Oh my……….
It would appear that the recent “tweaks” to the Kongdictator have been…….AWESOME!
EVERY SINGLE TRADE SUGGESTED / ENTERED VIA MY SHORT TERM TECH IS CURRENTLY “WELL” IN PROFIT.
These things can turn on a dime fine…..( although forex wise – not so much )…but that ‘s 8/8 as per the “real-time updates” at the beginning of last week.
Read ’em n weep sucka’s ( for those following from Forex Factory).
Tequila time for Kong!
I can’t help but say….I’m a little choked.
We’ve been over a number of key points here, when considering “taking a trade”, and now turn our focus to “making an investment” as essentially – a completely separate topic.
Anyone care to hazard a guess, at one of the most important factors affecting each?
Hey! You got it!
Timing! Timing! Timing!
You can have all the fundamental knowledge in the world, as well possess the “ultimate technical know how” yet, if your timing sucks……………….sorry to say – you are sh/#&t outta luck.
Anyone making an “investment decision” without (at least ) “some” understanding or awareness of the “possible downside or risk” might as well just sign their account over to the brokerage and wait for the call – letting you know your account has been reduced to zero!
Have you lost your mind? With absolutely “no plan” for the “downside” what you are essentially saying to me is ” I bought a stock, and expect it to go up, up , up , and continue going up forever”.
Or at least….that’s what your broker told you, and believe me – he won’t be calling you to let you know anything otherwise.
Again – have you lost your mind?
This “isn’t investing” as clearly – the landscape has changed. Your broker and your bank are your enemy, and will stop at nothing to see you and your hard-earned nest egg “parted” as readily as possible.
This is 2013 people! You have the entire planet’s libraries at the push of a button!
If you can’t make an investment decision based in your “own knowledge” of a given asset’s performance over time ( and in turn “some idea” of its peaks and valleys / areas of support and resistance) then WTF?
How can you see an area to take profits? How would you know an area to “cut your losses” should things go “that far” against you?
How can you honestly say you’ve got “any idea at all” as to what you’re even involved with – short of putting your entire “nest egg/investment dollars etc ” into the hands of an institution whose soul goal is to extract it from you?
GRRRRRRRRRRR………..
More on timing next…………
I’ve spent the past week “out in the trenches”. Pulling back the curtain “just a bit” and hopefully providing short-term traders with a couple of ideas – and the chance to make a quick buck.
For the most part this area of forex trading is extremely difficult, time-consuming , stressful , annoying and for those with little experience – truly a fool’s game.
What I’d like to do now, is take a complete 180 degree turn and take a look at forex strategies and concepts geared more so for the investor.
Let me throw out a quick scenario.
What if I told you that your Canadian dollar exchange to Mexican Pesos is 12.79 ( simply consider a dollar being worth approx 1.27 here ) Not bad eh?
Ok…..so now what if I told you that the “base savings rate” at any of the excellent banks here in Mexico was 3.75% – You starting to get the message?
So what if you could go to the bank in Canada tomorrow and get a loan for 100k ( at near 0% ) Then take “said loan” and convert it to Pesos – and put it in a bank account at 3.75% – with absolutely no risk.
Boom! Forex as investment.
It’s what your local banks are doing hand over fist. It’s called the “Carry Trade”.
It’s not “new” it’s not “sketchy” – It’s a major , MAJOR driver of profit for banks across the planet.
More over the weekend……
written by F Kong
I’ve got my eye on the “Kiwi” regardless of which pair, for the pure reason that it looks severely overbought.
Overbought – A situation in which the demand for a certain asset unjustifiably pushes the price of an underlying asset to levels that do not support the fundamentals.
Now, The Bank of New Zealand has recently made mention of a possible “hike” in interest rates (which has most certainly been the tail wind behind the latest advance) but the Kiwi still represents a “risk related currency” and is subject to large moves when appetite for risk wanes.
Have a look at the daily chart and see how “84.00” looks like a solid area of resistance.
NZD_USD_SEPT_2013_Forex_Kong
Now, “86.00” doesn’t look completely out of the question, but with the usual “staggered mutli-order” approach, I’m seeing the risk vs reward looking pretty good for a short up here.
Another full day’s downward movement will likely trip the Kongdicator ( as I am free wheeling here on this one so far ) so we’ll keep our eyes peeled for that.
Kong….gone.
He he he……gotcha.
Let’s get something straight here. When I make the suggestion of “a top” or (as I have been since April) a “topping process” – I don’t mean the world is gonna come crashing down around you like in some bullshit movie out of Hollywood.
The financial “powers that be” already got their wake up call in 2008 with Lehman Bros etc and it’s pretty much a given that we won’t be seeing something like that happening again anytime soon.
There is no “doomsday prophecy” here, no “go buy guns n ammo” cuz they’re coming for your gold, no “end of the world scenario’s” no. This stuff rolls out in “real time” and navigating the peaks n valley’s these days just gets tougher and tougher, as the situation gets more desperate.
We know the “coordinated Central Bank effort” is flooding the planet with cash, and we know the tensions between East and West are intensifying. We know the world’s largest consumer economy is still struggling to get back on its feet ( if ever ) and we also know that the large majority of people involved with investment / finance are hell-bent on making it so.
Global appetite for risk comes “on” and it comes “off”. Simple as that. Identifying these times can be extremely profitable for those who choose to fight it out in the trenches.
If you actually think you can weather “buy and hold” when a mere 10% correction in U.S equities has the potential to wipe your account to zero then fine! Do it! Buy all you can tomorrow – and disregard concern for the “global appetite for risk”.
I call it like I see it, and I see a lot.
I’m not particularly “optimistic” about the next few years but that doesn’t mean I think the world is gonna end.
You choose to trade, or you choose to invest. DON’T CONFUSE THE TWO.
Sorry about the misleading headline although – seriously………it’s all I can do these days not to “go completely mad” writing about this day after day. It “may” happen again but at least just this once….give ol Kong a break. (I bet you read the damn thing as fast you could get it open).
Forgive me.
We’ve ok here………………………..at least for Monday.
written by F Kong
Daily market commentary gets a little dry for me.
With Wednesday’s Fed announcement looming, it makes little sense delving into too much else – short of suggesting patience, patience, and oh yes…….a little more patience.
The news of Larry Summers dropping out of the running for the “New Fed Chairman” has hit news headlines across the globe, yet I’ll bet you 50 bucks you had absolutely no clue “who he was” – or would have cared much anyways. Me neither frankly.
When we step back and consider that Ben Bernanke has pretty much filled the role as ” the most important and influential man on planet Earth” for some time now – would you want that job?
Kong appointed Chairman of the U.S Federal Reserve – could you even imagine?
Forex trading is stressful enough at times, and I’m always up for a new challenge – but could you actually imagine walking into the office on your first day as Fed Chairman and just picking up the ball and running with it? No thanks.
As it stands, the word on the street is that this “Janet Yellen” is all for the printing presses ( surprise , surprise right?) so obviously she fit’s the bill quite nicely. After all – why on Earth would the Fed ever jeopardize loosing their biggest client ( the U.S Government) to some “half cocked Obama boy” like Summers. NEVER GONNA HAPPEN.
This gal is deep , deep , deep in someone else’s pockets – and I don’t mean that in a good way ( could that be in a good way? ).
Personally, I’m not particularly “thrilled” with things being on hold here any longer. The gap in USD action has provided a couple of scalp opportunities but has also done a great job of further “blurring” further USD direction. Most charts / asset classes I follow suggest “some kind of USD bounce” but this tempered with the fundamental fact that Yellen is 100% on board with money printing.
The market’s reaction on Wednesday is really only a small part of the puzzle, as debt ceiling / default issues come next.
When does it end?
It doesn’t.
I’ve touched on this a couple of times before.
When trading ahead of what we in the biz refer to as a “risk event”, you’ve seriously got to question “why” you’d look to take on any additional risk in “getting it wrong”. The fact of the matter is – you’ve got absolutely no clue how it’s going to pan out, and you’ve got no good reason to “trade it” if not looking at it as a complete and total “roll of the dice”. You want to gamble – fine. Take a small percentage of your account, have fun with it, take your chances and hope for the best.
That’s “NOT” how I roll.
This Wednesday’s Fed meeting, and expected announcement of reduced stimulus, is undoubtedly the most highly anticipated and potentially dangerous “risk event” we will have seen in markets in at least the last couple years.
You cannot afford to be on the wrong side of it.
Reading/researching over the weekend , I’ve come to the conclusion that the bond market has clearly priced in the news, but that U.S equities haven’t moved a muscle, and that forex markets are hanging in wait.
I will look for any “and every” opportunity over the next 72 hours to eliminate exposure, take profits, reduce positions, sell into strength etc in order to “ideally” be as close to 100% cash for Wednesday afternoon’s announcement.
This is trading not “fortune-telling”, and I don’t give a rat’s ass which way the market decides to go “post Bernanke” – only that I’m going along with it.
We’ve got fron Sunday night til Wednesday afternoon. Raise cash – don’t be a hero.
In the history of my career, never in my life have I seen a week as flat, and as dull as this one.
If you’ve survived great, and if you’ve managed to “squeeze” a little money out of it – even better. Putting it in perspective can help you cope. “Knowing” the week’s trade volume was so slow and “knowing” it’s pretty irregular has one better manage their expectations for profit. Sitting there staring at it minute by minute questioning “what am I doing wrong” doesn’t do a guy any good. It’s not your fault. It’s one of the dynamics of trading forex that we just have to accept. A dud. Clearly – the week that “wasn’t”.
It’s obvious to me now that the Fed’s impending decision to “taper or not to taper” later next week, has the entire planet’s investment community sitting on their hands. As much as I truly don’t believe any “actual tapering” will take place ( as it’s will only manifest as an accounting entry of a “few less zero’s” for a couple of weeks/months ) I have come to realize that an “announcement of tapering” (however small and meaningless) may certainly be in the cards.
If it’s 10 billion or 15 billion again….the number is meaningless. The puppet strings moving behind the curtain will continue to pull markets as they see fit. If we do get a significant “sell off in risk” ( as emerging markets will stumble on the suggestion of less stimulus) it may only be further manipulation to “further justify” more QE down the road. If tapering “isn’t” announced, I would have to assume markets to perceive trouble in the U.S to be “worse” than previously thought ( as QE “full on” is still needed ) which may also contribute to a selling event.
Either way, it’s a very good idea for any trader to “buckle up” , manage their risk , and not get caught leaning to heavy in either direction.
I currently hold “no position” in USD, and have previously held long JPY’s as well a couple “stragglers” short commods ( AUD and NZD) that have not moved more than a hair for the entire week. The “insanity trade” finishes the week 65 pips in profit and holding.
written by F Kong
Once again we find ourselves here on Thursday morning, awaiting the release of “the unemployment claims” data out of the U.S. I know the number will be dismal, there’s no question of that………only the question of how markets will interpret the news.
If history is any record, it really doesn’t seem to matter how many “more people” get in line to file unemployment claims each week as U.S equities continue on their grind.
I would “like to think” – this time will be different.
A disappointing number “should” propel USD upwards and U.S equities down but of course….that’s what “should” happen.
Overnight’s “risk off trade” gathered some traction with JPY moving higher, and a brisk sell off of AUD – as expected.
I am 100% out of USD related pairs as of yesterday / last night, and well in profit on the “insanity trade”.
We’ll let the dust settle here this morning….and continue forward with a “now USD long bias” starting to materialize across several currency pairs.
More trades….later.
I’m watching the Nikkei ( The Japanese Equities Index ) for “any” sign of reversal considering that it “has” pushed through the overhead downsloping trend line that has been so well-respected in the past.
In fact…..this is more like a “20 year” down trend so….you can understand my current skepticism.
https://forexkong.com/2013/05/25/nikkei-20-year-chart-rejection/
Considering the current “headwinds” I find it very hard to believe that “now is the time” for a massive breakout / reversal in an area of resistance / trend going back some 20 years.
Otherwise, Im looking to see the correlation and movements underway in the precious metals and USD, as well keeping my eye on those longer term U.S Treasury Bonds.
We’re pretty much at a point where a number of these longer term correlations need to either “stay the course” or “make their move” – with “tapering or no tapering” the primary driver.
With Japan pretty much in the driver’s seat “liquidity wise” a keen eye on the Nikkei and its inverse relationship with the Yen will provide the first signs of reversal in risk.
I’ve taken profits on all “short USD” pairs, but will likely set up orders “above or below” current action in several pairs and look to catch further movement with momentum. I’m also still holding a couple small trades ( in the weeds ) long JPY – but have little concern as these will only be added to / kept.
written by F Kong