Stocks And Currencies – Major Shake In 2017

It clearly looks like this will stretch into the new year…….before we see a major turn in both currency and equities markets. Money is pouring into silver and gold with the gold miners ( and gold complex in general ) finally showing us not only the daily cycle low….but quite possibly the “yearly” cycle low as well.

 

Gold_Miners_Bottomed

Gold_Miners_Bottomed

This makes for some pretty solid trades as……The EUR will bottom along side gold and silver, the U.S Dollar slowly rolls over for extended losses and equities make a solid correction.

Sound about right? This is EXACTLY how I am positioned with short trades in USD/JPY, long silver and gold miners ( GPL bought at 1.27 ) as well limping into further “long JPY” ideas / shorting the commods ( AUD,NZD and CAD ) with marijuana companies holding tough.

End of the year selling, and who knows what other “market shenanigans” playing out these last days of 2016. I see a large-scale correction first half of January 2017.

Beer Money In 2014 – Happy New Year!

With the fundamentals “out the window” now going on some 6-9 months ( if not the entire year of 2014 ) traders and analysts alike have simply stuck with the familiar adage “you can’t fight The Fed ” and just buy the dip.

No question that “if” you’ve been able to endure the massive swings (Sept – Oct for example – essentially wiping the entire “yearly Dow gains” in a matter of 12 days ) or even the smaller one just recently ( drilling The Dow 1000 points in a matter of 6 days ) you should be very, very , very proud of yourself.

Oddly….you never really hear much from “perma bulls” during these times, and one really has to wonder…if it was just that easy to “buy and hold” – then shouldn’t virtually “everyone” be stinking filthy rich right around now??

Funny……you don’t really hear much of that kinda talk either, and by way of U.S unemployment figures ( another miss at 298,000 last week ) you have to appreciate the “mixed message” most people are getting. Is this thing going up? Or is this thing going down?

It’s really the “art of survival” these days. Bull or bear….if you’ve got some extra money in your pocket at the end of the year hey…..job well done.

2015 will undoubtedly bring with it an “even more challenging trade environment” as global geo-political tensions are clearly on the rise, Central Banks are “still” struggling to put floors underneath spiraling economies, and global growth forecasts have been cut, then cut…….then cut again.

I wish all of you the very best in the new year, and as always – encourage you to stay vigilant. The rug gets pulled very quickly, and if I’ve learned anything over these past few years….I’d rather be the guy standing over in the corner………. with a cold beer in hand when it does.

Happy New Year all!

 

Falling Oil Prices = Slowing Global Demand

With readership here at Kong now doubling “again” over the past few months – I struggle to understand what “new information” people are looking for.

You do understand that the recent fall in oil prices ( well …actually not so recent considering it’s been falling like a rock since June – down from 110 to now 58 bucks a barrel ) is a blatant and obvious indication that “global growth” and “global demand for oil” is falling off a cliff right?

Seriously…….if you don’t see the connection between “supply and demand” in something this blatant and simple well…….one has to wonder “what you do see” – if anything relevant at all.

Finally something “other than The Fed / mainstream media bullshit” to get you off the couch and start asking yourself?

Could it actually be? You mean all this Kong talk of “global slowdown” over the past months ( despite the ridiculous rise in equity pricing ) is actually for real?

Give your head a shake. The world outside your tiny bubble of plastic wrap and pizza boxes is selling off like hotcakes and you still think Apple looks like a buy here at 110.

Oil related currencies such as The Canadian Dollar as well The Mexican Peso are getting creamed even as The U.S Dollar is falling hard, and The Japanese Yen enters “lift off stage”.

Debate over the next couple weeks and “what ever miniscule points are left” in the general propping up of both Japanese and American markets is a dead mule.

Step back and imagine oil at 30 bucks…perhaps that will get your attention.

 

Oil Prices Plummet – What Does It Mean?

The big news over the past 48 hours has obviously been OPEC’s surprise decision “not” to cut oil production.

In a world of increasingly “lower demand” for oil ( further confirmation of a truly “global slowdown” ) The Saudi’s have opted to sustain production of 30 million barrels per day, keeping market share and putting a real squeeze on The American shale / fracking business, that generally needs to see oil at 75-80 barrel just to remain profitable.

The net effect is generally perceived as “net negative” for oil exporting countries, and could also be a potential catalyst for weakness in U.S equities, with indices carrying “significant weighting” of oil / energy related companies.

The Saudi’s can produce oil much , much cheaper than other nations so in keeping production output high ( and in turn driving prices lower ) there may be more to this than first meets the eye.

A strategic move to drive other oil exporters ( in particular The U.S with it’s high costs of production ) out of the market? 65 dollar bbl oil puts the majority of U.S oil exporters on the back foot and potentially “out of business” should these price levels remain, not to mention driving home the point that “indeed” global demand for oil is certainly on the decline.

I believe it was a 35-40% decrease in the price of oil that also proceeded equities downturns in both 2008 as well 2011.

We are almost exactly at the same point with oil prices as of this morning, so it remains to be seen “what reaction” we may see here in the West as markets digest the information.

First the currency war and now perhaps a “commodity war”? Needless to say….never a dull moment here these days – with “yet another shocker” rippling through markets here this week.

Let’s see what The Central Banks do next right? As this has absolutely nothing to do with you or I.

The Countdown Begins – Greed Finds Its End

Well this is it people – the countdown begins.

You can count yourself as lucky – no…..”very lucky” as to have some idea where / when the merry-go-round stops spinning – this being the “final turn” before the party ends.

We’re down to a matter of weeks now – if not days.

I don’t generally speculate on such short-term movements, but with respect to “this one” having such significance to the longer term / larger trend – I feel it’s reasonable to put something out there.

Let’s give it a full two weeks, 14 days ( give or take a day here and there )  before anyone “greedy enough” to still find themselves “hanging around” – finds themselves wishing they’d taken note.

This will mark the “final surge” in global appetite for risk, and the final push towards the highs, before the historical repetition of the typical “boom and bust cycle” takes effect once again.

The Fed meeting at Jackson Hole ( scheduled for Aug 21st ) will undoubtedly be the trigger, as Yellen suggests “for the very first time” that indeed it’s time for “risk takers” to exercise caution, or to be blunt – get the hell outta the way as fast as they possibly can.

In a matter of weeks “nay-sayers” will be left holding the bag, giving each and every one of you ample time to act accordingly – if you do so choose.

Currency markets have already made the transition ( with commodity related currencies smashed as of late ) as they will always lead, with safe havens catching the bid – suggesting the turn is already well underway.

You don’t want to be the last one out the door, and their will be ample trading opportunities on the “other side of the mountain” if you can just manage to discipline yourself to “get out of this while you can” and not get caught holding.

The countdown has begun.

Best of luck to all of you.

 

 

Curreny Wars Turn To Trade Wars – People Next

From a purely geopolitical point of view things just keep getting hotter.

An expected “bounce in risk” ( considering the oversold conditions ) not as forth coming here as Putin pushes back with sanctions of his own BANNING EUROPEAN FOOD IMPORTS ( something which will further push Europe into a triple-dip recession ).

“Take that” then Obama / EU cronies.

Apparently the big boys in Washington and The EU are both completely shocked and outraged ( yet imposing sanction of their own is always Ok – right? )

Putin will not be bullied, now with the “supposed recovery” in The EU ( ya right ) hanging in the balance. Like it has anything to do “what so ever” with Putin or Russia.

This is now coming to a head as the West continues to do anything possible to provoke the “calm cool and collected” Putin.

The U.S must make war in order to retain “reserve currency status” and continue with the Ponzi at whatever cost.

Putin’s latest action keeps the game in check, and provides hope for those of us ( most of the planets population ) who look forward to a day when The U.S looks to concentrate on its own “completely f#&ked up situation”, starts taking care of its “own people” and keeps its big fat “overly indebted nose” out of other people business.

You’d think the people of The Ukraine were “made of gold” considering the amount of interest from Washington! No wait…….gas/oil – that’s it.

Currency wars turn to trade wars…….

Trade wars turn to “people wars”.

Hey – what’s up fellow traders? I know the flow of “daily trading info” has dwindled to a certain degree here at the public blog as it’s now “hopping” in The Members Area!

Things are really looking to pick up here in coming days / weeks with “The Fed news” late August as well current weakness in global equities assuring fireworks to follow!

Come check it out at www.forexkong.net

 

 

 

Watching Commodity Currencies – What Can Be Learned

It’s pretty common knowledge that the currencies of countries with “commodity related economies” such as Australia, New Zealand and Canada are seen as the “darlings of the currency markets” during times when investors feel safe.

Simply put, large institutional investors are able to borrow money such as U.S Dollars or Japanese Yen at extremely low rates of interest, then use these funds to invest in currencies / countries where higher yields and greater opportunities can be found. Australia with its mining / gold related businesses, as well Canada with its oil as a couple of good examples.

The trouble is, as attractive as some of these investment’s may appear during times of economic expansion and loose monetary policy ( with both The Fed and The Bank of Japan flooding the planet with cheap money ) the currencies of these commodity related economies are not widely held, lack liquidity and are not generally sought during times of contraction and tightening.

To a certain extent you can almost consider them the Twitters and Facebooks of the currency markets. Relatively large, fast moves higher when times are good and investors feel safe – but equally the opposite movement when things start to go south.

Think of it like this. If suddenly the world fell into chaos and you were trapped on holidays in The Caymens, unable to return home to your family and friends. What currencies would you look to have there in your pocket / bank account? A handful of Aussie Dollars likely won’t do the trick.

So what can be learned by following these currencies? Can they give you any indication of future movements in global appetite for risk?

Lets have a look.

Australian_Dollar_During_Risk_Aversion

Australian_Dollar_During_Risk_Aversion

As an extreme example we can see prior to the crash of 2008 that the Australian Dollar had enjoyed a fantastic run while times where good – only to then wipe out six years of gains in a matter of months. Commodity related currencies across the board got completely hammered as fearful investors did all they could to get back to the “relative safety” of the currencies originally borrowed – those being the U.S Dollar and Japanese Yen.

Since Central Banks have been printing money like mad since 2009 investors have enjoyed nearly 6 years of bliss, borrowing said funds at extremely low rates of interest and investing where yields can be found.

I’m not suggesting you’ll see another 2008 scenario play out tomorrow, but by keeping an eye on the commodity currencies you may certainly get a bit of lead time – should things turn.

Japan Is Broken – Soon You Will Be Too

We’ve been waiting for this for a considerable amount of time, and our patience will now be rewarded.

The Japanese Stock Market Index “The Nikkei” has now breached our “waterfall zone” dropping an additional -200 points here overnight in a surprising ( only in that it’s happened on Sunday ) move lower, this early in the week.

The flow of news headlines won’t make a single difference in the world ( depending on what they look to as the cause ) in that, this has been slowly developing over such an extended period…it was only a matter of time before she cracked.

It takes the big players “weeks and months” to move such large amounts of money “in or out”  of position, and the past few weeks have had “distribution” written all over them. Distribution is a market dynamic where over time, large players continue to “quietly sell” to retail as they prepare to “hit the exits” with profits in hand. You certainly don’t want to be the last one holding the bag looking to “buy the dip” once the big boys make the move.

You doubt me? Consider the entire past 5 months as purely “distribution” and now watch how quickly these “gains” are wiped from your portfolio. Weeks and even months of trading “evaporate” in a matter of days.

You can lead a horse to water but you can’t make him drink well…..again I am absolutely stunned that so-called “traders” continue to push the “green button” in the face of something so incredibly obvious.

I guess you need to lose 30-40% of your gains to finally get it.

Best of luck with everything “bullish” here this week and in the months to come. Gorillas are already nearly 100% in position and already in profit pretty much across the board – still just waiting on the final nail ( USD ) to make up its freakin mind so we can jump on that train too.

Long JPY is the way to go, with the commods continued weakness right on cue. SPY and QQQ shorts from “days” ago still performing well and a miriad of trades lining up in USD. More at the members site: www.forexkong.net

 

The Canadian Dollar – Trouble Ahead

I hate to say it, but the Canadian Dollar is heading for some “rough times” in coming months.

Considered a “risk related currency” along side both the Australian Dollar and the New Zealand Dollar ( as these countries economies are primarily based on the export of raw materials / natural resources ) a slowing China, slowing global growth, and a “floundering United States” won’t do much to help Canada and its “loonie” stay aloft.

Awful employment data last week certainly didn’t help either, but that’s not nearly as large a driving factor as slowing global growth. These countries depend on “selling what they’ve got” to keep people working and to keep the economy strong, so by simple way of “supply and demand” these economies suffer when global growth slows.

Canadian_Dollar_Forex_Kong_May_14

Canadian_Dollar_Forex_Kong_May_14

And it is slowing. Not matter what you read or see on your television.

None of this turns on a dime obviously, so for the most part you’ll only really “hear of it” long after it’s well under way ( as it’s happening at this very moment ) but the reforms in China will continue to creep into the “inner workings” of our global economy, while the U.S as well Europe continue to struggle – just to keep their heads above water.

Short “Canada” starting to make sense, as I’m already long USD/CAD as well short CAD/JPY.

Check out the Members Area and get real-time trades, daily commentary on gold, stocks, forex and more…

 

Gold and USD – Passing In The Night

With the expected move out of USD coming together over night, we’ve seen more than enough follow through here to confirm what was suggested yesterday.

Stocks won’t hang on here, and I expect the power of the U.S Dollar “repatriation trade” to flatten gold here as well.

For those of you “investor types” I imagine you’ve come this far so a couple more months ( and perhaps further drawdown ) as gold slides into “its final leg lower” likely won’t kill you.

However for those looking at gold,silver and the related mining stocks as a trade….unfortunately – I see lower prices – before higher.

This is no “small blip” as far as USD is concerned, likely marking a significant turn “not only in the currency” but “in all” that it affects.

So far only the European currencies have taken the initial hit, but it won’t be too long now til we see the Canadian Dollar, as well Australian and New Zealand follow suit, and I’m not talking about a trade here……I’m talking about a major shift over the medium and even long-term investment horizons.

Top call still very much so “intact” here as of today – with the “Members of Kong” doing very nicely in our first month working together. Feel free to poke around the members site, and hey….you can even join us if you’d like. I’d take an additional 20 if you want to contact me over the weekend at : info@forexkong.com

Have a great weekend everyone! It’s sun sun sunshine here!