commodity currencies

Trading The NY Session – Or Not

Forex Kong 11 Comments

I’ve booked ( and I do mean booked….ie sold positions and placed the money on the “plus” side of the account ) an additional 4% here this a.m  – as per the trades outlined just yesterday.

If there is one thing I really can’t stand – it’s watching these “real profits” disappear during the NY session as the usual “POMO ( permanent open market operations ) pump job” continues to mask the true fundamentals….lurking underneath.

More often than not, an entire “weeks” worth of planning/strategy and profits  can be completely “wiped clean” during the NY session as “counter trend rallies in reality” ( as I like to call them ) play out daily.

You’ll note that Asia and the commodity currencies got absolutely hammered last night with the Japanese Nikkei down a whopping 445 points, yet today “during the con job” I don’t imagine you’ll hear a thing about it.

Do think it just might be possible that our dear friends in Asia woke up to see the NFP / employment numbers out of the U.S and said: “Holy shit – that’s crazy!! What the hell is going on over there? Are these guys seriously talking about “recovery”? Bleeep! – sell.

Left to their “own devices” U.S markets should be crumbling like a moldy ol tortilla – left to sit out on the counter too long.

I’ll tuck my pennies in my pocket and continue on “after” the gong show rolls through.

Kong…….

Gone.

 

Kong Enters Market – Trade Positions And Levels

Forex Kong 21 Comments

I’m In! These for starters….and far more to come.

Short:

AUD/USD at 97.00

NZD/USD ( adding to existing postion ) 85.13

EUR/USD ( small position ) 1.3780

GBP/USD enter at 162.58

Long:

EUR/NZD at 161.85

GBP/NZD at 190.50

USD/CAD at 1.02 85

I’m trying to get some of this out in as real time as possible so….please forgive the “lack of meat on the bone” here from a fundamental stand point.

We’ve been into all that already….and obviously there’s plenty more to come.

Trading Against The Grain – AUD And Risk

Forex Kong Got something to say?

With every single headline, and every single website singing high praise to the “economic recovery” in the U.S , with disasters averted left and right, and an equities market seemingly “constructed out of pure titanium” – it’s difficult entertaining ideas that “anything” could go wrong.

One always has to keep in mind that when “too many people” are leaning hard in one direction, markets have a tendency to “correct that” – often with incredible efficiency.

Even if you’re of the mindset that “nothing is going to stop this train” you’ve still got to consider the normal market dynamic known as “profit taking” – where traders / investors simply decide to “take a little bit off the table”.

The recent moves upward in both U.S equities as well the Australian Dollar are highly correlated here, as the two both represent “risk on” market sentiment. It’s difficult to comment on the “never-ending rise” of U.S equities in light of recent events, however what I can tell you is that the Australian Dollar (AUD) is as “overbought” as it’s been for months , “if not” over the last entire year – on continued decline in volume.

If for no other reason than purely “technical trading” ( let alone with combined fundamentals ) short AUD is setting up for an extremely low risk / high profit opportunity here.

An opportunity I intend to take considerable advantage of.

Trade ideas include: long GBP/AUD as well EUR/AUD, as well short AUD/USD, AUD/CHF and AUD/JPY just to name a few.

Stock traders can have a look at the ETF: FXA

I’ll plan to “tweet” entries / ideas in real-time moving through the week. Should the correlation stand, I’d also be looking for downside action in equities.

My Trade Ideas – October 11- 14, 2013

Forex Kong 7 Comments

Forex Trade Ideas – October 11 – 14, 2013

The US Dollar has now made a “swing high” here,  at a very important and critical junction.

As usual ( these days ) the implications are considerable, depending on which camp you’re in.

Off the top of my head, further ( and continued ) downside here would see USD trading “lower” in tandem with “risk” (also trading lower) – which in itself is troubling, as we would “usually” consider “risk off” activity to be good for USD.

In a situation where both USD as well U.S Equities where to fall in tandem ( as we have seen on several occasions over the past year  ) it is also very plausible that we see both NZD as well AUD fall “even more”.

There would be absolutely no question that JPY ( The Japanese Yen ) would rise.

Trade ideas “would include” some pretty bizarre set ups – in that I would consider things like:

  • short: NZD/USD as well AUD/USD ( where USD falls…..but gulp – commods fall even more).
  • long: GBP/USD as well EUR/USD ( where USD falls, and these two take in flows straight up).
  • short: USD/CHF ( where USD falls and the Swisse France takes safety trade ).
  • long: JPY vs nearly anything under the sun, but especially AUD and NZD.

It’s far to early to tell, and the outline above is highly speculative but…..should further evidence of this unfolding be seen – I WILL IMPLEMENT TRADES IN NO LESS THAN 12 PAIRS IN A HEARTBEAT.

You’ve got to “at least” have a trade idea / plan in mind, then allow it to either play out or fail, as opposed to just turning on your television. Getting this one right could generate some serious, serious profits but again……………you’ve got to have an idea, a plan – before heading out on the field.

 

 

Get The Trades Via Twitter – And Comments

Forex Kong 10 Comments

A really nice spike in the U.S dollar today ( considering I’ve been long for days now ) with several trades paying off well. As well (specifically) foreseen weakness in GBP coming to fruition here overnight. I invite anyone who isn’t already following on twitter or “the comments section” here at the blog to join/follow as there are lots of great info from other traders here as well.

It’s been interesting to see this move higher in USD in line with “risk on” activity in markets today but then again not so unusual. We’ve seen equities and USD running in tandem several times over the past few months as hot money from Japan is converted in / and out of US in order to buy and sell stocks.

THERE HAS STILL BEEN NO REAL MOVE TOWARDS SAFETY.

Glad it’s the weekend here as I’ll be diving / snorkeling. Have a great weekend everyone!

USD Face Ripper – Caution Ahead

Forex Kong 11 Comments

I’m not sure how “or why” I came up with it. Perhaps something in a dream or maybe something I read – I can’t remember.

Face Ripper ( as per Kong ) : A ridiculous move in the price of a given asset, when the complete and total “opposite” move is expected.

I know it sounds gross. And….essentially “it is” gross but…….. at least it gets the point across.

One day you’re making a trade, and feeling good, confident , “safe”. Next day – Boom….No face.

Wether or not it happens in a day or a week…or a month for that matter – this thing is setting up for an epic move. The overall complacency in markets is downright irresponsible, and reflects an investment environment that is so far “up in the in clouds” that a “trip back to Earth” is most certainly in the cards.

USD WILL RIP YOUR FACE OFF.

As most traders don’t truly understand the larger “macro” reasons as to why the U.S Dollar “rises” when things look to be at their worst….this is most certainly the case. Every penny that has been invested in assets / converted to other currencies in emerging markets ( as to make larger returns / gains ) comes flooding back into USD on the “slightest indication” that the party is over.

USD WILL RIP YOUR FACE OFF.

Enough said. This “gov shut down circus” is only the first act….as we’ve got several more to go.

CAUTION AHEAD.

Currency Trading – Everything Is Relative

Forex Kong 2 Comments

When trading Forex one has to keep in mind – everything is relative.

Weakness in a particular currency is only “seen” when that currency is compared / traded against another “specific currency” where the “relative” difference / change in value can be compared.

Hence the reason why forex is always traded in “pairs”.

Often we see the pair EUR/USD ( the Euro compared to the US Dollar ) and generally assume “dollar weakness or strength” based on this pair – and this pair alone, yet the dollar’s performance vs AUD ( The Australian Dollar) for example “could” be an entirely different story depending on specifics affecting AUD.

To “generalize” or to “assume” a given currencies direction without viewing it “specifically” against each and every individual currency would be naive , lazy – and likely quite costly.

The US Dollar has taken a considerable down turn “again” this morning – or has it?

Against the EUR sure ( as these two will always “see – saw” being the two most widely held reserve currencies on the planet ) but in all……….USD has barely budged against a pile of others.

The one thing that has moved here this morning is volatility. Volatility is up , up , up and away.

Spend the time ( it might actually take 5 minutes a day ) to get familiar with currencies, oil , stocks , gold etc  in a “relative manner” and before long – you’ll be seeing things much more clearly.

Risk Off In AUD – JPY Moved Higher

Forex Kong 4 Comments

As markets continue to “flirt” with a real move / turn – I’ve taken a couple additional trades over night.

Short AUD/JPY as well long GBP/AUD. Both well into profits with prior trades ( see previous post ) all moving even further into profit. ( The Insanity Trades are well…..insane.)

The Australian Dollar (AUD) is showing considerable weakness across the board, as our old friend the Japanese Yen (JPY) continues to move higher.

I’m pleased to report that fewer signals were offered last night, and that the latest tweaks to the Kongdicator has kept me out of sideways action in USD related pairs, while hitting home runs in others. This is the plan.

I won’t bore those who are here reading on macro market analysis / fundamentals much longer with this “technical stuff” a day longer – and appreciate those who have followed along so far.

Markets are “teetering” here – and it’s nuts out there. Trade safe, and we’ll get back to some “overview” during the weekend.

Anyone who isn’t already following on Twitter – I tend to post “real-time stuff” there, as opposed to putting out an additional blog post so….

 

Forex Trading – Tuesday Morning Update

Forex Kong 4 Comments

I’ve “scooped” 3% overnight in a number of “long USD” trades, the largest of which being NZD/USD ( you were alerted to on Sunday night, then again via twitter last night ) as well long USD/CAD and short GBP/USD.

These pairs are still very much in play , only that these days when I see money on the table – I just flat-out take it. The short-term tech will kick in here soon, as we again can likely look to Thursday as the market pivot.

The Yen (JPY) has shown considerable strength in the past 24 hours, as every JPY related pair has seen reasonable moves ( a couple 100 pips even ) over the past few days. I still hold a couple trades ( still in the weeds ) long JPY.

The Insanity Trade is still holding as well, and in case any of you looked into following this pair (EUR/AUD) over the past week now – I hope you’ve seen “the light”. Dipping as much as 150 pips in a matter of hours, then back again etc….still hanging in profit but a wild ride if you’ve leveraged / are trading too large. Insanity Trade 2 has still yet to get picked up.

Otherwise…..another hum drum Tuesday on deck here today, as SP/ U.S Equities have certainly “come off” but nothing to write home about.

Gold continues to grind anyone silly enough to think they can actually “target an entry price” on an asset worth 1300.00. 30 dollar moves are nothing, and pointless to debate.

Good luck out there.

 

Trade Ideas For NZD/USD – Overbought

Forex Kong 2 Comments

I’ve got my eye on the “Kiwi” regardless of which pair, for the pure reason that it looks severely overbought.

Overbought –  A situation in which the demand for a certain asset unjustifiably pushes the price of an underlying asset to levels that do not support the fundamentals.

Now, The Bank of New Zealand has recently made mention of a possible “hike” in interest rates (which has most certainly been the tail wind behind the latest advance) but the Kiwi still represents a “risk related currency” and is subject to large moves when appetite for risk wanes.

Have a look at the daily chart and see how “84.00” looks like a solid area of resistance.

NZD_USD_SEPT_2013_Forex_Kong

NZD_USD_SEPT_2013_Forex_Kong

Now, “86.00” doesn’t look completely out of the question, but with the usual “staggered mutli-order” approach, I’m seeing the risk vs reward looking pretty good for a short up here.

Another full day’s downward movement will likely trip the Kongdicator ( as I am free wheeling here on this one so far ) so we’ll keep our eyes peeled for that.

Kong….gone.