intermarket analysis

Navigating The Turn – 2 Years Without Returns?

Forex Kong 5 Comments

Considering that markets have more or less “skyrocketed higher” for such an extended period of time that the majority of investors / traders are likely convinced that this is just the “new normal” ( I can’t stand that expression by the way – as it reeks of complacency and “idleness”) and that dips should be bought, on and on, no worries, The Fed has your back etc etc…

It’s easy to understand, as even heightened geopolitical concerns continue to take the back seat, along side lowered global GDP forecasts, poor data out of Japan etc..It could easily appear to the casual observer that “nothing” can get in the way of markets just moving higher, and even higher.

But what happens when the turn is made? I mean…..we all have to appreciate that “nothing goes up forever” right? Historically speaking we can see the typical “boom and bust cycle” usually manifests in a “5 year up and 2 year down” type scenario – and we’re well past the 5 year up mark.

As investors / traders it would completely foolish to “simply ignore” these longer term patterns as I can imagine most of you…..have likely been caught doing that a time or two before right?

Tech / boom / crash 2000 maybe? Credit / housing / crash of 2007 perhaps?

I find it highly unlikely that many of you successfully navigated these “significant turns” to continue generating profits during the 2 year period following these incredible crashes in risk.

Take a look:

Market_Tops_Forex_Kong

Market_Tops_Forex_Kong

Market tops can be seen almost “to the letter” on a 7 year cycle with 5 years up….and 2 years down, with us sitting “right at the max” of this “extended 5 year move higher” based solely in the “money printing efforts” made by Central Banks.

The idea of going through this again ( as why would this time be any different? ) can’t possibly be appealing. Considering where you are in life, and the prospects of a “full 2 years” with your portfolio drawndown considerably – not to mention the mental and psychological end of things – who needs the grief?

You’ve come this far with your investing / trading decisions while the “good times have been good” so…..why not extend the same effort when ” the good times are bad”?

Suggestions to follow….

 

BRICS Nations – Bypass Washington With New Bank

Forex Kong 1 Comment

I’m sure you are familiar with the “BRICS” nations ( being Brazil, Russia, India, China and South Africa ) right?

Well…..disatisfied with The United States “overwhelming influence on global finance” these fellows ( accounting for almost half the world’s population and about a fifth of global economic output ) have recently put their heads together ( and lots of money ) and started “their own” development bank.

The New Development Bank (NDB), formerly referred to as the BRICS Development Bank,is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa) as an alternative to the existing World Bank and International Monetary Fund.

The 100 billion dollar bank ( complete with another $100 billion currency reserves pool ) is aimed at funding infrastructure projects in developing nations, and will be based in Shanghai, providing these nations with access to funding “outside” the usual channels of World Bank or IMF funding.

The genie is clearly out of the bottle here, as a growing number of extremely powerful and influential nations continue to move further and further away from Washington’s insane monetary policy and stranglehold on global financial movements.

You wanna impose more sanctions on Russia? You want to keep printing U.S Dollars like toilet paper? Have at it Obama – knock yourself out.

A major game changer here as The NDB has finally arrived.

more here: http://thediplomat.com/2014/07/3-reasons-the-brics-new-development-bank-matters/

 

Forex, Stocks And Gold – Trading The Week Ahead

Forex Kong Got something to say?

The updates trade table offers little in the way of “new trades” here as of this morning, as last Thursday’s “drop” and in turn Friday’s “pop” has left the higher time frames unchanged, and more or less “yellowed the waters” shorter term.

Weekly_Forex_Overview_Sunday_July_20_2014

Weekly_Forex_Overview_Sunday_July_20_2014

 

What may be of particular interest to you this week will be USD, and “yes once again” the debate as to which way she’ll go ( with conviction and follow through ) should we see this distribution environment “flip” to something with a little more trend / conviction either way.

We’ve got JPY and its related pairs under the thumb, with eyes on Nikkei if considering to “beef up / add ” to any positions under our current framework. Ideally we’ll want to see JPY “breakout” from it’s ascending triangle moving higher…as “appetite for risk” moves inversely lower.

NZD in particular remains weak here this morning, but Thursday brings with it “another possible rate hike” out of New Zealand. It’s my thinking perhaps they “hold off” on an additional hike here and perhaps markets have already suspected as much but….that’s just speculation.

Still no aggressive trades in EUR, GBP vs USD as I want to give it another day or so to see if  USD turns lower here as I expect it to.

A weak open here as Japan was weak overnight as well EU stocks so…..it remains to be seen of “the machine’s that be” will again step in at the U.S open and work their “usual magic” to keep this thing flying a little longer.

Comments from both The BIS ( Bank of International Settlements) as well the IMF “AND” even The Fed suggesting that it’s getting a little out of hand here – with public perception and the underlying fundamentals now clearly out of touch with reality.

Gold miners entries as of a few days ago remain strong, and the final “short SP 500” added at 1956.00 ( via Sept 191 puts ) appears to be holding its own.

 

Want to see what other irons we’ve got in the fire? Come join us in the members area for weekly reports, daily strategies, real-time chat and trading of “anything and everything under the sun” at: www.forexkong.net

U.S Interests In Ukraine – A Brilliant Synopsis

Forex Kong 13 Comments

Cut and past from a fellow named Mike Whitney ( thank you very much Mike ) who can be reached at: [email protected] as I could not have possibly explained it better myself.

In Ukraine, the US is using a divide and conquer strategy to pit the EU against trading partner Moscow.

The State Department and CIA helped to topple Ukraine’s elected President Viktor Yanukovych and install a US stooge in Kiev who was ordered to cut off the flow of Russian gas to the EU and lure Putin into a protracted guerilla war in Ukraine.

The bigwigs in Washington figured that, with some provocation, Putin would react the same way he did when Georgia invaded South Ossetia in 2006. But, so far, Putin has resisted the temptation to get involved which is why new puppet president Petro Poroshenko has gone all “Jackie Chan” and stepped up the provocations by pummeling east Ukraine mercilessly. It’s just a way of goading Putin into sending in the tanks.

But here’s the odd part: Washington doesn’t have a back-up plan. It’s obvious by the way Poroshenko keeps doing the same thing over and over again expecting a different result. That demonstrates that there’s no Plan B. Either Poroshenko lures Putin across the border and into the conflict, or the neocon plan falls apart, which it will if they can’t demonize Putin as a “dangerous aggressor” who can’t be trusted as a business partner.

So all Putin has to do is sit-tight and he wins, mainly because the EU needs Moscow’s gas. If energy supplies are terminated or drastically reduced, prices will rise, the EU will slide back into recession, and Washington will take the blame. So Washington has a very small window to draw Putin into the fray, which is why we should expect another false flag incident on a much larger scale than the fire in Odessa. Washington is going to have to do something really big and make it look like it was Moscow’s doing. Otherwise, their pivot plan is going to hit a brick wall.

“Ukraine’s Parliament adopted .. a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months.

Boy, you got to hand it to the Obama throng. They really know how to pick their coup-leaders, don’t they? These puppets have only been in office for a couple months and they’re already giving away the farm.

And, such a deal! US corporations will be able to buy up nearly half of a pipeline that moves 60 percent of the gas that flows from Russia to Europe. That’s what you call a tollbooth, my friend; and US companies will be in just the right spot to gouge Moscow for every drop of natural gas that transits those pipelines. And gouge they will too, you can bet on it.

Is that why the State Department cooked up this loony putsch, so their fatcat, freeloading friends could rake in more dough?

This also explains why the Obama crowd is trying to torpedo Russia’s other big pipeline project called Southstream. Southstream is a good deal for Europe and Russia.

On the one hand, it would greatly enhance the EU’s energy security, and on the other, it will provide needed revenues for Russia so they can continue to modernize, upgrade their dilapidated infrastructure, and improve standards of living. But “the proposed pipeline (which) would snake about 2,400 kilometers, or roughly 1,500 miles, from southern Russia via the Black Sea to Bulgaria, Serbia, Hungary and ultimately Austria. (and) could handle about 60 billion cubic meters of natural gas a year, enough to allow Russian exports to Europe to largely bypass Ukraine” (New York Times) The proposed pipeline further undermines Washington’s pivot strategy, so Obama, the State Department and powerful US senators (Ron Johnson, John McCain, and Chris Murphy) are doing everything in their power to torpedo the project.

“What gives Vladimir Putin his power and control is his oil and gas reserves and West and Eastern Europe’s dependence on them,” Senator Johnson said in an interview. “We need to break up his stranglehold on energy supplies. We need to bust up that monopoly.” (New York Times)

What a bunch of baloney. Putin doesn’t have a monopoly on gas. Russia only provides 30 percent of the gas the EU uses every year. And Putin isn’t blackmailing anyone either. Countries in the EU can either buy Russian gas or not buy it. It’s up to them. No one has a gun to their heads. And Gazprom’s prices are competitive too, sometimes well-below market rates which has been the case for Ukraine for years, until crackpot politicians started sticking their thumb in Putin’s eye at every opportunity; until they decided that that they didn’t have to pay their bills anymore because, well, because Washington told them not to pay their bills. That’s why.

Ukraine is in the mess it’s in today for one reason, because they decided to follow Washington’s advice and shoot themselves in both feet. Their leaders thought that was a good idea. So now the country is broken, penniless and riven by social unrest. Regrettably, there’s no cure for stupidity.

The neocon geniuses apparently believe that if they sabotage Southstream and nail down 49 percent ownership of Ukraine’s pipeline infrastructure, then the vast majority of Russian gas will have to flow through Ukrainian pipelines. They think that this will give them greater control over Moscow. But there’s a glitch to this plan which analyst Jeffrey Mankoff pointed out in an article titled “Can Ukraine Use Its Gas Pipelines to Threaten Russia?”. Here’s what he said:

“The biggest problem with this approach is a cut in gas supplies creates real risks for the European economy… In fact, Kyiv’s efforts to siphon off Russian gas destined to Europe to offset the impact of a Russian cutoff in January 2009 provide a window onto why manipulating gas supplies is a risky strategy for Ukraine. Moscow responded to the siphoning by halting all gas sales through Ukraine for a couple of weeks, leaving much of eastern and southern Europe literally out in the cold. European leaders reacted angrily, blaming both Moscow and Kyiv for the disruption and demanding that they sort out their problems. While the EU response would likely be somewhat more sympathetic to Ukraine today, Kyiv’s very vulnerability and need for outside financial support makes incurring European anger by manipulating gas supplies very risky.

The funny thing about gas is that, when you stop paying the bills, they turn the heat off. Is that hard to understand?

So, yes, the State Department crystal-gazers and their corporate-racketeer friends might think they have Putin by the shorthairs by buying up Ukraine’s pipelines, but the guy who owns the gas (Gazprom) is still in the drivers seat. And he’s going to do what’s in the best interests of himself and his shareholders. Someone should explain to John Kerry that that’s just how capitalism works.

Washington’s policy in Ukraine is such a mess, it really makes one wonder about the competence of the people who come up with these wacko ideas. Did the brainiacs who concocted this plan really think they’d be able to set up camp between two major trading partners, turn off the gas, reduce a vital transit country into an Iraq-type basketcase, and start calling the shots for everyone in the region?

It’s crazy.

Europe and Russia are a perfect fit. Europe needs gas to heat its homes and run its machinery. Russia has gas to sell and needs the money to strengthen its economy. It’s a win-win situation. What Europe and Russia don’t need is the United States. In fact, the US is the problem. As long as US meddling persists, there’s going to be social unrest, division, and war. It’s that simple. So the goal should be to undermine Washington’s ability to conduct these destabilizing operations and force US policymakers to mind their own freaking business. That means there should be a concerted effort to abandon the dollar, ditch US Treasuries, jettison the petrodollar system, and force the US to become a responsible citizen that complies with International law.

This in an absolutely “perfect synopsis” of events currently unfolding in Ukraine….and you’ll have to appreciate the irony with respect to the “false flag” and the mysterious “Malaysian Jetliner now “downed” in Eastern Ukraine”…….a coincidence? A chance event?

I hardly think so.

Go Obama go – you moron!

U.S Debt – A Ton Of Debt, A Pound Of Growth

Forex Kong 4 Comments

The following article and series of charts / graphs should scare the living day lights out of you, if you don’t already have a general idea how artifically low interest rates and the “U.S debt situation” fit together.

http://www.zerohedge.com/news/2014-07-15/why-status-quo-unsustainable-interest-and-debt-what-yellen-wont-tell-you

Shocking when you consider that net interest costs will double in five years, and triple in eight.

So…….The Fed is gonna hold rates at zero forever then?

Impossible.

The Federal Reserve’s Impossible Equation: When Math Meets Reality

Let’s strip away the Fed’s fancy rhetoric and look at the cold, hard numbers. When interest costs are set to double within five years and triple within eight, we’re not talking about some distant economic theory – we’re staring down the barrel of fiscal Armageddon. The Federal Reserve has painted itself into a corner so tight that every move forward accelerates the collapse they’re desperately trying to avoid.

The Zero-Rate Trap That’s Swallowing America

Here’s what Yellen and Powell don’t want you to understand: artificially suppressed interest rates aren’t just an economic policy tool – they’re life support for a terminally ill financial system. Every day rates stay near zero, the debt monster grows larger and hungrier. The government has become addicted to cheap money like a junkie needs his next fix.

But here’s the kicker – they can’t keep rates at zero forever without destroying the dollar’s credibility entirely. Foreign central banks are already questioning whether holding U.S. Treasuries makes sense when the purchasing power gets inflated away year after year. We’re witnessing the early stages of what will become a full-scale dollar collapse if this trajectory continues.

The Mathematics of Financial Suicide

Do the math yourself. If net interest costs double in five years while the Fed maintains their “accommodative” stance, where exactly does that money come from? The only options are: print more money (hello hyperinflation), raise taxes to economically crushing levels, or default. There’s no fourth option hiding behind some academic theory.

The debt-to-GDP ratio has already crossed into territory that historically signals the end game for empires. When servicing debt becomes the primary function of government rather than governing, you’re looking at systemic breakdown. The Fed knows this. Wall Street knows this. The question is whether retail investors and everyday Americans will figure it out before their savings get vaporized.

Currency Wars and the Coming Reset

While the Fed plays pretend with interest rates, other nations are preparing for the post-dollar world. China’s accumulating gold at record pace. Russia’s building alternative payment systems. Even traditional U.S. allies are quietly diversifying away from dollar reserves.

This isn’t conspiracy theory – it’s economic survival. When the world’s reserve currency is being deliberately debased through monetary policy, smart money doesn’t sit around waiting for permission to protect itself. The signs are everywhere if you know where to look, from precious metals accumulation to bilateral trade agreements that bypass the dollar entirely.

What Happens When the Music Stops

The Fed’s impossible equation has a simple solution – it doesn’t. Something has to give, and it won’t be pretty. Either interest rates eventually rise and crush the government’s ability to service debt, or they keep rates low and watch the dollar lose reserve currency status through inflation and loss of confidence.

Both scenarios end the same way: massive wealth transfer from savers to debtors, from the middle class to the financial elite, from dollar holders to real asset owners. The Fed isn’t trying to solve this problem – they’re trying to manage the controlled demolition of the existing monetary system while protecting their buddies on Wall Street.

The smart money isn’t asking if this system will collapse – they’re positioning for what comes after. Currency crises don’t announce themselves with press releases. They arrive suddenly, violently, and completely reshape the economic landscape overnight. The math is already written on the wall. The only question left is whether you’ll be ready when it becomes undeniable to everyone else.

Yellen Must Get Hawkish – Doves Will Cry

Forex Kong Got something to say?

To garner even the tiniest amount of respect over the next few days….Janey Yellen “must” do something to forewarn markets / prepare investors for the inevitable “unwinding” – coming soon to a theatre near you.

It would be completely irresponsible for Yellen ( at this point ) to continue looking into the camera with those “beady little eyes”, suggesting that interest rates aren’t going up ( much sooner than markets are currently pricing in ) with the continued stance that “no bubbles are seen” and that all is going according to plan.

I believe it’s come to the point now…..where even the “just shut up and buy the dip / The Fed’s got your back crowd” would just as well get the signal here soon…….as they’ve pushed this about as far as “even they” think is possible.

Interest rates are on the rise much faster The Fed cares to make mention of, and this “playing dumb” act has about run it’s course.

I encourage everyone to take “extra special notice” over the next few days as to “what Yellen says” and more importantly “how markets interpret / react” as…..

If The U.S Fed had even the smallest shred of human decency ( which we already know it doesn’t ) now would be the time to “give the market a little heads up”.

The massive positions / time it takes to unwind has this so  ridiculously”one-sided” that without an appropraite amount of time…..you may just see everyone run for the exits all at once.

It’s 100% up to Yellen.

She can make this “somewhat orderly” or she can roll the dice another turn, and have this thing tank later.

That’s what I call a free market baby. That what I call – America!

 

 

 

The Bond Market Tells the Real Story

While Yellen plays theater with her prepared statements, the bond market is screaming the truth. Ten-year yields are climbing faster than The Fed can manufacture excuses, and this divergence between policy rhetoric and market reality is creating the perfect storm. Every basis point rise in yields is another nail in the coffin of this artificial bull run.

The foreign exchange markets are already positioning for what’s coming. Smart money isn’t waiting for Yellen’s permission slip – they’re moving now. The dollar’s recent strength isn’t sustainable when you’re printing money faster than a counterfeiting operation, but the initial flight to “safety” will create some brutal whipsaws before the real USD weakness begins.

Currency Wars Begin When Central Banks Panic

Here’s what nobody wants to discuss: when The Fed finally admits they’ve lost control, every other central bank will scramble to protect their own currencies. The ECB, Bank of Japan, and even the Bank of England will be forced into defensive positions they never wanted to take. This isn’t cooperation – this is survival.

The yen has been getting obliterated, but that’s about to reverse violently when carry trades unwind. The euro looks dead until it doesn’t. These aren’t gradual moves we’re talking about – these are gap openings that will vaporize accounts built on The Fed’s false promises.

The Unwinding Will Be Swift and Merciless

Institutional money managers are sitting on positions so leveraged and so one-sided that any hint of actual Fed hawkishness will trigger a cascade of forced liquidation. They’ve been playing musical chairs with billions in assets, and Yellen is about to shut off the music.

The real question isn’t whether the unwinding happens – it’s whether it happens in an orderly fashion over months, or in a violent deleveraging event over days. Every additional week Yellen delays gives these institutions more time to quietly reduce risk, but it also allows more weak hands to pile in at exactly the wrong moment.

Gold and Real Assets Will Have Their Day

When confidence in central bank omnipotence finally cracks, the flight to real assets will be immediate and decisive. Gold has been consolidating while everyone chases tech stocks and crypto promises, but precious metals always get the last laugh when fiat currency games reach their inevitable conclusion.

This isn’t about predictions or technical analysis – this is about mathematical certainty. You cannot print prosperity indefinitely without consequences. The laws of economics aren’t suggestions, and they don’t care about political timelines or market sentiment.

Position Yourself Before the Crowd Wakes Up

The beauty of markets is that they eventually force truth through all the manipulation and propaganda. Yellen can control the narrative for now, but she cannot control mathematics. Interest rates will normalize whether she wants them to or not, and when they do, the repricing will be spectacular.

Professional traders know this game is ending soon. The rally continues until it doesn’t, and when it stops, it stops hard. The smart money is already hedging their bets and reducing their exposure to Fed-dependent assets.

Watch Yellen’s next few appearances not for what she says, but for what she doesn’t say. Watch the bond market’s reaction more than the stock market’s initial response. Watch currency flows more than headline grabbing equity moves. The real story is being written in the markets that matter most when confidence disappears.

Either she prepares markets now with honest communication, or she lets this blow up later with spectacular consequences. Based on her track record, we all know which path she’ll choose. Position accordingly.

Swing High – On The Old Nikkei

Forex Kong 7 Comments

Most of you know that I follow Japan as a leading indicator right?

It’s not at all uncommon to pull prophecy from “Krystal Kong Balls” seeing what happens in Japan overnight spill into U.S equities the following morning.

Would I have told any day trader in U.E Equities that “today” would open lower? Absolutely.

Would I suggest that 15,000 in Nikkei and it’s clear rejection at that level will usher in the coming correction? Absolutely.

Will you take any interest in this, and possibly “learn something” or perhaps consider this in your trading / investing moving forward?

Absolutely not. I highly HIGHLY doubt, that the ramblings of some gorilla as to the peaks and valley’s in “some stock market” far,far away will have any impact on you and your trading what so ever.

Why?

Because you won’t open yourself to change. You “can’t believe” anything like this is relevant, let alone “possible” as you continue to view the world via CNBC and the hordes of “financial bloggers” regurgitating the same nonsense and “predictions” day after day.

I’m buying a bunch of EURO here today and am selling a whole bunch of USD too but I’m sure “that” makes no sense to you either right?

Here’s the symbol for The Nikkei should you crawl decide to crawl outside your hole: $nikk

 

 

 

The Yen Signal That Nobody Watches

While you’re glued to Fed minutes and inflation data, the real money has already positioned based on what happened in Tokyo hours before you woke up. The Nikkei rejection at 15,000 wasn’t just a technical failure—it was a screaming signal that the carry trade unwind is accelerating. But here’s what kills me: you’ll ignore this until CNBC finally catches up three weeks later.

The smart money watches Japan because it’s the canary in the coal mine for global liquidity. When Japanese markets sneeze, American portfolios catch pneumonia by lunch. That 15,000 rejection? It’s telling you that the massive USD/JPY carry positions that have been funding this entire equity rally are about to get squeezed harder than a tourist’s wallet in Vegas.

Why the Euro Buy Makes Perfect Sense

My EUR long position isn’t some wild gamble—it’s mathematical inevitability. The dollar’s strength has been built on the back of interest rate differentials that are about to collapse faster than a house of cards. USD weakness isn’t coming—it’s already here, hiding beneath the surface while retail traders chase yesterday’s momentum.

Europe’s been quietly building a foundation while America prints its way into oblivion. The ECB’s measured approach is looking genius compared to the Fed’s panic-driven policy swings. When this carry trade unwind accelerates, EUR/USD is going to rocket past 1.15 before most traders even realize what hit them.

The Domino Effect You’re Missing

Here’s the sequence that’s about to unfold: Nikkei continues its slide, yen strengthens against the dollar, carry trades get margin called, forced selling hits U.S. equities, and suddenly everyone’s scrambling for safe havens that aren’t denominated in dollars. It’s not rocket science—it’s basic market mechanics that apparently nobody teaches anymore.

The beauty of following Japan is that you get a 12-hour head start on the chaos. While American day traders are still drinking their morning coffee, the damage is already done. The futures are already pricing in what happened overnight, but most retail traders won’t connect the dots until it’s too late to profit from it.

Position Yourself Before the Herd

This isn’t about being right or wrong—it’s about being early. The market rewards those who see the setup before it becomes obvious. When the Nikkei was testing 15,000, that was your signal. When it got rejected, that was your confirmation. Now we wait for the inevitable cascade that follows.

My EUR longs and USD shorts aren’t hope trades—they’re positioned for what’s already in motion. The market dynamics that drove the dollar higher are reversing faster than most can comprehend. The same momentum that pushed USD to recent highs is about to work in reverse with twice the intensity.

The Hard Truth About Market Timing

Most traders fail because they wait for confirmation from sources that are always three steps behind. By the time your favorite financial blogger writes about the Japan connection, the easy money has already been made. By the time CNBC runs a special on carry trade unwinding, the opportunity has passed.

The gorilla sees what others miss because I’m not clouded by consensus thinking. While others debate whether the dollar rally has legs, I’m already positioned for its collapse. While others wonder if Japanese markets matter, I’m already banking on their inevitable influence on global risk sentiment.

Keep watching the Nikkei. Keep tracking those overnight moves in Tokyo. And maybe, just maybe, you’ll start seeing the market the way it actually operates instead of the fairy tale version sold on financial television. The crystal ball isn’t magic—it’s just paying attention to the right signals at the right time.

Japan Is Broken – Soon You Will Be Too

Forex Kong 16 Comments

We’ve been waiting for this for a considerable amount of time, and our patience will now be rewarded.

The Japanese Stock Market Index “The Nikkei” has now breached our “waterfall zone” dropping an additional -200 points here overnight in a surprising ( only in that it’s happened on Sunday ) move lower, this early in the week.

The flow of news headlines won’t make a single difference in the world ( depending on what they look to as the cause ) in that, this has been slowly developing over such an extended period…it was only a matter of time before she cracked.

It takes the big players “weeks and months” to move such large amounts of money “in or out”  of position, and the past few weeks have had “distribution” written all over them. Distribution is a market dynamic where over time, large players continue to “quietly sell” to retail as they prepare to “hit the exits” with profits in hand. You certainly don’t want to be the last one holding the bag looking to “buy the dip” once the big boys make the move.

You doubt me? Consider the entire past 5 months as purely “distribution” and now watch how quickly these “gains” are wiped from your portfolio. Weeks and even months of trading “evaporate” in a matter of days.

You can lead a horse to water but you can’t make him drink well…..again I am absolutely stunned that so-called “traders” continue to push the “green button” in the face of something so incredibly obvious.

I guess you need to lose 30-40% of your gains to finally get it.

Best of luck with everything “bullish” here this week and in the months to come. Gorillas are already nearly 100% in position and already in profit pretty much across the board – still just waiting on the final nail ( USD ) to make up its freakin mind so we can jump on that train too.

Long JPY is the way to go, with the commods continued weakness right on cue. SPY and QQQ shorts from “days” ago still performing well and a miriad of trades lining up in USD. More at the members site: www.forexkong.net

 

The Yen’s Resurrection and Why JPY Longs Are Just Getting Started

Make no mistake—what we’re witnessing isn’t just another correction. This is the beginning of a major currency realignment that’s been brewing beneath the surface for months. The Nikkei’s waterfall wasn’t an accident; it was the inevitable result of institutional money quietly repositioning for what comes next. And if you’ve been paying attention, you know exactly what that means for the Japanese Yen.

Why Smart Money Is Flooding Into JPY

The carry trade unwind is accelerating faster than most anticipated. For years, traders borrowed cheap Yen to fund higher-yielding investments across the globe. That game is over. Risk-off sentiment combined with Japan’s shifting monetary stance has created a perfect storm for Yen strength. The BOJ’s subtle pivot from ultra-dovish policy is being underestimated by retail traders who are still stuck in the old paradigm.

What makes this move particularly powerful is the technical setup. We’ve been building this base for months while everyone was distracted by AI stocks and crypto headlines. The institutions have been accumulating JPY positions during every fake rally, and now the floodgates are opening. This isn’t a two-week trade—this is a multi-month currency realignment that will catch most traders completely off guard.

The Dollar’s Weakening Foundation

Here’s what the mainstream financial media won’t tell you: the Dollar’s strength was always built on borrowed time. The Federal Reserve’s pivot is becoming more obvious by the day, and when that final domino falls, USD weakness will accelerate dramatically. The smart money has been positioning for this scenario for weeks.

Every bounce in DXY from here should be viewed as a gift—another opportunity to add to short positions. The technical damage is already done. We’re seeing distribution patterns across multiple Dollar pairs that mirror exactly what happened with the Nikkei before its collapse. The writing is on the wall for anyone willing to read it.

Commodities Tell the Real Story

The commodity complex continues to weaken exactly as predicted, and this is absolutely crucial for understanding the broader currency picture. When commodities roll over, it creates deflationary pressures that central banks simply cannot ignore. The Australian Dollar, Canadian Dollar, and Norwegian Krone are all showing signs of serious weakness that will only accelerate as this trend continues.

This commodity weakness supports our JPY thesis perfectly. Safe-haven flows combined with carry trade unwinding creates a double catalyst for Yen strength. The correlation is textbook, and it’s playing out exactly as the big money anticipated. While retail traders are still trying to buy dips in risk assets, professional money is rotating into currencies that will benefit from the coming deleveraging cycle.

Positioning for the Next Phase

The beauty of this setup is that we’re still in the early innings. The Nikkei’s break below critical support is just the beginning of a much larger unwinding process. Japanese investors will continue repatriating funds as domestic assets become more attractive relative to overseas investments. This creates sustained demand for Yen that most traders aren’t even considering yet.

Risk management here is straightforward: JPY longs should be sized appropriately for a multi-month hold. This isn’t about catching a quick bounce—this is about positioning for a fundamental shift in global currency relationships. The technicals support it, the fundamentals demand it, and the institutional flow confirms it.

Every rally in risk assets from here should be faded. Every dip in safe-haven currencies should be bought. The market is telling you exactly what’s coming next if you’re willing to listen. The Gorillas have been positioned for this move for weeks, and now it’s simply a matter of letting the market dynamics play out exactly as anticipated.

Selling At The Close? – So We'll See

Forex Kong 5 Comments

The usual “Monday morning ramp job” on no news, and in fact “bad news” as far as the boys in Washington would be concerned. Let’s see if this get’s sold – particularly in the afternoon.

The referendum results in Easter Ukraine stand to suggest “overwhelming support” to indeed separate / seek independence  from the “Washington agenda” in Kiev. If you still don’t quite see the significance and importance of Ukraine from a geopolitical / economical / standpoint I’d do a little poking around and read up a bit. It’s all very interesting.

Washington’s plans to take the country – now thwarted, as the people of Eastern Ukraine have now made it very, very clear. No thanks Washington…..you can take your war mongering somewhere else.

The “long USD” trade suggested some days ago has been treating us very well, perhaps surprising a number of “non believers”, with thought in mind that USD is toast, and that “Russia and China” are currently “selling USD” as means to retaliate against sanctions.

Ridiculous. If Russia and/or China wanted to do anything to hurt The United States why not “buy USD” and sell Equities? Killing The U.S from both sides of the current “ponzi pond”.

Upward pressure in USD ( as we’ll be seeing over the medium term ) crushes The U.S Government under that huge pile of debt, slams interest rates higher, kills corporate borrowing and drives equity values lower.

I’m looking for significant moves higher in USD in the medium term.

Trades long USD obviously already in great shape here, with lots of room to run.

The USD Squeeze Play: When Debt Becomes a Weapon

The market’s obsession with “dollar weakness” narratives has completely missed the real game being played. While everyone’s looking for the next dollar collapse story, they’re ignoring the fundamental mechanics that make a strong USD the most devastating weapon against overleveraged systems. This isn’t about patriotism or flag-waving – it’s about cold, hard mathematics.

The Debt Trap Springs Shut

Here’s what the textbooks don’t teach you: when you’re sitting on a mountain of debt denominated in your own currency, the last thing you want is that currency getting stronger. The U.S. government’s debt-to-GDP ratio has exploded beyond sustainable levels, and every percentage point higher in the dollar index tightens the noose. Corporate America, addicted to cheap money and buyback schemes, suddenly finds itself choking on refinancing costs when USD strength forces real interest rates higher.

This is why the “flight to safety” narrative is pure theater. Smart money knows that buying USD while simultaneously shorting equities creates a feedback loop that Washington can’t escape. The stronger the dollar gets, the more painful the debt service becomes. The more painful the debt service, the higher rates climb. The higher rates climb, the more corporate balance sheets implode. It’s financial jujitsu – using the system’s own weight against itself.

Eastern Europe: The First Domino

The Ukraine situation isn’t just about territorial disputes – it’s about currency hegemony and who controls the global financial architecture. Eastern Ukraine’s referendum results signal something much larger: the rejection of Western financial colonization. When regions start saying “no thanks” to dollar-denominated debt packages and IMF restructuring programs, that’s when you know the empire’s overextended.

But here’s the twist nobody saw coming: this rejection actually strengthens the dollar in the short to medium term. Fewer places willing to hold dollars means less supply dilution. Less supply dilution means higher prices. Higher dollar prices mean more pressure on everyone still trapped in the system. The irony is beautiful – attempts to escape dollar dependency actually make the remaining participants more vulnerable to dollar strength.

The China-Russia Miscalculation

The idea that China and Russia are going to “sell dollars” to punish America shows a fundamental misunderstanding of how currency warfare actually works. These aren’t amateurs running central banks in Beijing and Moscow – they know exactly what would happen if they really wanted to inflict maximum damage on the U.S. financial system.

Real economic warfare would involve coordinated dollar buying combined with systematic equity market pressure. Drive the currency higher while simultaneously collapsing asset values. Force the Fed into an impossible choice: crash the economy to defend the currency, or debase the currency to save the stock market. Either choice destroys the system’s credibility. The fact that we’re not seeing this coordinated assault tells you everything about the current geopolitical chess game.

Positioning for the Inevitable

The medium-term USD trajectory is clear for anyone willing to look past the noise. Every “dollar weakness” call from the mainstream analysts is another contrarian signal. Every prediction of imminent dollar collapse is another reason to stay long. The structural factors supporting dollar strength haven’t changed – they’ve intensified.

Corporate earnings are about to get crushed by higher borrowing costs. The government’s fiscal position becomes more untenable with each tick higher in the DXY. Housing markets built on cheap credit start showing cracks. But instead of leading to dollar weakness, these factors accelerate the dollar strength paradox.

The trade remains simple: long USD across multiple timeframes, with particular focus on EUR/USD and GBP/USD shorts. The European situation is even more precarious than the American one, and the British pound has become a proxy for “risk off” sentiment. When the next wave of deleveraging hits, these crosses are going to move violently higher in dollar terms.

This isn’t a prediction – it’s a mathematical certainty. The only question is timing, and the market setup suggests we’re closer to acceleration than most realize.

Stocks Up And USD Down – You Can't Have Both

Forex Kong 3 Comments

This is what I’ve been getting at for some time – with respect to the never-ending “money printing” and “phony elevation” of U.S stock prices.

You can’t have high stock prices and a weak currency forever, as “at some point” the scales will tip back, and the currency will rise as assets priced in USD are sold.

You can’t have your cake and eat it too….or at least – not forever.

The Fed “needs” a weak dollar, in order to satisfy a number of its sinister plans.

  • A weak dollar helps “dramatically” when considering the amount of debt the U.S has. Paying out with “freshly minted funny money” has been quite a strategy indeed.
  • A weak dollar helps promote exports and encourages investors abroad to “buy U.S.A” cuz – with respect to your their own currency, everything looks cheap cheap!
  • A weak dollar translating into low-interest rates allows big corporations to “borrow cheap” ( too bad they then just go an invest the money in other countries though eh?)
  • Low interest rates force seniors ( who can’t make a return on savings ) into higher risk assets like the stock market, where they can then be completely and totally fleeced by the Fed’s big bankster buddies.
  • A weak dollar translates into inflated stock prices which deceives the general public believing  that “everything is ok” as long as the stock market remains elevated.

And  on and on and on and on and on…….

As of today….we are FINALLY seeing the inverse correlation of “a stronger USD and weaker stocks” start to take shape..as it well should!

A stronger US Dollar is a complete and total disaster for the U.S economy as along with it comes rising interest rates –  at a time where the U.S is already “practically” in recession.

The Fed has printed America into a deep deep corner as the ship finally starts to turn, with a rising dollar and falling equity prices finally putting the “fundamental balances” back in place.

The Fed’s Impossible Trinity: When Physics Meets Finance

Here’s what the central banking textbooks don’t tell you — there’s an economic law as rigid as gravity itself. You cannot simultaneously maintain artificially high asset prices, suppress your currency indefinitely, and control inflation without eventual catastrophic unwinding. The Fed thought they were magicians. Turns out they were just kicking the can down a very short road.

What we’re witnessing isn’t just a market correction. It’s the reassertion of fundamental economic forces that have been artificially suppressed for over a decade. The dollar’s recent strength isn’t coincidental — it’s the market’s way of saying the jig is finally up.

The Debt Trap Springs Shut

Every strategy has an expiration date, and the Fed’s debt monetization scheme just hit its wall. When you’ve printed your way to a $33 trillion national debt, a strengthening currency becomes your worst nightmare. Each percentage point the dollar rises makes that debt mountain exponentially more expensive to service.

But here’s the cruel irony — the Fed can’t stop the dollar’s rise without triggering the very inflation monster they’re supposedly fighting. They’re trapped between two catastrophic outcomes: let the dollar strengthen and watch the debt burden explode, or weaken it and watch inflation devour what’s left of American purchasing power.

The corporate sector is about to get steamrolled. These companies gorged themselves on cheap debt for years, assuming the free money party would never end. Now they’re facing a double squeeze: rising borrowing costs and a strengthening dollar that makes their international revenues look pathetic when converted back to USD.

The Stock Market’s False Foundation Crumbles

Stock prices built on monetary manipulation rather than genuine economic growth are about as stable as a house of cards in a hurricane. We’re watching the unwinding of the greatest financial engineering experiment in human history, and it’s not going to be pretty.

The relationship between currency strength and asset prices isn’t just correlation — it’s causation. A strong dollar sucks liquidity out of risk assets faster than a black hole consumes light. Every uptick in the DXY is a nail in the coffin of inflated equity valuations.

Investors who bought into the “stocks only go up” narrative are about to get a harsh lesson in market reality. When dollar strength meets overleveraged portfolios, the result isn’t just a correction — it’s a complete reset of market expectations.

The International Reckoning

Foreign investors aren’t stupid. They’ve been watching the Fed’s shell game for years, and many are positioning for the inevitable unwinding. When international capital decides American assets are overpriced relative to currency risk, the exodus becomes self-reinforcing.

Emerging markets that borrowed heavily in dollars are already feeling the squeeze. But don’t think developed economies are immune. European and Asian investors who loaded up on dollar-denominated assets during the weak-dollar era are now facing massive currency headwinds on their returns.

The global carry trade built on dollar weakness is reversing with brutal efficiency. Every hedge fund and institutional investor who borrowed cheap dollars to buy expensive assets is now trapped in a liquidation spiral they can’t escape.

What Comes Next: The Controlled Demolition

The Fed will attempt damage control, but their options are severely limited. They can’t restart massive money printing without triggering hyperinflation. They can’t maintain high rates without crushing an already fragile economy. They’re playing a game where every move leads to checkmate.

Smart money is already positioning for this reality. While retail investors chase yesterday’s winners, institutions are quietly rotating into assets that benefit from dollar strength and economic uncertainty. The metal moves we’ve been anticipating aren’t speculation — they’re mathematical certainties.

This isn’t the end of American financial dominance, but it’s the end of the artificial suppression of market forces. The dollar’s rise and stock market’s fall aren’t separate events — they’re two sides of the same economic rebalancing that was always inevitable. The only question was timing. That question just got answered.