forex market analysis

Back To Trading Forex – War Averted

Forex Kong 1 Comment

Trading forex in the coming week should prove to be volatile to say the least. We’ve got all kinds of data coming out, as well whatever “monkey wrench” the U.S cares to throw into the mix “war wise”.

Overnight China’s manufacturing Purchasing Managers’ Index (CPMINDX) was 51.0 in August, a touch better reading than expected – which could give AUD a boost. Similar reports are expected from both the Eurozone as well U.K, as well the European Central Banks policy meetings on the 5th.

Assuming that “no war” should be generally a positive for markets, I’m sticking to the theory that we will see continued weakness in USD in the coming week, leading into the “war decisions” scheduled for September 9th.

I imagine that whatever decision U.S Congress makes – this should provide an excellent “pivot” in markets, and likely provide the “needed catalyst” to get things moving in a more decisive manner.

In line with my originally suggested time line “mid September” looks to be an excellent time for USD to make a reasonable bounce, lining up quite perfectly with the typical flow “towards US Dollars” in times of extreme fear / risk aversion.

Trade wise my expectations are relatively low next, as I will likely be taking profits on just about anything and everything as I see them come in – looking to get to 100% straight cash for September 9th area, then “possible reversal” of intermediate time frame and “possibly” even fundamental market view.

YOU DON’T WANT TO GET CAUGHT SHORT THE U.S DOLLAR IN TIMES OF GLOBAL RISK AVERSION, AS THE MOVES CAN BE VERY SUDDEN AND VERY LARGE.

Russia Hosts G20 – Obama To Attend?

Forex Kong 9 Comments

Obama is headed for Sweden on Tuesday, then off to the next G20 meeting in…………if you can believe it – RUSSIA!

The uphill battle in looking for global support in attacking Syria looks to be moving as suggested. Britain’s out, and as suggested The U.N Security Council shows no support for the move, as well I believe NATO ( please don’t quote me as I’ve read a million stories here this morning) has also squashed the idea.

This leaves Obama “literally” on his own, as actions against Syria under these conditions would now put “HIM” in breach and violation of International Law.

I’m trying my best to wrap my head around a scenario where this quack shoots “unauthorized missiles” at a country where “proof of wrong doing” is still just a “headline in U.S news” , and then plans to sit around a table with other world leaders at the G20 in Russia  – just a few days later.

If this Bashar al – Assad guy is a nut bar, then we’d better create another category of “nut bars” for Obama.

You’d have to be out of your mind to do something like this – absolutely out of your mind.

Russia Won't Be Happy – Not At All

Forex Kong 9 Comments

It would be extremely irresponsible ( in my eyes ) for Obama and the U.S to actually “attack” Syria here.

We’ve now heard from the Brits who are “officially out” as well Germany will have no part in it. Russia has mobilized a couple of their own “battleships” in the area and have major MAJOR interests in Syria.

Russia is a permanent member of the U.N. Security Council. It has the power to veto Security Council resolutions against the Syrian regime and has done so repeatedly over the past two years. So, if the United States and its allies are relying on a U.N. mandate to greenlight a military strike, they may be waiting a long time.

Syria provides Russia with its only port in the Mediterranean so you can imagine how significant / important Syria is to Russia’s military / naval interests , as well what the port may represent economically. It’s only port!

Russia will not simply stand by and watch such a significant asset go – absolutely not.

So where does that leave Obama? What’s he gonna do? Lob a couple missles in there and “make a statement”?

Complete “middle ages” move.

You’d have to be pretty well prepared and have a mighty big plan to just “go off and decide to launch a couple missles” this time.

I still find it very, very hard to phathom this happening.

Reader Poll – U.S Attack On Syria

Forex Kong 9 Comments

For me it’s pretty simple.

An attack on Syria for “proposed use of chemical weapons” is 100% completely ridiculous, and absolutely out of the question. Let alone the real world implications and ramifications of such actions considering big players like China, Russia and Iran. Let alone that the U.S currently can’t afford to pay its own credit card bill ( so let’s add a “war” to the list).

Curiosity has gotten the better of me this morning ( not to mention sitting here doing “zip” while temporarily “down on the canvas” short USD)

What do you think?

[polldaddy poll=7356509]

USD Surge – A Test Of My Resolve

Forex Kong 1 Comment

There will come a time in our “not so distant future” that I will shift my trades and longer term strategy to consider a strong USD. Not today though.

I ‘d originally posted / suggested that perhaps some time late Sept, that USD would finally find its near term low – and “do what currencies do” making a solid move in the opposite direction. The surge in USD buying over night will have taken out a large number of smaller players , and has also left me in the red on a couple of outstanding trades. Is this the start of the “real move” higher in USD? I don’t think so.

Yes we’ve seen a trend line breached, and yes the “likelihood of war” could certainly be the event that spurs true safe haven positioning ( of which USD still acts as the world’s reserve currency so…. ) – this still remains to be seen.

Does the “suddenly positive” data released this morning on U.S GDP as well unemployment claims have anything to do with it?

Would the fact that “gold has swung low on a monthly chart” ( a fairly significant dynamic when price has moved higher than last month’s high) provide an interesting point / price area to “shake the tree” a bit? Makes sense to me.

The key is not to make any big decisions until the picture is made clear. If a single day’s trading doesn’t go your way, drastically affecting your account balance – you’re trading far to large / leveraged.

We don’t do that around here.

I’ll let this “sell back off” and see where things sit later in the day / evening. My “hunch” is we’ve seen a lil surge/wiped a pile of small traders off the map, and that things will continue in the same direction.

 

 

The Holy Grail – It's Right In Front Of You

Forex Kong 2 Comments

With over 400 pips banked long JPY in only a few short hours – the short USD trade has still not made its move.

We’ve seen rejection at the downward sloping trend line as well a solid reversal on the daily chart, but in all many USD related pairs have shown very little “actual movement” considering these factors.

I hate sideways, and I mean I REALLY HATE SIDEWAYS but unfortunately accept it as a part of trading. You can time an entry to perfection ( if that’s your thing ) and STILL end up seeing the same level bounced around for days and days on end. This is a fundamental element of currency trading as big players often need days and days / weeks and weeks to slowly scale into positions. There is no such thing as “perfect entry” – lending credence to my “scaled entry” ( smaller orders over time ) as means to compensate.

USD/CAD has more or less traded in a range as small as 30 pips for days now! Does this mean an entry “three days prior” was in error? Of course not. It generally means that newbies have no freakin idea what they are doing – expecting some kind of “holy grail” email alert, then “all in”, then fortune and fame.

This will never happen in Forex.

The holy grail “IS” patience.

Further USD weakness expected here at Forex Kong in case you’ve grown frustrated, thrown in the towel, dumped your trades in fear, never took one in the first place. All things considered – you haven’t missed a thing.

Except in JPY. But of course……….you didn’t have the patience for that trade either.

Central Banks Love Wars – Syria No Different

Forex Kong 4 Comments

If there was ever a way for Central Banks to “rake in the dollars” it’s assisting / financing governments in going to war. Central Banks love war.

History shows us that “The Rothschild’s” of London where very much involved with financing “both sides” of the civil war in America, not to mention ( some dare say ) “creating” the war itself as means to divide this “prosperous” new economy.

I’m no historian but you can google it to your little heart’s content – I’m not making this stuff up.

What better way to “bring in the bacon” than finance a war don’t you think? You’ve got the people rallied behind you, you’ve got the “bad guys” up against a wall – and you’ve got all the military backing to really make a show! Only thing is……..you’re flat busted!!

How on Earth can one even phathom the costs to the U.S “above and beyond” the ridiculous “balloon of debt” currently hanging overhead? Oh and by the way “we forgot to mention” – we are now going to war.

Who’s chipping in the gas money?

This has gone past ridiculous, as the “ultimate excuse” for continued printing has now reared it’s ugly head.

Lets go to war.

Unreal.

There Will Be No Taper – Stop Listening

Forex Kong 4 Comments

The Fed will not start tapering its bond purchasing program in September, just as they will likely find reason to continue  or even “expand the program” come December. You’ve spent a considerable amount of time contemplating this as suggested by your local T.V / media / CNBC / clowns but now please….just put it to rest. There is not a single shred of data that could support the Fed stepping away from markets as soon as Sept or Dec for that matter.

Take today for example where the Fed has made 1.5 Billion dollars in outright treasury coupon purchases, and the freakin market can barely even keeps its head above water. 1.5 BILLION DOLLARS JUST TODAY!

Here’s the Fed’s “purchase schedule” link – you can see for yourself.

http://www.newyorkfed.org/markets/tot_operation_schedule.html

If Ben had called in sick this morning, and was unable to make it down to the exchange with his suitcase of 1.5 BILLION DOLLARS in bond purchase confetti where would the market be today?

There is NO ONE ELSE BUYING!

What remains to be seen is what investors reaction will be “now” when the Fed announces “No Tapering”.

Personally – I’d “like” to see the true reflection of such continued actions and would look for markets to interpret this as “things are still 100% totally screwed” and sell like mad but I’m likely dreaming.

Anyway you cut it – it’s bad for USD. It’s bad for USD short term….and it’s very bad for USD long term. Medium term?? – You’ll really need to be careful there.

Kong……..certainly not long.

 

 

More U.S Data Disappoints – Nothing New

Forex Kong 5 Comments

More horrible data out of the U.S this morning as orders for U.S “durable goods” fell further than expected.

Of particular note Aircraft orders were off 52.3%, for example after rising 33.8% in June. How ridiculous can you get? Orders for new aircraft “up” 33.8% in June then “down” 52.3% in July. I guess when you’re only selling 3 planes one month then 1 the next your numbers might vary so wildly. No…..I guess it would be 2 planes sold in June and only 1 in July for a 50% reduction. Who cares – the numbers mean nothing as  the entire thing is still just sitting there……stuck in the mud.

I need to make light of a prior post, and a graphic illustrating the “complete and total disconnect” of actual macro data , and the current levels in U.S stock markets. Again – ridiculous.

https://forexkong.com/2013/05/19/the-fed-gold-stocks-and-usd-explained/

These kinds of situations are always tough on a fundamental trader as you “just can’t step on the gas” when you don’t have these fundamentals lined up as straight as you’d like. This summer’s trading has been at considerably lower levels of exposure, and with modest expectations so – I’m most certainly looking forward to the fall.

U.S debt ceiling talks are up next as “once again” (short of an extension) the U.S is officially broke.

I remain short USD here as of this morning – looking for another solid leg down.

 

 

A Day A Trend – Does Not Make

Forex Kong 9 Comments

Getting away from your computer and the markets for a day or two, can provide much-needed perspective and a fresh outlook on return. It’s easy to get caught up in every little squiggle the market makes, not to mention the never-ending stream of “massive headlines” – threatening to take you out at a moments notice.

As well ( and very much like fly fishing ) you need to be able to read the current conditions and evaluate where “and when” to cast your line, as we wouldn’t all rush down to the river in the middle of a rainstorm right?

Forex_Kong_Fishing_And_Trading

Forex_Kong_Fishing_And_Trading

Markets are no different. I don’t try to wade across rapid flowing water well up over my knees, just as I don’t go “all in” on some silly headline during the last couple weeks of summer. Years and years of experience, and countless hours of practice have it that I may not go fishing as often – but I most certainly catch more fish.

Leading into the Fed Minutes here around 2 o’clock – I see that very little has changed here in the short-term, and will likely let the dust settle then “re-enter / add” to a few existing positions – still centered on further USD weakness.

If by some absolute “bizarre shift in the universe” Bernanke actually “says taper” or actually “says” what the plan will be moving forward (as opposed to just sticking to the same ol puppet show) I will most certainly re-evaluate.

I see little to “no chance” of this happening.