forex market analysis

Mind The Hammer – Japanese Candles Tell All

Forex Kong 2 Comments

Can you see the candle formation currently forming on $DXY – The U.S Dollar Index? That’s reversal shit there.

A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick. In order for a candle to be a valid hammer most traders say the lower wick must be two times greater than the size of the body portion of the candle, and the body of the candle must be at the upper end of the trading range.

When you see the hammer form in a downtrend this is a sign of a potential reversal in the market as the long lower wick represents a period of trading where the sellers were initially in control but the buyers were able to reverse that control and drive prices back up to close near the high for the day, thus the short body at the top of the candle.

After seeing this chart pattern form in the market most traders will wait for the next period to open higher than the close of the previous period to confirm that the buyers are actually in control.

Two additional things that traders will look for to place more significance on the pattern are a long lower wick and an increase in volume for the time period that formed the hammer.

And here’s the kick in the face for those thinking this market is still properly correlated –  stocks taking a hit.

Complete and total gong show out there folks…..stick to what you know and don’t even try to understand it day to day.

I’m full stop and reversal on USD with orders sitting above and below. Japan may well have more to show us this evening….but we’ll just have to wait til then.

When gold and silver mining companies pull back here ( on USD strength ) BOOM! – Entry of a lifetime coming very soon. I shall keep you posted.

 

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Trading Is Art – Filter Out The Noise

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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.

HOWEVER!

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.

Kathy Lien – Completely Wrong About USD

Forex Kong Got something to say?

Another CNBC talking head pushing her latest headline: Fed Statement Is Good News For U.S. Dollar

How do these “supposed” industry analysts get this stuff so completely and totally wrong?? While a simple off planet ape keeps getting it right?

Kathy Lien Managing Director of FX Strategy for BK Asset Management is obviously just another cog in the media wheel, sputtering out mindless garb aimed at keeping you trusting, keeping you in belief that the financial systems are stable and working in your favor.

Overnight here in the jungle, The U.S Dollar has finally broken support – after trading sideways for essentially the entire month, and things look very ugly in Japan. The Nikkei is now down -630 ( 3.6 % ) and USD has absolutely dive bomb a full 300 pips vs JPY. The short USD trade will finally pay “the big one” allowing me to finally purchase the magnets and nuclear material I need to get back home.

The profits are staggering. Thank you Kathy –  for selling the retail trading community “exactly what I needed” to catch the vast majority of them on the wrong side of the trade. I will be closing these trades immediately ( as many will just now look to get in ) and continue to place smaller trades “under the action”.

It will be interesting to see how the next couple trading days go there in the U.S. That ol saying ( however cliché ) Sell in May – Go away. I don’t really buy it. So we’ll see.

Future_Kong_Nuclear

Future_Kong_Nuclear

Step Outside – Embrace Death – Start Living

Forex Kong 4 Comments

You think I could pull this off if I was scared?

I know you……..

Well…..I know some of you.

I know a handful of successful people who kick around here on occasion – likely getting  a bit of a charge out of good ol Kong as….these are people who have weathered their own storm, and can relate. People who’ve made sacrifice, people who’ve taken chances. People who’ve thrown “caution to the wind” to realize their dreams.

People that recognize you don’t get anything for free in this world, and that nothing…..and I mean NOTHING can stop you if you work hard and believe in yourself.

Is that you?

Or are you some “lurker” here fishing for a “free tip” –  hoping you’ve lucked into the “lotto blog” and your wildest hopes/dreams will be instantly realized in doing what I say…..no effort….no sacrifice……no “self belief”?

Have you lost your mind?

In any case……….

I’ve been invited to a party this evening. A friend here in Playa. A very successful gent from Holland running a very successful beach bar and club. A celebration of birth on a level you’ll likely never see in your life.

I’ll pass thank you.

This is how it works for me…….

I’m not much for “birth” as much as I am for dieing.

If I didn’t approach it this way –  how could I have lived this incredible life?

If I didn’t have complete and total belief / conviction that this “brief time in human form” was exactly that well….how could I possibly have done the things I’ve done? Imagine if I lived a life “in fear”?? How could I know what’s possible?

Do you know what’s possible? Do you know what you are capable of? Are you scared to die –  or perhaps scared of living? Do you think you know the difference?

Total bullshit.

The sooner you start thinking/believing  you are “eternal” and that this “brief stint as a werkin joe” is just a stop over – the sooner you and I start getting along.

Don’t do anything stupid ( short of the standard stupid shit we do ever day ) but seriously….

Step outside. Embrace death…….and you never know – you might just start living.

This blog is gonna change soon. I’m bored stiff with the simple math of  trading.

Psychology coming soon to a theatre near you.

Stay tuned er bug off.

Thoth

Thoth

The U.S Dollar – Back On The Downside

Forex Kong 2 Comments

Did you enjoy the tiny gains made “long USD” some days ago?

I didn’t think so.

I’m getting back on the “short train” with USD as the “6 day long suggestion” has obviously run it’s course.

This daily cycle looks to have rolled over as early as day “3” so once again we are looking at a left translated cycle – following the previous failed daily cycle so…….down we go.

It might be a touch late to jump into pairs such as GBP/USD or EUR/USD so I would suggest waiting for a small intra day pullback “or” placing limit buy orders “above” today’s action and waiting to get picked up on momentum.

Are you still hanging long? Why would you do that?

The next leg lower has lots of room to fall.

I like when things fall, as fear is far more motivating than greed. I’m here to trade, and that usually works out best when people start getting scared.

But you’re not worried about anything are you?

 

 

USD Cycle – New Daily Cycle Begins

Forex Kong 6 Comments

The short USD Trade has been all too kind.

Have a peak at some “marketing timing” as a new daily cycle now begins for USD. I’m obviously 100% completely cash.

For the brave at heart – full reversal trade here….feel free to take a couple of days on the long side if you like.

Not for me….as I trade with the trend, but I’m sure you’ll squeeze a couple of days ( maybe as many as 6 ) long here if ya like. Have at it.

I’m hitting the oysters hard. No plans to trade for at least the coming week.

 

 

USD Devastation – USD/JPY Over The Edge

Forex Kong 2 Comments

Absolutely incredible.

Silly people clinging to their television sets, clinging to their currency – still clinging to the ridiculous notion that “everything is going well”.

Straight up…..anyone suggesting that you “buy” is likely a banker, a broker or some dumb ass blogger with a single strategy ( or total lack of strategy ) appealing to you on the only level they can.

The notion that “bears are negative” and bulls are “positive” is completely and totally ridiculous as this is a “market” that trades in both directions. If you can’t develop strategies for the “red candles” how on earth do you possibly think you can be successful? Just buy and hold? Just “buy” cuz you are “optimistic about the future”? Dumb.

I’m as optimistic as it gets. Building my spaceship, saving my pennies for the liver transplant I expect to get somewhere down the road..plotting my investments in Graphene and spending my spare time plugging away at the latest developments in physics. The future looks amazing! But what the f#@k does that have to do with making money in the markets?

Blind optimism has no place here. It’s actually pretty irresponsible.

Since the vast majority of you don’t even trade Forex, it’s very likely that you lack proper context. If you dig back into the blog, you’ll find countless references to the fact that “currency markets lead all other markets”. Pretty straight forward considering that you need “money” to buy stocks so…….there it is. If you’re watching the money – you will always be one step ahead.

So what’s the deal with my USD Short Trade?

The deal is – it’s been 8 straight days since entry, and the trade has been amazing.

The US Dollar has absolutely cratered against it’s “printing partner/funding currency” the Japanese Yen. Didn’t hear too much about it in the news? Not surprising.

USD/JPY has fallen 1700 pips ( yes that’s right – 1700 pips! ) since markets topped out some months ago., and is quickly approaching “intervention territory” as far as The Bank of Japan goes. The huge move in Japanese Yen – a Tsunami for the Japanese economy.

USD-JPY_April

USD-JPY_April

 

I’m banking profits, as well letting a couple of these trades run with a tight stop as the money has already been made on this recent “leg lower in USD” but don’t be mistaken.

 

There will be another one coming. Bank on it.

 

 

 

Apple At 200 SMA – Approach From Below

Forex Kong Got something to say?

I don’t spend too much time trading high priced U.S stocks but see that good ol Apple has now touched the 200 SMA from below.

Take a quick look here:

Aapl - April 4th

Aapl – April 4th

 

Strategy wise this is pretty straight forward – placing “limit sell orders” under 110 – 109.00 and just let the market do her thing.

You’ll get picked up with momentum….otherwise you are safely tucked away should Apple shoot for the starts…but I find that highly unlikely.

Many believe that Apple is a pretty good indicator of “markets as a whole” so it bears consideration. A turn lower here at the 200 SMA looks quite probable.

Japan Turns First – You Know What That Means

Forex Kong 6 Comments

It’s funny really….well perhaps not, as there is real money at stake but…

Placing a human being in front of a computer, loading it full of money ( leverged money ) with a big red “sell button” in one hand and a big green “buy button” in the other.

An interesting experiment to observe. Throw the T.V and main stream media into the mix and you’ve got your self a real recipe for disaster. Or not depending on your ability to control fear….and greed.

Japan making the expected turn here first ( Down -600 points here over night ) so you all know what that means.

Whatcha gonna do? You pressing the big red button yet? Maybe greed has got you by the tail – who knows.

You’re only human right?

 

 

 

SP 500 and Risk – Second Chance To Sell

Forex Kong 1 Comment

If you’ve been fortunate enough to have timed the low back in February – Bravo!

Seriously…..job well done in this trade environment.

But!

Don’t get complacent here. This is what I would call a “second chance” as I expect to see the SP 500 ( and all other world markets ) roll over here around 2075-2100 ( duh – right? ) then proceed lower – taking out the lows at 1800.

SP 500 March 30th 2016

SP 500 March 30th 2016

Yes that’s right – taking out the lows at 1800.

If I where a gambling man…..I would simply look to book “any” profits I’ve got over the next day or two, and put away the charts for a couple months.

You don’t trade Forex so don’t worry about it.

I’m two days into my “short USD trade” and just getting started.

A significant trade indeed.