The U.S Dollar likely has a few more days of downside before petering out and completing this last leg lower, so you can feel free to hang on – at least another couple of days short.
It’s quite possible that this last leg down may mark “the end” of an intermediate down trend, where in the bounce ( and possible trend change ) could be quite dramatic.
Myself…..I’m going to close my few open positions over the next day er so…..then consider “mission accomplished” short / medium term shorting USD.
If indeed we see an intermediate cycle complete – a full stop and reversal in USD related trades could soon provide another “easy trade” in catching it so early. Obviously pairs such as EUR/USD as well GBP/USD will provide fantastic vehicles here, as well as long USD/CAD and USD/JPY ( but I’d be sure to really wait on these ).
So you see? This is traaaaaaading. Trading yes. Not beating down on The U.S Dollar like I give a rat’s ass about one particular currency or another. This is making money in a market “regardless of direction”. This is charting, this is macro economic analysis, this is timing – this is art, not some bullshit rhetoric aimed at keeping you invested and ultimately cleaned out.
You can do it…….you’ve just got to turn your biases off. You’ve got to learn to think for yourself, and filter through the noise.
Q: What did the midget say when I asked him for a dollar?
A: “Sorry bud……………………………………….I’m a little short”.
Feel free to pull the trigger anywhere in here today, as most currency pairs have done what was expected – providing for fantastic entries here “short USD” and short “risk in general”.
You’ll see a number of the other usual correlations play out ( as this is so straight forward and obvious ) with commodities moving higher as “the currency that they are priced in” slides lower, then lower…….and lower some more. And yes folks…..even gold and silver!
Again I marvel at the “hoards of financial bloglodytes” peddling this kind of information for money.
This is about as common knowledge as it gets.
Literally……”Introduction to economics 101″.
If the sideways trading hasn’t been enough to drive you insane “yet” well……..you’re one the few. I’ve had nothing to trade, and in turn nothing to “say” until today.
It looks as though we are back on track for another short entry in risk, as both The SP 500 as well $USD are signalling – downside ahead. You don’t see it? How about 2095 as a good place to start?
I’m looking for today’s high in “both” as a level to look at “getting short” – again.
Keep in mind….the levels are the levels…but the turns often take time. Get a couple orders in “underneath the action” – and you’ll do just fine.
This works short SPY, short USD/JPY , as well most everything vs JPY ( yes again and again! ) with smaller orders long GBP/USD.
Picking currency pairs is getting trickier these days….so you’ve got to stick to some of the larger concepts ie…..Risk off = JPY UP.
Watch for this to fade here this afternoon..
If you’ve heard me say it once – I’ve said it a million times. A strong U.S Dollar will not be tolerated, as it represents a “red-hot poker to the eye” of both the corporate American “and” The U.S Fed.
You can fire up with all the fancy economic bullshit you can rustle from the countless “pro risk/pro USD/pro economic recovery loser blogs” out there ( and I hope you do ) and it won’t make a stitch of difference.
This thing will be cut off at the knees as U.S earnings plummet to the depth of an ocean.
Lets just call it the “Sea of Recession”.
You’ve heard of it but have no f*^*king clue where it is…..perhaps try looking in your backyard.
Short USD trades are once again “up and running” as we prepare to snap up all those long trades – soon going overboard.
I’d take a look at U.S Equities as well and consider that when BOTH the U.S Dollar AND Stocks start dropping like a rock….the big boys will have already taken the life rafts to shore.
I’ll already be on my private island – scanning my beaches for washed up traders and radio shack suits.
Do you think New Yorker’s can even swim?
I doubt it.
Finally! Something of significance!
If you take a look at two pairs such as GBP/JPY as well GBP/USD as a “control” – you’ll see that over the past few days of general GBP strength “both pairs” have been moving higher essentially ruling out any real movement in either JPY or USD.
Zooming in closer and taking a look at each of these pairs on much smaller time frames ( take the 15 minute for example ) you’ll blatantly see the “post Fed minutes” move has GBP/USD pushing higher and GBP/JPY falling off a small cliff.
THIS IS WHAT WE WANT TO SEE! ( Yoda may not ).
Suggestion that both USD as well JPY are finally moving “regardless of the currency they are pitted against”.
Obviously the same thing can be seen just taking a look at USD/JPY as a pair unto itself but….in this case ( looking wider at many pairs ) we see clear suggestion that USD and JPY are moving ( in opposite directions) to a much larger degree.
The Nikkei has also taken quite a “fast dip” here post Fed minutes so it’s pretty fair to say that markets aren’t particularly pleased with “something”.
Any bets on where The SP 500 and The Canadian TSX are likely headed next?
The weather here this time of year is absolutely beautiful, with the sun shining and the cool breeze blowing in off the Caribbean sea.
A retired German couple has moved in across the way, with the Mrs. out tending to her flower pots by day, and the gentleman blessing us with the sweet sounds of his accordion / squeeze box music by night. Happy days indeed for those not concerned with the daily comings and goings of the U.S stock market.
A bounce here to around the 2040 Level in SP 500 should give the few remaining bulls ( or at least those that still have a couple bucks left ) a chance to hit the exits before the next leg lower wipes out the lows at 1970 – then heads substantially lower.
Finally marking the near term highs in USD, Gold will hold up ( perhaps a few dollars lower ) before making its next leg higher as safety is “oh so quietly” sought.
The Japanese Yen has long since made its medium term low, and has been consistently gaining strength for weeks now, as commodity currencies continue to get absolutely smashed. AUD/JPY ( remember my most profitable trade idea moving into 2015 ?) as well NZD/JPY and CAD/JPY now down over 1000 pips from their highs.
The sideways action in equities is almost complete, and it should only be a couple more days until we see reversal “again” – this time being the last before the established “downtrend in risk” continues thru February / March.
I’m not trading much these days and as boring as it may appear, sticking with the same medium term plan of “short USD” and “long JPY” ( via everything “other than USD/JPY in itself ) continues to make the most sense.
“Buy and hold” for anyone with “bullish intent” will soon prove to be a misstep.
I’m starting off the new year with a bang, banking just over 900 pips total in short trades via AUD/JPY, NZD/JPY as well CAD/JPY.
These pairs have fallen fast ‘n furious with the recent move towards “risk aversion” and there is never a better time to take money off the table than “when there is money on the table”!.
We’ve discussed the correlation of a stronger Yen and weaker Commodity currencies here time and time again – so these pairs ( being a no brainer ) provide the biggest bang for yer buck in “straight up” pitting the weakest against the strongest.
I will be planning to re enter these pairs in coming days, as they “may” take a reasonable bounce before continuing on their way down.
252K “new jobs” added “this month” ( primarily bus boys, servers and part-time workers ) with 294K new additions to the unemployment lines “this week”.
I marvel at the math…and the American vision that “things are improving”.
252k new jobs added this month…..with aprox 1.2 million “new additions” to the unemployment roll. Please…..help me understand how this can possibly be seen as anything other than “horrific”.
Seriously….someone with some “shred of sanity” I implore you….explain this to us.
252k “new” jobs paying close to ( if not under ) minimum wage, while 1.2 million people jump on the “unemployment benefits wagon” this month alone.
Now that’s what I call economic growth.
That’s what I call “recovery”.
Let’s see how things look near days end as USD and the “currency world in general” just isn’t buying it.
Holding steady….and waiting for the “swing high” in USD.
Readers / visitors from Singapore have now overtaken the total number of visitors to Forex Kong from all North American countries combined.
A recent study has found that the number of households with investable assets of US$1 million (S$1.26 million) or more rose 14 per cent to 188,000 last year. That means 17.1 per cent of households – or one in six – are millionaires ( this data may be a full year old ).
That’s like sitting down for dinner at your local McDonald’s and knowing that there is “at least one millionaire” sitting at the 4 or 5 tables surrounding you – although I don’t imagine many of them are “actually sitting at McDonald’s”.
Some other interesting facts about Singapore:
- Singapore is the fourth-largest foreign currency trading center in the world, according to the Bank for International Settlements.
- Singapore is the fourth-strongest financial market in the world. The World Economic Forum praised the country for its high degree of financial stability, bank efficiency, and commercial access to capital.
- Singapore could overtake Switzerland as the world’s largest offshore wealth hub by 2020, according to WealthInsight, a London-based research firm.
- There are more than 500 players in the asset management industry in Singapore, with total assets under management of more than S$1.4 trillion.
Obviously something must be going right for these “astute investors” and I’m very pleased to see their numbers growing.
Perhaps a couple of them may have managed to “push through the my sarcasm and disdain” – and taken precaution to protect their profits / exit the markets some months ago – I dunno but……I’ll be hard pressed to hear of any “American Bulls” that have survived January thus far. Impossible.
I expect a “slight bounce” here, providing a last chance opportunity to re-evaluate your current holdings before the real fun begins. As per charts/banter going back some weeks. Global risk has clearly topped.
I’ve seen plenty of waterfalls in my days ( those of Costa Rica the finest ) but have visions of “this one” topping all.
A shout out to Singapore and good luck to all!
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!