Author: Forex Kong

Old School Correlations – Late Night Thoughts

Forex Kong 7 Comments

I’ve been watching the market like a hawk these past 2 days.

I’d spotted the weakness in USD, then in turn the Japanese “Nikkei” pushing up to its prior level of resistance…then it’s rejection, discussed the likelihood of the Japanese Yen (JPY) taking on strength in times of “risk aversion”, and just in the last few hours suggested that commodity currencies are under pressure.

I’ve taken on the “insanity trade”, and have been actively posting just about everything I can ( here and via Twitter, Google+, Linkedin and Facebook) over the past 48 hours as to what I’m looking at – and what I’m up to.

So what the hell  – here’s another nugget.

I’ve exited all “USD short” positions, and am currently looking at “risk off” type positioning via “long JPY” ideas, as well a couple other “crafty variations on risk” short AUD as well NZD.

The one variable I’d not really not “nailed down” this time around, was weather or not USD would “fall along side risk aversion” ( as it has several times these past 2 quarters ) OR if the old school correlation of “risk off = USD up” might rear its ugly head once again.

Global “risk aversion” WILL have USD as well JPY shoot for the moon as “safety is sought” on a macro / awesome / unbelievable / nut bar / chaotic / monumental level – while “risk is sold” in equal fashion.

I’m pleased to be free of any USD related trades, and almost hate to say it but…….we “could” ( and I do say “could” ) be close.

Kong “debating long” USD.

JPY pairs are most certainly rolling over here as suggested with Nikkei making it’s daily “swing high”. Commods look weak so that’s pretty much a given trade. What remains to be seen is where we fit the good ol US of D. My “hunch”? – We’ll have to wait a day for that.

Was That It For AUD? – Looks That Way

Forex Kong 17 Comments

As you all know I tend to be a little early with some of my market observations / calls.

After studying these charts for as many hours / days / years as I – you start to see things a bit differently. As many of you are likely “just now” getting familiar with commonly occurring patterns and price levels, and starting to fit some larger “macro analysis” into  your daily trading, I tend to see things the same things playing out – over and over again.

We’ve hit the “resistance zone” I suggested yesterday in the Nikkei, as well I see a “swing forming” around 1680 on the SP 500 futures, coupled with a tad bit of Yen strength and a continued weak USD.

Let’s throw in a generally weak AUD as well NZD ( the New Zealand Dollar) and what have we got? Just another “up/down churn day” or perhaps the start of something more?

I’d considered some time ago that any strength in AUD would be short-lived, and I now see that this could be about it – or at least a reasonable level to look for a trade.

Keep an eye on AUD through today and tomorrow for further signs of risk coming off.

Trading Tuesday Night – What I'm Watching

Forex Kong 18 Comments

I’m watching the Nikkei ( The Japanese Equities Index ) for “any” sign of reversal considering that it “has” pushed through the overhead downsloping trend line that has been so well-respected in the past.

In fact…..this is more like a “20 year” down trend so….you can understand my current skepticism.

https://forexkong.com/2013/05/25/nikkei-20-year-chart-rejection/

Considering the current “headwinds” I find it very hard to believe that “now is the time” for a massive breakout / reversal in an area of resistance / trend going back some 20  years.

Otherwise, Im looking to see the correlation and movements underway in the precious metals and USD, as well keeping my eye on those longer term U.S Treasury Bonds.

We’re pretty much at a point where a number of these longer term correlations need to either “stay the course” or “make their move” – with “tapering or no tapering” the primary driver.

With Japan pretty much in the driver’s seat “liquidity wise” a keen eye on the Nikkei and its inverse relationship with the Yen will provide the first signs of reversal in risk.

I’ve taken profits on all “short USD” pairs, but will likely set up orders “above or below” current action in several pairs and look to catch further movement with momentum. I’m also still holding a couple small trades ( in the weeds ) long JPY – but have little concern as these will only be added to / kept.

written by F Kong

Forex Market Volume – Where Is It?

Forex Kong 9 Comments

When trade volume is low it’s not uncommon to see unusual swings in price, as with fewer market participants making trades – moves are often highly exaggerated.

Forex Market Volume has been trailing off fairly steady since June, with yesterday and the day previous scraping the bottom – as the “lowest of the low”. Where’s the volume? Isn’t everyone back to work , sitting in their cozy little cubicles staring into the abyss of their computer monitors, toiling over every little “tick”?

As I understand it, U.S equities trade volume has now hit a 15 year low!

Perhaps the number of “risk events” still out in front us, has a large majority of traders “sitting on the fence” waiting for clarification, or perhaps tomorrow being Sept 11th, or perhaps it’s that tapering thing, or the debt ceiling or Syria. With so many factors it’s obviously a difficult thing to put your finger on one way or another.

Bottom line – It’s a ghost town out there with the bulk of trade volume made up of HFT ( high frequency trading ) computers just buying and selling to each other.

One needs to be cautious, and not let these “low volume pump jobs” throw you off your game. I would have assumed we’d be back up n running here as it’s already the 10th but as it stands. Chop, chop, churn, churn on “yet another” low volume day.

I’ve got 1680 on /ES SP 500 as a reasonable “top” for this last correction upward, and will be watching this in conjunction with the usual intramarket dynamics as things start picking up again.

Insanity Trade – Don't Try This At Home

Forex Kong 14 Comments

As of late – I feel I’ve gotten a little soft.

Pulling back over the summer months ( knowing ahead of time it was gonna be rocky ) has me a tad complacent, and dare I say a touch out of character. Should impending war, global Central Bank intervention , looming collisions with massive asteroids , or nuclear disaster stand in the way of a seasoned forex trader? No chance.

It’s time to light this candle.

September is upon us and blog traffic has literally tripled in a matter of days. I’ve been over the “reader’s poll” ( and want to thank all of you who’ve contributed!) and understand that a large number of you really want to get down to some of the “real-time trades” and straight up entry/exit stufff – no bones about it.

I need to have a little fun once in a while too, as doing this for a living can really get to you at times. Daily walks on a Caribbean beach, cold beer, swimming with turtles/whale sharks, diving , salsa bars, bone fishing etc……these things can really wear on a guy!

I am placing an order “long EUR/AUD” at 1.43 – as well “short CAD/CHF at 90.00 and fully expect that if anyone else tries this……….you will be taken directly to the cleaners.

I implore you “not to try this”. And don’t even ask me  “how / why”.

Summers over. I’m done tapping the brakes.

Let’s get this show on the road.

Forex Trade For Monday – Kong Gone

Forex Kong 5 Comments

The move in USD on Friday was certainly the kind of thing I like to see. We’ve now consolidated / moved sideways for 3 or 4 days now, and “should” see a resolution of this kind of action – early in the week.

Seeing that equities have continued to “churn” near all time highs, and on the cusp of some pretty big news / data coming over the next few days ( and weeks with “potential WW3 as well the “U.S debt ceiling breached” ) a solid move cannot be far away.

I’m off to the beautiful “Isla Mujeres” this morning and likely won’t be back until late Monday night. I feel that positioned “short USD” as well “long JPY” in general is the right place to be for the moment – and don’t plan to be looking at this trade until Tuesday.

Elections in Australia over the weekend will also provide some movement in AUD Monday, and I’m assuming that movement will be “up”.

If you can believe how old the article is (Feb 10, 2013), and make note of the level cited in EUR/USD you may even get a laugh.

https://forexkong.com/2013/02/10/long-eurusd-at-1-3170-watch-me/

It’s amazing that these levels are hit over n over again.

I will look to take this trade come Tues.

Sun ‘n sand for a day er two on this end……enjoy everyone!

 

 

written by F Kong

 

Why Watch The Dow Jones? – I Don't

Forex Kong 9 Comments

Think about it.

We’ve got issues facing the entire planet. War in Syria, the Fukushima spill in Japan, elections in Europe, and the never-ending “gong show” of blunders playing out in the U.S.

We’ve also got stock markets ( completely contained and unto themselves ) in emerging markets such as Brasil, Colombia, Indonesia,Europe, Canada and the list goes on.

The Dow Jones Industrial Average is composed of a rinky dink “30 companies in the U.S”! – 30 companies listed in the most rigged / manipulated index on the planet!!  30 companies!  Seriously – Who gives a shit?!

Can you imagine anyone outside the U.S ( or more so anyone with any important global influence / significant contribution to their own local economy / position of strength ) during times of global “risk aversion” giving a rat’s ass about the plight of 30 piddly companies in a single (and completely rigged ) stock exchange in a single country so far in debt it goes broke ( and just raises it’s credit card limit ) every 6 months!?

Common!

Open you eyes. Pull up some new charts. Get your head out of the sand. Seriously.

It’s a “not knowing the forest from the trees” type thing.

An index composed of 30 American companies , and those companies likely being “the most influenced” by Fed intervention, and promoted in the media via 6 major companies OWNED BY THE SAME INVESTOR GROUP AS THE FED – is an index I can do without.

Ditch it.  Pronto.

Story by F Kong at Google +

Reloading Forex Positions – How To

Forex Kong 9 Comments

Ok….so you’ve missed the initial move.

You’ve sat idle, and now  worse –  tuned in to your local financial news to see “what all the fuss is about”.  I can only assume they are telling you to “buy, buy , buy!” and that everything is hunky dory, blah,blah, blah. Please……we know much better than that.

Pull up your charts on pretty much “anything and everything” and zoom in on what’s happened here today. For the most part, nearly every point / buck has been retraced across the board equities wise ( rinsing the entire lot ) while the forex crowd bask in the sunshine of never-ending dollar debasement.

If you want to “get in on the action” you’ll need to be a fairly savvy trader – or at least be willing to take on a bit of risk, on order to take advantage of the continued moves ahead.

Drop down to at least a 1 Hour chart on a pair like USD/CAD for example, and ask yourself – is now the best time to enter? After such a precipitous drop?

Patience young grasshopper.

You now need to apply a bit your “short-term technical know how” in seeing that a larger trend “IS” now clearly established, but that “now” may not be the most opportune time to enter.

Fib retracement levels come to mind – looking at the last move on 1H and considering “how far might this thing retrace” before continuing on its path downward.

A moving average may also provide “some indication” of level where price may normally retrace.

Any way you cut it…..chasing a move almost always results in pain and agony, as “just when you think you’ve got this figured out” – the damn thing shoots off in the opposite direction.

Patience young grasshopper. This “can” be learned. This “will” be learned.

F Kong

( this “F Kong” thing is being included as to see if I can get the boys at Google to recognize me as a credible author).

My Google profile page can be viewed here at: F Kong at Google+

Short And Sweet – Forex Profits Galore

Forex Kong 31 Comments

I’m looking for a little feedback here today.

I’m hoping to see / hear from some of you / possibly frustrated Forex traders, who’ve been following closely this week.

I hope you’ve taken some time to follow along, and seriously consider some of the concepts/ideas thrown around here at the blog. Last nights “tweet” as to the weakness in Japan, as well all of yesterday’s conversation “should” have made for some pretty happy traders here this morning.

In particular a valued reader suggesting the information here was “useless banter” “should” be up 150 pips over night on a single trade suggestion alone.

This stuff doesn’t turn on a dime, as we’ve worked this trade since Tuesday – but the profits as of this morning “should” make a few days effort well worth it.

I plan to sit tight and let this trade develop further, as we are “now” hearing suggestion that “the Fed may not taper”.

Didn’t I say that like a couple of months ago?

F Kong – On Putin and Obama

Forex Kong 15 Comments

As I understand it – Putin and Obama have made an “appearance for the camera’s” but that no “official meeting” between the two will take place.

I’d suggested some days ago that Russia will not stand by and allow this “attack on Syria” to take place, and was generally met with the opinions from most of you  – “”well Kong – the U.S is gonna do it regardless”.

Currency trading provides some pretty deep insight into “WTF” is going on in our world today, and I can tell you from my experience ( as well the countless hours reading / researching every element of our world ) that  “this time” is different.

There has been a lot of activity overseas in the past few years, particularly between Russia and China, as well a number of Middle Eastern countries “getting their sh#$t together” – if you will.

I see the “divide between east and west” stronger now – then every before in my lifetime.

Technology has played a tremendous roll. Growth in China, and the continued downturn in the west has the now “unified East” stronger, smarter, and more confident than ever.

Russia will not have this, and in my view ( with greater confidence in its relationship with China ) may just as well see this “event” as the “single event” to re assert itself as the “big boy across the oceans” – and take this one to the limit.

These are crazy times we live in – thusly……….. crazy things “will” happen.

story by F Kong