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There is a very important detail of Draghi’s proposed “ECB QE Program” that looks to have escaped the larger headline news  (suggesting that Draghi’s program will provide the next boost for markets and ultimately save The E.U Zone from disaster ).

Draghi suggested last week that The ECB “will not be buying securities if” their yields are below the ECB’s deposit rate of minus 0.2 percent.

Well…….with Eighty-four of the 346 securities in the Bloomberg Eurozone Sovereign Bond Index with rates below zero ( including all German bonds due in six years or less ) it remains to be seen just “what will be bought” and in what kind of amount.

We’ve all seen Draghi “talk the talk” so many times in the past, so again the question comes to mind if “this time”he can “or will” walk the walk.

Imagine the set up for markets so widely expecting the ECB QE Program to “somehow” put a shelf under the economic destruction currently sweeping Europe…only to realize that once again Draghi pulls the carpet out from under, offering far less than what was originally proposed.

It would not surprise me in the least to see the final bottom to be put in on The EURO triggered by a less than expected result from The ECB ‘s “supposed” QE Bazooka.

We’ll find out here on Monday / Tuesday as the program is expected to begin.

I’m pleased to see that the mainstream media is finally catching up – with these headlines “now” spattered across the news at Google. Are you finally coming to understand the effects of a strong U.S Dollar? Or are you just thrilled that you can power your generator an extra day or two on the cheap?

Strong_USD_Feb_News_Forex_Kong

As we’ve discussed here earlier – a stronger U.S Dollar is The Fed’s worst nightmare ( as debts payable in USD skyrocket out of control ) and is killing U.S Exports.

The “less than expected GDP” print here this morning isn’t even the half of it, as these numbers are goosed along with “all” U.S Data in a sad attempt to mask what’s really going on. The near term “sideways trading” in USD has done little to excite traders, as with the current gong show playing in The E.U / Greece.

USD has “appeared” to be the “best of the worst” with all paper currencies essentially losing value at breakneck speed.

With commodities stretched about as low as one can imagine, and USD now stretched about as far as “America can bear” it’s really only a matter of time ( a short time ) before the elastic band snaps back in “epic fashion”.

You won’t get out in time. You’ll hang on until you are swimming in a sea of red, looking for a lifeline unless you keep your eyes peeled and have the courage to “sell” when everyone else on the planet is buying.

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

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

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

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

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

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.