted you’ve got to be pretty quick these days to catch some of this but…..aside from the floating heads on your T.V just telling you to buy, buy , buy – how else are you framing “profitable” trade ideas?

I assume I need me to get more specific right?

Market Exposure – How Long Are You In?

Forex Kong 19 Comments

It’s interesting when you consider that now a days – I spend far more time “out of the market” than in.

For as much time and effort spent, you’d likely think the opposite but….as the years go by, and as you learn to “pick your spots” – you find yourself doing a lot more waiting around than anything else.

I know it’s difficult when you are first starting out. Every “blip” feels like an opportunity lost and every minute feels like eternity while you eagerly await the next chance to trade. You practically “jump” at every little move – envisioning yourself “hitting the next big one” time and time again.

That doesn’t happen to me anymore. In fact, I can’t remember the last time my heart raced – let alone picked up a few beats. Finally you come to a point where “you make your plan”, you “trade your plan” and the plan just works.

I’d say the amount of time “in the market” vs “out of the market” is likely 25% of the time.

I dig into smaller time frame charts for fun, and place little trades here and there, but for the most part I’m usually sitting near 85% cash – watching and waiting for the next “real opportunity” to come my way.

Granted….these days – they don’t come as often as I’d like either but…….you can’t “make it happen”. You need to learn to be patient.

Real patient.

Oh! Oh! What’s that I see? Is the Dollar rolling over? No! It can’t be! Oh and what’s that as well? Is the Nikkei even gonna “make it” to 16,000? Is that GBP still pushing higher, do I see a “touch of strength” in JPY?

You’ve really got to love it when a plan comes together.

Eyes On Japan – Start Following Nikkei

Forex Kong 21 Comments

It’s 11:07 a.m in Tokyo Japan right now, and traders are just getting settled in for the long week ahead.

Considering our “global market” as well the fact that Japan’s current QE program is 3X larger that of the United States – it goes without saying that I’m very interested in activity overseas. A quick look at Asian markets on Sunday night is a virtual “look into the future”, as equally skilled and experienced traders/investors evaluate the weekend’s data and start making their moves.

A current chart of the Nikkei ( I use futures /NKD ), compared to a chart of the SP 500 has both poking around at near term highs so….in that sense ( if you don’t choose to follow the Nikkei specifically ) you can imagine traders in Japan in nearly the “exact same position” as those on Wall Street.

Two separate governments, both with similar monetary policies, printing like mad with hopes they will “somehow” survive. Massive trading floors, big banks flooded with liquidity and a stock market “turned up to 11”.

In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S. Half the planet is already “up and running” devouring the news of the day ( perhaps U.S retail sales over the holiday weekend?? ) so…..what? Did you have some idea that U.S markets lead?

With a current QE program “dwarfing” that of the U.S I can assure you – in the current environment of “free money” and “print to eternity” Japan is the country to keep your eye on.

All those freshly printed Yen had to have gone somewhere right?

You don’t think the Japanese are smart enough to “jump onboard” the “bubble fest” currently playing out in U.S equities as well?

Please…….with a full 12 hour head start, I’ll see “trouble on the horizon” in Japan long before you’ve hit the snooze button.

 

Master Your Trading – Practice Makes Perfect

Forex Kong 5 Comments

Simply put…knowing the basics just isn’t enough – you know that. Especially when you consider that you’ve got money riding on it.

You’ve got to spend more time studying, observing, watching every second, in order to truly get your head wrapped around “how things really work”.

If it’s a particular stock or currency pair you’re interested in then….get it on your screen, not just a couple of times a day but ALL DAY and “really see” how the thing trades. See how it reacts at any number of moving averages, check it out on multiple time frames, draw those horizontal lines of support and resistance, watch for spikes in volume at given times of the trading day.

Throw those “bolinger bands” on it for example, and see what happens when price breaches the lines. Check a simple RSI and see what levels the thing starts to turn on. Brush up on your japanese candlestick knowledge and learn to identify significant formations.

Follow a given stock, currency pair, or any asset for that matter for a FULL WEEK no MONTH! Every single second that you can bear staring at the computer so when you step out onto the field, you take EVERYTHING you possibly can with you. KNOWING you are about to face the toughest team on the planet.

These guys have been playing professionally for YEARS!

Practice your entires, even if just in your head, then check back to see if you’ve improved over the last time.

Study those fundamentals so you’ve got a heads up on what type of price action to expect “before” announcements are made. Take Sundays to “put a plan together” for the following week, then see if things play out as you’d expected. If not – do it again next Sunday.

I can tell you from experience..there is no other way around it. The odd “hot tip here or there” will always be a possibility but to consistently “round those bases” you’ve got to dedicate considerable time and effort. You’ve got to stick with it.

I think you can do it….but the question really is – do “you” think you can do it?

Well enough with the motivational speaking – you know what I’m getting at. If you are here to learn then I suggest you “step it up a bit” and start chewing on some of this in your down time. There is a never ending list of things to study, and the great part is…the market is likely gonna be there forever so – you’ve got time!

I’ll be in the kitchen if you need me.

Master Your Trading – Through Observation

Forex Kong 5 Comments

Let me ask you a question.

If you’d never watched a game of baseball a day in your life, then fell in love with a “baseball fanatic”…How long do you think it would have taken you to get the gist of things?

You’d stroll by the T.V a couple of times…then maybe peruse the odd magazine lying around the house, pick up on a bit of the “lingo” and who knows? – maybe even ask a couple of questions about it yourself! Next thing you know…you’ve got the basics. You see the batter, you understand the guy needs to hit the ball then run around the “diamond”, touching all the bases in order to score. You understand that it takes 9 “innings”, and the team who’s had the most guys run around the diamond in that time – wins.

Basic. Very basic.

Now…..how bout the “double play”, or maybe the “bunt”? Have you considered the pitcher’s ability to throw that tiny ball with a “curve”?  Have you covered “stealing a base”?

Nope. Not so basic.

The question is…..Would you really “ever” take a deep enough interest in baseball to understand it through and through? Literally…to know ever single facet of the game, no questions asked , bang ! boom! wow! – You’ve got this down!!

Absolutely not. So now….with your “vast knowledge” of the game, your “deep understanding” of every nuance – imagine……………………….. you’re asked to step out on the field and “actually play”!

Have you ever even “held” a bat? Can you even run?

More later……..

USD Bullish Or Bearish? – You Tell Me?

Forex Kong 36 Comments

I think it’s fantastic that I’ve “managed to wrangle” a number of intelligent readers here at Forex Kong, and that these guys also offer their opinions / beliefs / suggestions and projections.

You can surf around the net for a “looooooong time” searching for some of the “nuggets” that turn up in the comments section here at the site, with a large portion of these insights coming from a “small handful” of some mighty intelligent people.

Yesterday’s post on “the proposed downward slide of the U.S Dollar” brought about a couple of fantastic “alternate views” which I appreciate in that – we enter the world of “speculation” when we start looking out over longer periods of time – where in theory “it’s impossible” for anyone to “actually know” how things will play out.

Throwing the ball around with others allows for a better perspective, an acceptance of alternate views and an “opening of the mind” should you be so closed as to only consider your own ideas, as correct.

The future path for the U.S Dollar (having such impact on all else) seems like as good a place to start as any so…..I welcome “any and all” to weigh in on this post ( as I will leave the comments section open for eternity ) as to provide a lasting resource for readers in the future.

USD bullish or bearish? You tell me?

USD Headed Lower – And Then Lower

Forex Kong 24 Comments

This won’t come as a surprise…coming from me but – USD is headed much lower.

I think it’s about time – we’ve had enough of this “mucking around” at these levels, having more or less “danced around” the past few months. It’s time for the next leg down.

I don’t have time here this morning but if you want to pull up a general chart of the $dxy or in some platform (like stockcharts) $USD, I’d get your sights set on a serious of long red candles taking us down into that area around 75 – 72 in coming months.

If this “doesn’t” correspond to an “inverse move” in the price of gold and silver ( looking at is as such a dramatic decrease in USD value ) I will be forced to take on “the Habanero challenge” as I have offered several times in the past.

Up 3% overnight alone with the majority “still coming” from trades entered in GBP vs Commods in the weeks past. I suspect the Nikkei will “attempt” a solid double / retest top at 16,000 ( the high from May ) as JPY futures inversely “double bottom” shortly.

Enjoy:

China Drops Bombshell On U.S – Quietly

Forex Kong 15 Comments

China just dropped an absolute bombshell, entirely ignored by the mainstream media in the United States. The central bank of China has decided that it is “no longer in China’s favor to accumulate foreign-exchange reserves”. So in other words – China sees little need to continue “hoarding” USD as they have in the past ( in order to keep their own currency suppressed ) and is likely to stop purchasing U.S Debt as well.

As well China also announced last week ( again – completely ignored in mainstream media ) that they will soon look to price crude oil in Yuan on the Shanghai Futures Exchange, bypassing the need for exchange in USD.

The implications and ramifications are massive.

  • China is now the number one importer of oil in the world, and will soon openly challenge use of the petrodollar.
  • Dropping the purchases of U.S denominated debt leaves only the The Fed (as no one else in there right mind is buying U.S Treasuries ) so we can likely expect further downside in bond prices…and of course the dreaded inverse – rise in interest rates.
  • When China starts dumping dollars and U.S denominated debt, it’s pretty safe to say the rest of the world will too.
  • Allowing the Yuan to in turn “appreciate in value” will make all those wonderfully cheap products sold in The United States much more expensive.

In all….this is likely the largest , most significant story / issue now facing the U.S as China’s “backstop” to the U.S Dollar and never-ending purchases of U.S Debt “until now” have been primary drivers in supporting “whatever it is you call this” economic recovery.

Pulling the rug on U.S Dollar and debt purchases is without a doubt the move that “takes the queen”.

Checkmate next.