Stocks have almost completed their “intermediate cycle low” so you “holders of paper” only need to wait another day er two / catch your breath / don’t freak out.
You have grown “so complacent here” that these “few down days” have you on pins and needles, debating whether you should simply just “sell” before you’re left with nothing.
You sell on green candles traders ( some days ago? )…… and you buy on red.
None the less…..we are still very much so in a right translated / daily uptrend in stocks – with this cycle extending to like…..38-40 days? Wow….a long one….but now near completion.
Dow Nears Support
This is still a very strong uptrend – with an “intermediate cycle decline” now near complete. The test of support area ( as seen by the black line ) looking good.
I can only assume the next leg higher starts like……tomorrow.
Bitcoin slowly moving up from the proposed low at 6400.00
Gold = flat ( who really cares right? )
USD – Crater on deck – as suggested.
Hey all – you know your Japanese candlesticks well right?
What are you seeing here?
Heed The Wick – USD Done
Short USD at will, or if more responsible…..wait for a daily “swing high” where you see a candle such as this followed by a daily candle that closes LOWER. Then short BELOW that low.
Daily cycles can vary in length for different assets, but in general The U.S Dollar tends to move in an “18-22 day period” from trough to trough.
The previous daily cycle topped out on day 4 then rolled over for a good solid move lower over a 16 day period.
Today marks the beginning of a new daily cycle now………don’t get excited.
USD Downtrend to Continue
A new daily cycle that will “again fail” early ( if not immediately ) and roll back over for another “crater” into oblivion so……..a new daily cycle in a “bearish downtrend” only providing further opportunity to SHORT. The dark black line showing the resistance zone for USD. She ain’t poppin thru that – no way!
I’m not flinching / moving a muscle as today is a single day’s action that has already run straight into overhead resistance. The U.S Dollar is NOT reversing its downward trajectory here – hell no.
Waterfalls ahead. Stay Short – keep accumulating crypto. You’ll see.
I welcome your comments. Trolls and fans alike…….bring it on people. If you’ve got a gripe.
As I had mentioned some time ago, the “infrequency of posts” can be generally correlated to “how well I’m doing in markets” or more so in recent days – my complacency. Admittedly – complacent.
Why so Kong? You’ve always advocated vigilance and planning / observation as key elements to any trade plan. How’d you get so “chill” here these days? The world is crazy! What about Trump? Trump??
As much as the American’s have such terrible views of their current sitting President – have you seen how markets are performing lately? Trump continues to confuse…..but the big boys / highest earners / tax bracket / big business / economic drivers are loving it!
And now another massive depreciation of the U.S Dollar to boot? Anyone in the “financial biz” in complete heaven!
The “short USD trade” now 5 days running……now swung high on a MONTHLY chart = doom / waterfall action in USD coming AGAIN here pronto.
When you see an over night wash out like that……..you take notice.
A full 200 point drop and return to 97.80? Common – hit this thing today.
As contrarian as it may sound – you all know I’m looking for an intermediate “top” in USD – leading to a much larger decline.
The immediate reaction ( obviously ) to the “official end to QE” resulted in a huge spike in USD, sending EUR/USD and GBP/USD lower as well USD/CHF higher.
Today’s “candle” in $DXY ( pin bar ) is now looking prime for reversal, as it will take very little price action tomorrow – to close under today’s low.
This would fall right in line with a bottoming in JPY, and our expectation of “risk aversion” to continue.
If you’ve had any doubts of my continued view of both JPY as well The Nikkei – I hope this “blatant example” can finally put them to rest.
The correlation of “JPY down = risk on” and “JPY up = risk off” could not be more obvious as The SP 500 has done “the exact opposite” over the past week and a half.
I suggested some time ago that the currency pair USD/JPY “is the market” as Yen is borrowed on the cheap , then converted to USD to buy stocks. This could not be more obvious in viewing the correlation over this last “massive V-shaped move” in both Yen as well The SP.
USD reversal “lower” ( any day now ) and JPY confirming reversal “higher” will put a stamp on the end of this upward correction – and the beginning of our next leg lower.
We are very close here folks.
Aside from the currencies, nearly every other thing I track / read / research suggests that this may not only be a strong area for “correction” – but the start of something much larger.
There has rarely ( if ever ) been a time in history when as many separate indicators / charts / graphs and info has been “this skewed” to suggest such divergence and risk of serious “downside action in global appetite for risk”.
Considering the current geopolitical backdrop and with U.S Equities still “clinging” to the highs, personally – I don’t see a blow off top scenario. To whatever degree that retail investors have “taken the bait” over the past 7 months….I believe they are “already in”.
The situation with Ukraine really only being the tip of the iceberg now as Putin’s “Gazprom” now announces “massive oil deal with China” again…bypassing the U.S Dollar in trade. These are tremendous blows to the U.S system, and make clear The U.S “true intension” in Eastern Europe.
They must save the U.S Dollar as world reserve currency – and will stage a war to do so.
The Nikkei rolled over a couple of days ago, USD looks set to plunge along with equities, and the entire currency market has more or less moved “risk off”, with USD/JPY “not breaking out”, falling back into range and expected to fall further.
The real-time trades in currencies, gold and silver as well U.S Equities, weekly reporting and daily commentary can be found at the members site: Forex Trading With Kong.
Again….you generally need to be “ahead of these moves” in order to take advantage ( note yesterdays post- please scroll down ).
Gold, & Silver Jump As Citi Sells All USD Positions Fearing “Squeeze”
I envision a time ( in the not so distant future ) when “all things American” ( USD, Stocks and most certainly the bonds ) are sold.
I’m sure you’ve noticed the correlation of USD strength = U.S Equities strength so…..one would have to imagine the complete and total “inverse relationship” as well right?
Or they just all keep going up forever. RIght.
Little chance of that.
Other than the few short USD positions already in play I’m more or less “cash ready” for the large positions “long JPY” ( against most every other currency on the planet ) kicking in here soon.
No shorts in SP 500 as of yet.
More at the Members Site: Forex Trading With Kong
At this point in the game I have little concern for the price of gold as it’s trading almost exactly in tandem with the Japanese Yen ( JPY ) – both functioning as obvious “safe havens”.
These assets obviously gain momentum when “risk comes off” and considering that markets are now re testing the near term highs – what should one expect? ( insert lightbulb above head here )
The average investor, caught in the headlights of the main stream media and The Fed is certainly not “seeking safety” here as of this morning
Appreciate that nearly everything I track is stretched to extremes right now and rightfully so as…we are so very close to one of the largest turns this market will have seen in a very long time.
Why would gold be any different? A couple bucks here and a couple bucks there – not to worry.
These low volume days ( some of the lowest volume days of the year ) are legendary for getting people excited / worried as prices in “all assets” swing to extremes, washing out weak hands, luring in new buyers etc…
It’s always this way before a major turn in markets as the boys at your local brokerage / bank take the opportunity to push prices “as far in their favor as possible” before dumping.
September has everyone back in their cubicles. Likely back in their cubicles selling stocks and buying gold.
Gold is good – just not particularly “speedy” here at the moment.
Likely a pretty slow / sleepy to start to the week considering the slow summer months so…
Long EUR/USD still looks like the most reasonable play here for a bounce in risk / move lower in USD.
The JPY pairs are behaving “exactly as expected here” so for those interested in taking a shot ya…..just look to get your stops below those “prior near term lows” and let it be what it will be.
Commod currencies ( AUD / NZD and CAD ) would usually bounce along side risk as well but from what I can see / consider here these past days – they aren’t looking to make any major moves.
With AUD now “finally” showing its hand I think it’s safe to say these currencies have already began the larger “longer term move” in selling off / making the turn.
Sure we can expect a bounce but I really don’t think they’ll get to far.
We’ve identified that AUD has now rolled over on has high a time frame as the 4H – taking months to do so.
This kind of thing is not just “quickly reversed” so again……please consider any further “upside” in AUD to be “counter trend” and trade it accordingly.
I’m adding a couple contracts long EUR/USD here today, and will trade it actively should we see some volume and a solid move.
The benefit of staggering small orders over time should be noted here….as EUR/USD still sits around 1.34 – now going on a full week.
There is “no benefit” in jumping into a trade with your full position / max commitment during times like these, as you tie up capital that essentially just “sits there” – grinding you to shreds.
Forex moves a lot slower than most short-term traders initially understand ( getting caught up in the smaller time frame volatility / chop ) when “in reality” – price is going nowhere.
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