dollar weakness

A Dollar Bounce – Likely A Dead Cat

Forex Kong 7 Comments

If you’ve never heard the term “dead cat bounce” – here it is. A dead cat bounce is an industry term used to describe the upward movement of a given asset “contrary” to a larger degree down trend.

Dead Cat Bounce – In finance, a dead cat bounce is a small, brief recovery in the price of a declining stock.Derived from the idea that “even a dead cat will bounce if it falls from a great height”, the phrase, which originated on Wall Street, is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline. (thanks Wikipedia)

In this case – I guess it’s not exactly a dead cat bounce, as the dollar has only just recently begun it’s expected downward fall – but I do expect a “bounce” all the same. As far as trading it goes – if you are an equities buyer – I imagine you should get some nice opportunities to buy in coming days, before this thing lifts off to new highs.

As a currency trader – I am not going to bother doing anything short of watching the dollar closely – and aim to catch it at its peak (perhaps around 81 late in the week) before re-entering “short dollar” positions across the board. It’s not worth trying to squeeze every single penny, and push any further short dollar positions now ( considering I am 100% in cash).

Best trade is no trade at all here – and as I’ve said many times before – I am not missing anything – there are a million trades – and chasing anything is a fools game.

$dxy Novemeber 26

$dxy november 26th

Planning The Attack – The Power Of Cash

Forex Kong 12 Comments

Being 100% in cash is one of the best feelings a trader can have. You’ve reduced your risk to absolutely zero and have effectively “brought the soldiers home” – now free to do any number of things. You can choose to take a break – if that’s whats needed. You can regroup / step back and take a new look at the field. You can heal (if by chance your last battle has left the troops – how shall we say….”defeated”?) – or you can use the opportunity to do what I always do. What I always do!

Plan the next attack.

There is no room for complacency anymore. The times of making an investment decision and “checkin on it next month” are well behind us now – anyone suggesting otherwise is a complete and total fool. If investing is a battle – then we are at war every single minute of every single day, for the rest of  our god given lives – period. Accept it….deal with it – own it.

My plan (oh yes – you guessed it) is to get on the offensive, mobilize the troops and “take it to em” with everything I’ve got. You see……the enemy has already shown it’s hand. Giant “printing presses” now in place along the lines. Aimed at the sky with such power and might as to “rain down dollars” on the innocent children and families below.

The plan is flawed. And the spoils of war will soon go to those who have found ways to move quickly through the trenches, stay nimble, alert – and attack when given opportunity.

I plan to get ridiculously short the dollar in coming days – and expect and equally powerful move upward in all asset classes – as the “rain of dollars” floods markets and trenches alike….

What’s your plan?

 

(Seriously everyone – lets try to get in here this week and contribute – good or bad etc……lets hear what everybody’s thinking – It says “leave a reply” so……LEAVE ONE!)

Quantitative Easing For Dummies

Forex Kong 1 Comment

I just had to cut and paste the following graphic ( my apologies if proper credit is not given) as it best illustrates the significance and implications of the Fed’s QE money printing bonanza. Please take a good look at this – a real good look. Then consider the arguement of  ”inflation vs deflation” moving forward. I would be hard pressed to entertain idea of the dollar doing anything other than “going down” over the first half of of 2013 – minimum.

Inflation  is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. (thanks wikipedia) Trading it however – will most certainly not be as cut and dry.

this is how it looks in the literal sense

A Race For The Bottom – Who Cares Who Wins

Forex Kong 3 Comments

There will be no discussion of the “potencial outcomes and implications” of the U.S elections results here….short of this. Obama wins hands down, and the entire planet breathes a huge sigh of relief  that the U.S didn’t revert back to the previous policies/leadership that put them in this position in the first place. Trust me, political views aside (myself being Canadian and now living in Mexico – go figure) global financial markets are not interested in ” upsetting the apple cart” of continued money printing and easing – now being adopted worldwide.

Nothing will change regardless of the outcome – as the wheels are now set in motion for the endless printing of dollars ( and Euro…and Yen etc..) as the global  “race for the bottom”  – begins to pick up speed.

At risk of sounding like a broken record – as the value of the U.S dollar continues to fall – gold/silver ( and the commodity related currencies ) stand to be the largest benefactors – as money gets cheaper……..and “things” become more expensive.

Last I looked  – I believe its called inflation.

Watch for real time trading here  – via the twitter feed on the right hand column. I expect the week to be “profitable”….. to say the least.

Kong……..gone.

A Flood of Dollars – And Golden Rain

Forex Kong 3 Comments

As the mighty Hudson River swelled and unleashed its fury on the Jersey Shore – so too it appears that The U.S Federal  Reserves “flood of dollars” is set to break the levees in global markets.

The dollar looks to continue its turn downward – and this gorilla is calling for rain……………..”golden rain”!

Overnight gold has popped 8 or 9 bucks and is certainly looking ready for a fast break to the upside.

My accounts as well popped an additional 2% – and (if you can believe it) have already taken profits – looking to re enter here mid day / this afternoon after the usual “morning shenanigans” play out.

I never EVER worry about missing a trade after taking profits and looking to re enter in that:

  • One has to be thankful when things go their way so early on.
  • It always feels “amazing” sitting 100% in cash (especially when there is more of it than the day before.)
  • There are a million trades – and no “train is gonna leave the station” in a 24 hour period – without a large percentage of retracement / opportunity to jump back on board.

Things are looking good across the board for continued “Risk On” in markets – and the same strategy is currently in play – Short the U.S Dollar and Yen against the Commods – as well long n strong EUR/JPY.

I might pick up another couple pairs here today (long GBP/JPY,CHF/JPY) with small orders and wide stops as these can rip your head off without a moments notice.

All Green On My Screen – As Dollar Tops Out

Forex Kong 13 Comments

As suggested over the last two days – it appears that the dollar has finally completed its last push higher – and is looking to roll over. There may be a day left, or perhaps a quick spike in this evenings trading –  but I expect any further upside to be “limited” at best.

All trades entered as of last night are sitting in  profit – and the plan moving forward is shaping up – right on track.

I am currently short both the U.S Dollar and the Japanese Yen against the Commods – as well as long EUR/JPY.

Depending on overnight action, I will be adding to these positions rather aggressively here at the turn – as to maximize profits and catch this next leg “up in risk” – staying short the safe haven’s – and getting long the commods.

This is a rather significant turn here, as the dollar is unlikely to gather much support (thanks to Ben’s QE to the moon!). One would have to expect that “inverse” to the dollar moving lower – gold, silver and related stocks are set to fly.

I would not suggest missing this entry in gold and related stocks – as the gold bull is incredibly difficult to ride. The pullbacks are deep – so deep in fact that most traders dump at the bottom – and then get beat up trying to chase it.

There are only a few times a year ( if that ) when buying gold is a no brainer – this is one of those times.