Canada Tough Times – Headlines Suggest Otherwise

I’ve recently come to understand “just how complacent” the general investment community is up in Canada. Now don’t get me wrong –  I am an extremely proud Canadian. I love Canada as anyone so fortunate to have been born in Canada “should” love Canada. However…….

A recent article outlining the current “debt to income situation” in Canada, coupled with the recent “decline in housing sales” and recent rise in interest rates juuuuust might confirm what I’ve been fearing for some time.

The headlines continue to suggest an improving economy, and it appears that the vast majority of Canadians are still living under the guise that “nothing could possibly go wrong in the Great White North”.

I’m looking ahead to Canadian Dollar weakness….as well offer you some “additional reading” below the chart. Interest rates on the rise with the ratio of debt to income – not looking so great.

USD/CAD

The US dollar has fallen vs CAD for the past 2.5 months! I’m watching the 1.2458 number ( a double bottom / area of support looking back to the big green candle there in April ) for the fall to stop – USD to move back to the upside.

Expecting Double Bottom in USD/CAD

Expecting Double Bottom in USD/CAD

Some time ago, Deutsche Bank’s chief international economist, Torsten Slok, presented several charts which showed that “Canada is in serious trouble” mostly as a result of its over reliance on its frothy, bubbly housing sector, but also due to the fact that unlike the US, the average household had failed to reduce its debt load in time. Read more below….and take it for what it is. Canada “reality check” most certainly on the horizon.

http://www.zerohedge.com/news/2017-07-12/canada-serious-trouble-again-and-time-its-real

Trading Patience – Summer Doldrums Almost Over

Anyone who hasn’t already learned their lesson “this summer” can simply file it away for next year. You’ve learned something right? You’ve learned that you just can’t “make” markets move…no matter how badly you are scratching to hit those buttons! Markets suck during the summer, and I don’t care what anyone else has to say about. I know. I continue to survive – picking my shots when most likely to see reward….staying out of trouble when volume is low.

Summer is no time for big moves / big trades or big expectations. Take it. Learn from it…and consider yourself a better trader.Done deal.

Looking ahead….as much as it pains me to admit it…..this thing continues to pull in retailers at an incredible clip, and has every likelihood of blowing expectations “TO THE UPSIDE”.

All the pieces are in place really….as I receive more and more inquiries from old friends across the planet asking me for investment assistance “scared shitless” that they’re gonna miss out – as their broker just called with another hot deal.

All the makings of one incredible “blow off top / blast for the stars rip” as the last of the retail gang get’s off the couch with their 2k nest eggs. Sad in a sense as……these poor folk are very often buying the top and unable to act quickly enough to book profits before the fall. Seeing it s many times in the past…..it’s a cycle and it ALWAYS repeats.

I got bumped ( obviously ) on the last lil trade with The U.S Dollar ‘s continued fall. Certainly didn’t expect another daily cycle down, but that should be the last before both USD and U.S Stocks pop to the upside.

Charts? I got nothin……short of wishing I could chart my continued boredom / lack of participation vs some idiot out there pushing buttons all summer. Profits dick-head? I think not.

I will plow you in the face – the next dumb ass giving me a hard time in the comments section believe me. I’ve gotten on planes to “make things right” for a lot less.

Cool your jets kiddies….I’m back, and will be lighting it up again here shortly.

Chill.

 

 

 

 

Dollar Finally Bottoms – Flip A Coin On Stocks

Well well well…..it looks as though USD has finally, FINALLY found its bottom.

I can pull out a number of fantastic correlations / trades in the currency market ‘specific to USD’ but at this point in time…..the general market movement / usual correlations will be saved for another day – as we’ve all seen a number of these fall apart as of late.

Gold has fallen consistently “with” USD which in most cases makes no sense, tech stocks have been clobbered and considering the buoyancy in markets in general….have NOT been actively participating.

EUR/USD pretty straight forward here: SAFE TO SHORT

safe to short EUR

                                                                                  safe to short EUR

Markets continue to trade in “good ol summer fashion” leaving most traders scratching their heads looking for direction.

It’s nuts out there! You know it, I know it.

You’d think an intermediate bottom in USD would send Gold decidedly lower…but even there….gold has landed near an area of support so…..we’ve got some “rotation” going here, and need to take the time to figure out –  WHERE IS THE MONEY GOING NEXT?

Risk trade in AUD/JPY would appear to have hit resistance but…..nothing to write home about.

Risk Trade in AUD/JPY

                                                                                Risk Trade in AUD/JPY

It “almost looks to me” like a bottom in USD might amount to more U.S stocks being sold, and in turn US dollar reserves moving higher, while gold stays flat but….that’s pure speculation.

We need another day er two to see how things unfold from here. I’m short EUR/USD – and that’s it!

 

 

 

Market Surprise! – Dollar and Stocks To Fall

Step away from your computer for a couple of days and BAM!

Stocks peaked out on day 21 of their cycle, and the USD bounce just turned into a “USD crater”. Stocks could easily fall much lower over coming weeks so…

I wouldn’t think much of it considering that nearly ever single time stocks take a little break…they have generally popped back up in but – THIS TIME? The intermediate cycles have been so extended, the counts have been very difficult, but with today’s action coupled with the massive “profit taking event” in tech stocks some weeks ago?

Don’t go looking to buy a dip here! DO NOT GO HUNTING FOR A BUYING OPPORTUNITY!

If this is indeed the long-awaited “mini crash / intermediate decline in stocks” it will take weeks, and quite possibly roll over into yet another failed daily cycle pushing things lower for weeks “after that”.

It’s far, far to early to even consider this a buying opportunity, as you should have been looking at these past few months as selling opportunities anyway right?

I’m dumping my crappy “short MUX / summer play on Gold” and otherwise have “zero skin in the game”.

USD falling thru here very surprising so I am 100% out ( perhaps with a tiny profit ) first thing in the a.m.

Sorry….the sun is out, and as stated many many weeks ago……I’ve no time for this now. It’s a waste of my “oh so valuable time”.

Forex_Kong_Disgusted

       Forex_Kong_Disgusted

 

 

Still Short MUX – Still Long USD

I’m bored. You’re bored too.

The summer grind is certainly “doing its thing” so a quick update on my trade activity will have you rolling your eyes. “Common Kong! – Give us something to trade man! You’re killing us here!”

Just stay short Gold and related names…..as the move hasn’t really even happened yet. Stay long USD as again…..these last few days / weeks have generally traded flat asa pancake but an intermediate decline in Gold ( and subsequent rally in USD ) is the only thing worth looking at here short/medium term.

I’ve added to my short play on MUX ( as a cheap gold short nothing more ) and am still holding short EUR/USD.

It’s boring as hell…but these trades will materialize in a more significant manner here shortly….all you have to do is be patient.

Forex_Kong_Bored

       Forex_Kong_Bored

 

EUR/USD Chart – Gold Chart – USD Chart

Personally….I rarely look at this pair as any, “ANY indication” of larger market moves or global appetite for risk as – these are they two most widely held reserve type currencies on the planet, and their comparable  movement does nothing for me / my analysis or for the most part….my account.

Regardless….

The general “forex media / forex industry” promotes the trading of this pair like there’s no tomorrow, and new traders tend to love it. Don’t ask me why. Well ok ask me why…..cuz they don’t know anything about forex before they start trading it!

So if the coming move in forex markets “in general” can be at all illustrated for you “new comers” via this pair – take a look at the weekly chart of EUR/USD:

Resistance Ahead For EUR

Resistance Ahead For EUR

See that big red candle back near the first part of October? The one with the tall “wick” on it? High of 1.1305? Then looking back…..see the confluence area surrounding this price level “rough and nasty”?

Great.

Now check Gold:

Resistance For Gold

Resistance For Gold

Now USD:

Support For USD

Support For USD

These are the kinds of “large time frame” areas of support and resistance where you can start considering some “serious” trading . Not getting bogged down in the short-term flutters, if you can just manage to keep your friggin hands off the mouse for a day er two!

Not much more to be said here. You know what I’m getting at as this trade is getting very close.

It’s the “knowing ahead of time” and the “recognition” that these levels and correlations exist that will elevate your short term trading as you should “already know” the levels to watch for reversal. THEN pop down to your 1H charts and plot your entry.

Eur set to top. Gold set to top. USD set to bottom for a solid “medium term trade” so……start eyeing these charts for their reversal on the 1H at the bare minimum before even considering entry.

You owe me big time.

 

Kong Back In Cash – Markets Going Nowhere

As per my previous post – I have absolutely “zero expectations” for the next few weeks / months of trading.

I’ve seen this kind of market activity many, many times in the past. Dead money just sitting there doing nothing. Staring at it……not the way I choose to spend my days. Now, there is always the possibility that things may change…some major news event, or large-scale geo political scenario where markets react but seriously……in the current environment, the “Trump environment”?? One can only assume something impactful leading to further “downside” if anything.

This “summer thing” is for real, and rightfully so. People are out throwing frisbee’s with the dog – not hunkered down in some dingy basement pouring over charts.

Best recommendation I can make for trigger happy traders –  keep a close watch for news / anything that “might” provide opportunity to move the needle but otherwise..take this down time to do two things:

  1. Practice your entries on a one hour chart.
  2. Continue study on “macro markets” as opposed to “day to day activity” in a single market.

The one hour chart is where I generally make my entries “after” I’ve established a reasonable area of both “price and time” to do so. This generally dictated by daily cycle counts.

Getting a handle on “how this entire thing works” is extremely valuable. Once you’ve included Japan in your analysis, currencies and their roles on a global perspective “and” the relationship with bonds / stock prices and gold. You’ve got a very good platform to form your trade analysis.

If you only approach this as a technical exercise ( trading that is ) …..unfortunately you’ll struggle longer term.

I’m cashed out, short of small holdings in ACB ( Aurora Cannabis ) having blasted out my few “USD long trades” entered some days ago –  flat / break even / boring as hell / stuck in the mud.

I don’t waste time on this, when markets go on holidays.

 

Forex_Kong_Bored

                   Forex_Kong_Bored

 

 

 

Curb Your Expectations – Summer Has Arrived

I’ll make this short and sweet.

Just because you’ve got your fancy new monitors set up, and all your charts / bells / whistles / lights ‘a flashing – doesn’t mean you’re gonna find a trade. Human nature would have it that you “expect” amazing things to happen. You’ve got all the tools, you’ve even gone a little overboard on that “extra screen” and you’re hell-bent on sitting down every morning at your trade terminal, and conquering the world.

Sorry buddy…ain’t gonna happen.

I can’t tell you how many times in the distant past I was 100% completely “jacked” to jump on into markets based on some over night news release, or some new article I’d found. Like a kid on Christmas morning I’d be up well before the crack of dawn, hardly able to contain myself sitting there in dark waiting……waiting…waiting for that opening bell.

Then summer came along and spoiled the party.

Hours on end sitting there staring at charts now frozen. Pacing the floor in anticipation of “hitting my exit” only to find the trade moving sideways for days……then days ‘n days more. Finally one year it got so bad that I almost gave up. I just couldn’t understand. There it all was right in front of my face…lights flashing, news running, bing bing – bam bam! Let’s do this!!

ZZZ zzzz zzzz…….zip…nada..zero – nothin.

You can’t make markets move, and as much as it’s a difficult thing to do when you’re just so excited to just get in there and kick ass…you’ve got to understand.

There is a time to step on the gas, and there are times to pump the brakes. Summer has arrived baby.

Get ready for whole lot o’ nothin.

empty trade terminal

                                                                     empty trade terminal

 

Kong Getting Long – Bulls Catch A Break

I trade, and I trade well.

I have my bias sure ( as I am generally short humanity and long interplanetary travel ) but that’s beside the point. In order to trade well, one needs to put these things aside. I do my best to remain indifferent to market direction but.. even for us pro’s – this is often easier said than done.

If you look back at the bulk of my writing over the past years..you’ll see that I’ve matured. I’m not as angry as I once was “back in the day” when I first came to fully understand the degree to which markets are manipulated / designed. Now I don’t mean “markets are rigged” as….the stock market is only a simple reflection of human activity/sentiment on any given day ( you can’t rig that! ) but more so “the mechanism” through which we participate. The pre and after market activity for example, the stop runs…the central bank interventions, the media spin etc. All generally geared to rip your face off…and grind your bank account to dust.

I’m cynical to say the least. Can you really blame me?

That being said….I love every single minute of it. It’s my passion and I will never stop.

So here we are at an interesting junction where….I myself am presented with a conundrum of sorts, short of the many years experience and the “current knowledge / abilities” to see myself through.

I don’t want to buy dollars. But I’m going to.

The “old Kong” would have found any and every argument under the sun to justify / support the argument for the “continued demise of the American Dollar as the world’s reserve currency” and while this may hold true on much longer time frames – today’s not the day.

Grow people. Learn from your mistakes. Keep an open mind. Trade like a demon.

Kong getting long USD here tomorrow!

 

             Forex Kong Gets Long

 

 

Unkanny Kong! – How Do You Time This Stuff?

The ViX trade ( long UVXY at 11.80 ) has spiked 14% this morning alone.

Holding short USD trades against a number of other currencies – still seeing trades climb higher as USD continues to “waterfall” ( remember the “suggested waterfall some days ago? ) as 17 days of longs holding positions – wiped out in a single session.

You’ve  “hoped” and you’ve “held” long positions for a full 17 days now…..almost a full month you will never get back.Poof! Wiped in a single session.

I’m back in “celebration mode” here this morning as things have worked out rather well for ol Kong.

So……

How do I time this stuff?

First of all……I check my emotions  at the door, and don’t take an “emotional stand” on whether markets are moving higher or lower. I don’t give a rats ass…and you shouldn’t either. If you are learning to “trade” then you’ve got to stop thinking about “investing”. You continue to deny that anything can go wrong, and you continue to view “the short side” as some kind of demonic evil. Ridiculous.

You don’t think the big banks and Wall St. big shots get short? Please…..pull your head outta the sand. As much as the media coverage may show you “Carnage on Wall St. as Stocks Slide” – these guys where selling you stock all the way up and “gladly” shift the algorithm’s to “short as f&%k” to see you get cleaned out. You can guarantee it.

I can go on and on about my technical indicators ( only one – The Kongdicator ) as well my general view of the world ( as cynical as it is ) but neither of these will really give you much insight.

There is a “creativity” in all of this, and it’s something that is learned over years and years of study and practice. It’s the currency markets that provide the most “actionable information” coupled with as large a “macro view” as you can muster – in order to see past the news. A little confidence doesn’t hurt either but that my friends – comes later.

Cycles also play a role as human beings generally move as a heard. If you can start to distinguish the patterns / repetition – eventually you’ll win. This also takes time but…is certainly not beyond the learning / capabilities of your average Joe.

For fun why don’t you pull up a chart and try to count the number of days between significant “lows or highs” in any given asset and see if you can find any pattern. If you look hard enough you will see these same patterns / repetitions on any time frame…only that they become less and less reliable the more granular you go.

Anything under a 1H chart is noise…and even the 1H needs close attention.

Give it a go and get back to me. I’m not much for “teaching this stuff” as much as I am with “sharing my activity” but…hey – let’s see if you come up with anything.

Forex_Kong_For_Real

       Forex_Kong_Human_Form