forex trading

The Week Ahead – For Traders And Morons Alike

Forex Kong 11 Comments

Chinese Manufacturing PMI came in Saturday with a miss at 49.8 – again signalling that the world’s “economic power house” is now in contraction, so I wouldn’t be expecting a big “up day” tomorrow morning.

One needs to “completely ignore” the current slew of media headlines as every Central Bank / manipulated media outlet on the planet is on “full alert” to do whatever they possibly can to assure the general investment community that “all is well – there is nothing to worry about at all”. Right.

European stocks have had their “booster shot” due to the QE announcement from The ECB, but have now been rejected at the previous highs.

$FTSE_Feb_1_Forex_Kong

$FTSE_Feb_1_Forex_Kong

As totally frustrating as the last few weeks ( if not months ) of trading has been, we’ve now seen the injection of another “trillion” in proposed asset purchases and still…..even still – markets can’t move any higher. Tops are long, tops are drawn out, tops are a pain in the ass but……now with The ECB “done” – seriously…….what’s left from the CB’s to push this thing any higher? Zip.

EUR / USD finally showing solid signs of bottoming / finding a low.

EUR_USD_Feb_1_Forex_Kong

EUR_USD_Feb_1_Forex_Kong

Interesting to note The CRB Commodities Index, as one could entertain the scenario that money comes out of ridiculously bloated / bullshit pumped up stocks, and flows into commodities.

$CRB_Feb_1_Forex_Kong

$CRB_Feb_1_Forex_Kong

The U.S Dollar rampage should conclude here pronto – as it’s exhausted to say the least. Two “doji candles in a row” signalling obvious “indecision” and with commodities looking to bottom out we understand the correlation. A weaker US Dollar ( finally ) = rising commodity costs.

$USD_Feb_1_Forex_Kong

$USD_Feb_1_Forex_Kong

The SP 500 along side “risk in general” has been weak for some time now…but still hasn’t “kicked off” on any kind of lasting downtrend. The whipsaws / sideways trading has been a pain, but all with conclude here shortly.

Even if The SP “does” get a bounce to around 2040 area…it doesn’t make a hair of difference medium term. The next leg down will bring tears to your eyes, fear to your wife and a fat hole in your account should you decide to stay the course.

$SPX_Feb_1_Forex_Kong

$SPX_Feb_1_Forex_Kong

The Canadian TSX as well as virtually all equities indexes globally are about to take the pain as The Nikkei ( suggested to reverse a few days ago ) has also hit overhead resistance and now looks to dump.

Currency wise little has changed really – as the general theme of long JPY vs the commodity currencies as well short USD vs E.U currencies still stands.

 

Two Days Left For Bulls – Still Trying To Ride

Forex Kong 3 Comments

The weather here this time of year is absolutely beautiful, with the sun shining and the cool breeze blowing in off the Caribbean sea.

A retired German couple has moved in across the way, with the Mrs. out tending to her flower pots by day, and the gentleman blessing us with the sweet sounds of his accordion / squeeze box music by night. Happy days indeed for those not concerned with the daily comings and goings of the U.S stock market.

A bounce here to around the 2040 Level in SP 500 should give the few remaining bulls ( or at least those that still have a couple bucks left ) a chance to hit the exits before the next leg lower wipes out the lows at 1970 – then heads substantially lower.

Finally marking the near term highs in USD, Gold will hold up ( perhaps a few dollars lower ) before making its next leg higher as safety is “oh so quietly” sought.

The Japanese Yen has long since made its medium term low, and has been consistently gaining strength for weeks now, as commodity currencies continue to get absolutely smashed. AUD/JPY ( remember my most profitable trade idea moving into 2015 ?) as well NZD/JPY and CAD/JPY now down over 1000 pips from their highs.

The sideways action in equities is almost complete, and it should only be a couple more days until we see reversal “again” – this time being the last before the established “downtrend in risk” continues thru February / March.

I’m not trading much these days and as boring as it may appear, sticking with the same medium term plan of “short USD” and “long JPY” ( via everything “other than USD/JPY in itself ) continues to make the most sense.

“Buy and hold” for anyone with “bullish intent” will soon prove to be a misstep.

 

 

Baked In The Cake – ECB Plans A Joke

Forex Kong 4 Comments

So I guess you expected that markets would just “rip for the sky” on news of The ECB finally pulling the trigger eh? Wrong.

SP 500 and “risk in general” rejected at the suggested area around 2050 as……this has been priced in for ages. Draghi taking his turn “pissing into the wind” for the final attempt – as market fundamentals begin to steam roll Central Bank efforts.

We all know QE doesn’t work…and if you ask me…..if looks like “the market” is starting to get it as well.

The Canadian Stock Exchange $TSX has also bounced to the downward sloping trend line , where I expect it to be rejected and begin the next leg “considerably lower”.

And just a quick note to “any and all of you readers” still convinced that The Central Banks have your back………………..

Just keep your head buried in the sand while they print you into poverty.

You’ll figure it out eventually..

Banking Profits – Long Yen Vs Commods

Forex Kong 12 Comments

I’m starting off the new year with a bang, banking just over 900 pips total in short trades via AUD/JPY, NZD/JPY as well CAD/JPY.

These pairs have fallen fast ‘n furious with the recent move towards “risk aversion” and there is never a better time to take money off the table than “when there is money on the table”!.

We’ve discussed the correlation of a stronger Yen and weaker Commodity currencies here time and time again – so these pairs ( being a no brainer ) provide the biggest bang for yer buck in “straight up” pitting the weakest against the strongest.

I will be planning to re enter these pairs in coming days, as they “may” take a reasonable bounce before continuing on their way down.

Right Side Of The Trade – Patience Still Required

Forex Kong 2 Comments

Short of the obvious / continued and “awesome” moves higher in JPY ( and much lower moves in the commodity pairs vs JPY ) the currency market seems to have “stalled”.

We’ve long since come to understand the move towards risk aversion would bring strength to JPY and weakness to the commods, but had recently factored / considered that “USD as well” would make its move lower as equities sold off.

The cross winds of “unwinding The U.S Carry trade” continue to keep USD elevated, as all those U.S Dollars borrowed on the cheap – continue to flood back.

Good luck to intra day traders as suggested some time ago as…..100 + pip swings and incredible volatility in the equity markets make this 100% impossible.

Gold and Silver are most certainly finding a footing ( alongside JPY ) as “the safety trade” looks to gain further ground.

Incredibly ( as it’s always been my assumption that U.S Equities are “the last to fall” ) The U.S Dollar has traded sideways along with EUR/USD, GBP/USD a good 5 days now so…perhaps in this instance we’ll see USD bringing up the rear.

Patience is needed as always……even when you find yourself on the right side of the trade.

I continue to hold long JPY vs AUD, NZD and CAD, with starter entries short USD vs EUR, GBP and MXN – also looking to USD/CHF and even a stab at USD/CAD once we see some further confirmation.

Canadian Stocks – Look Out Below – Risk Off

Forex Kong 7 Comments

The continued fall in oil, and continued move towards “risk aversion” is reeking havoc on The Canadian Stock Exchanges.

The “TSX” – The Toronto Stock Exchange looks something like this:

TSX_2015

TSX_2015

Safety can still be found in gold and silver related names as these companies will benefit from the “further move towards risk aversion” with the metals and miners “finally making their move”, but short of that – Canada along with several other “commodity related” countries is gonna get wacked along side risk in general.

As we now enter U.S earnings season, I imagine the vast number of companies “missing” and/or providing sizable reduced earnings forecasts will contribute even further, coupled with the fact that Central Banks are now pretty much out of the picture.

Perhaps we’ll finally see what these markets will do – when left to survive on their own.

Wait….that’s funny – markets left to survive on their own?? That amounts to a whole lot of arrows on charts…..pointing down.

 

 

Real Unemployment More Like – 18%

Forex Kong 2 Comments

252K “new jobs” added “this month” ( primarily bus boys, servers and part-time workers )  with 294K new additions to the unemployment lines “this week”.

I marvel at the math…and the American vision that “things are improving”.

252k new jobs added this month…..with aprox 1.2 million “new additions” to the unemployment roll. Please…..help me understand how this can possibly be seen as anything other than “horrific”.

Seriously….someone with some “shred of sanity” I implore you….explain this to us.

252k “new” jobs paying close to ( if not under ) minimum wage, while 1.2 million people jump on the “unemployment benefits wagon” this month alone.

Now that’s what I call economic growth.

That’s what I call “recovery”.

Gag.Puke.Choke. Sputter.Split.

Let’s see how things look near days end as USD and the “currency world in general” just isn’t buying it.

Holding steady….and waiting for the “swing high” in USD.

Watching Oil, USD – Earnings To Suck

Forex Kong 8 Comments

Watching oil here – now exhibiting some “bottoming characteristics”. Still very early ( as thus far only the 1 minute, 5 minute and 15 minute charts have reversed ) but…….

What do we know about “the price of oil” and the “value of USD”?

Oil is priced in U.S Dollars right? A low in the price of oil could very well mark the high in USD no?

Both Gold and Silver ( including the miners ) look to have found some support these past days, regardless of USD poking a touch higher.

Looking at oil related currencies such as The Canadian Dollar as well The Mexican Peso we can also see USD weakness.

A flood of money coming into commodities in general would clearly suggest USD topping out “medium term”.

The SP 500 has now retraced a full 50% of the recent plunge ( now at 2035 ) so even a touch higher at 2051 would provide for a low risk entry – short.

Earnings season is gonna “suck” as there is not a U.S based multi-national company on the planet that can “honestly” report that they’ve increased bottom line profits in the face of the rising dollar, let alone the number of energy related companies that just got their asses kicked by falling oil.

It’s impossible.

 

Singapore Survives – Global Growth Tanks

Forex Kong 2 Comments

Readers / visitors from Singapore have now overtaken the total number of visitors to Forex Kong from all North American countries combined.

A recent study has found that the number of households with investable assets of US$1 million (S$1.26 million) or more rose 14 per cent to 188,000 last year. That means 17.1 per cent of households – or one in six – are millionaires ( this data may be a full year old ).

Wow.

That’s like sitting down for dinner at your local McDonald’s and knowing that there is “at least one millionaire” sitting at the 4 or 5 tables surrounding you – although I don’t imagine many of them are “actually sitting at McDonald’s”.

Some other interesting facts about Singapore:

  • Singapore is the fourth-largest foreign currency trading center in the world, according to the Bank for International Settlements.
  • Singapore is the fourth-strongest financial market in the world. The World Economic Forum praised the country for its high degree of financial stability, bank efficiency, and commercial access to capital.
  • Singapore could overtake Switzerland as the world’s largest offshore wealth hub by 2020, according to WealthInsight, a London-based research firm.
  • There are more than 500 players in the asset management industry in Singapore, with total assets under management of more than S$1.4 trillion.

Obviously something must be going right for these “astute investors” and I’m very pleased to see their numbers growing.

Perhaps a couple of them may have managed to “push through the my sarcasm and disdain” – and taken precaution to protect their profits / exit the markets some months ago – I dunno but……I’ll be hard pressed to hear of any “American Bulls” that have survived January thus far. Impossible.

I expect a “slight bounce” here, providing a last chance opportunity to re-evaluate your current holdings before the real fun begins. As per charts/banter going back some weeks. Global risk has clearly topped.

I’ve seen plenty of waterfalls in my days ( those of  Costa Rica the finest ) but have visions of “this one” topping all.

A shout out to Singapore and good luck to all!

 

 

 

 

 

 

I Could Lose 10K – USD Shorts Start Today

Forex Kong 22 Comments

One of the most entertaining parts about “financial blogging” truly lies within the “immediacy of it all” as….unlike “posting a recipe” (where people may choose to “give it a try or not”) here in the financial space – real money is at stake.

Traders on both sides of the fence get an opportunity to “compare as they dare” when fellows like myself ( and all you other guys with the balls to do so ) put it out there for all. You write it down…you make your move, and regardless of whether you fail or succeed – people really get a charge out of “watching you burn” – or “watching you earn”.

Oddly….or perhaps not so ( considering humanity in general ) I think the majority of people (as sick as it is ) rather “enjoy” watching others fail. Perhaps it makes then feel better about themselves – I can’t say for certain but…..I guess if I lived in a lean-to behind my grandmother’s trailer park and ate spam each day for breakfast, maybe I wouldn’t “mind so much” hearing that the guy eating lobster on a Caribbean beach took a hit or two.

I dunno….its small, it’s petty but for the most part – sounds pretty “human” to me.

In any case….by close today I will initiate the “first of three” planned trades ( as I always spread my total allocation to a given trade idea over 3 separate entries – over time ) short The U.S Dollar against a number of other currencies.

I assume the trade will pan out late January / early February ( or perhaps earlier ) with a total allocation / risk of 10K – spread over 3 separate entries over the coming days / weeks.

I have fully factored that the entire 10k could be lost….so for “lovers and haters alike” I invite you to follow along and comment ( uncensored ).

You can see what kind of “gorilla I can be” so……………….let’s see how “human” you can be.

Good luck to all.