One can only wonder how “positive for markets” a 7.5 Earthquake off the coast of Fukushima will be ( no sarcasm there )
Regardless…..USD topping out for the long plunge over the next several weeks.
I’m jumpin on board here shortly, and will likely get picked up sub 99.00 with tonnes of room for lower.
usd_topping_out
I like the short side, as people freak out and movements are so much bigger.
Steady as she goes…..
Strip away the television.
Scrap the Internet.
Cut the phone lines and burn the newspapers.
Then go take a look in the mirror……Go! – Do it! Go look yourself right in those “baby blues”……….and ask yourself.
Do I really have a f%(@king clue as to what the hell I’m doing?
Do I “really” know a single “f*$@Qking thing” of my own? – short of what “I’m told”?
Answer: Not.
Solution………………………………………………………………………………………………………………..Become a writer.
“Know Thyself”.
If you’ve heard me say it once – I’ve said it a million times. A strong U.S Dollar will not be tolerated, as it represents a “red-hot poker to the eye” of both the corporate American “and” The U.S Fed.
You can fire up with all the fancy economic bullshit you can rustle from the countless “pro risk/pro USD/pro economic recovery loser blogs” out there ( and I hope you do ) and it won’t make a stitch of difference.
This thing will be cut off at the knees as U.S earnings plummet to the depth of an ocean.
Lets just call it the “Sea of Recession”.
You’ve heard of it but have no f*^*king clue where it is…..perhaps try looking in your backyard.
Short USD trades are once again “up and running” as we prepare to snap up all those long trades – soon going overboard.
I’d take a look at U.S Equities as well and consider that when BOTH the U.S Dollar AND Stocks start dropping like a rock….the big boys will have already taken the life rafts to shore.
I’ll already be on my private island – scanning my beaches for washed up traders and radio shack suits.
Do you think New Yorker’s can even swim?
I doubt it.
Recent travels have taken me to the far reaches of the planet…..far far away from these pesky markets, deep into the darkest flora and fauna this world has to offer.
I am literally in the middle of nowhere…..and loving every minute of it, short of the “pancake sized” blisters on the back of my heels from having to actually wear shoes / boots. It’s slowed me down a touch….but I’m on the mend now.
No Internet. No Television and barely a scrape of food for miles, let alone a crisp cold beer. I freeze my ass off at night and am now as white as a ghost, blending in the best I can with “wonderful savages” who inhabit this land.
I speak nothing of markets as I am now deeply entrenched in far more “pressing matters” the likes of which I’m not at liberty to discuss – at least for today that is. ut I can tell you this: Something big is about to happen.
Cryptic as it may be, there is no question in my mind that “change is in the air” and considering how stagnant things have been – it’s about freakin time.
I will be back on top of markets as I am now this “mountain we call life” from this afternoon on.
I appreciate your patience but hey……did you really even miss me?
When you are actively trading a given asset or currency pair, you often run the risk of “missing out” on large movements in price, as you’ve taken profits and then try to find the best way to get “back into the trade”.
Obviously I would generally “look for a bounce” in order to re-enter the trade at higher prices when shorting, but what if that “bounce” doesn’t come? You’ve booked profits on only a small portion of the move, and now run the risk of “missing the crash” as you sit on the sidelines “hoping for the ultimate level” to re-enter the trade.
It’s always a tough spot. And I can’t tell you how many points I’ve missed over the years, exiting a trade then watching it go “much further” without me. You can’t catch every single one, and you can never go wrong taking profits.
I employ a simple strategy of “getting under the asset” – placing orders several pips “below current price” when shorting ( and obviously “above” current price when getting long ) with hopes that my orders will get picked up on “further momentum” in said direction. It’s really all you can do.
If you just sit patiently waiting for a bounce, there are times ( such as these last few days with our general position long JPY ) that you may just miss the bigger ride lower, so having a couple of orders in the system “below or above” the current price “should” allow you to participate further, should the move continue.
It’s always tricky looking to “actively trade” as opposed to looking at larger time frames and holding trades longer, and it’s really a matter of preference, but I can say from experience – It’s almost “always” more profitable if you are able to just “stay in the trade”.
A quick update for those who’ve been following and have come to understand the “extremely large” position I’ve been building “short” The Australian Dollar.
They say that “good things come to those who wait” and believe me……I’ve been waiting.
If you can imagine, The Australian Dollar has traded sideways / flat for an incredible 24 weeks, until just yesterday smashing lower -250 pips in a matter of hours.
AUD_Sept_10_Forex_Kong
We all know that “in general” The Australian Dollar trades along side risk, moving higher with stocks so it is worth noting that with yesterdays “tiny fall” in U.S Equities we certainly got a reaction out of AUD.
If / when a larger correction unfolds one can only imagine profits generated “staying short” AUD as I plan to.
On a side note – I don’t believe for a second that Scotland will vote “yes” to separate from The U.K, and that long GBP here is looking very, very good.
Long GBP/AUD anyone? Kinda makes sense if you actually take a minute and think about it.
GBP going up….AND AUD going down. These are the trades that pay.
Well that has my upside targets in both The Nikkei (15,499 ) as well SP 500 ( 1668 – 1678 ) more or less met so…….
Give or take another couple of points over the next day or so, this certainly creates an interesting scenario moving towards Jackson Hole – and the expected “chatter” out of The Fed.
It’s been my believe that “this indeed will be the time” where markets are given “some kind of clue” that perhaps the time has come to buckle up / take profits / begin taking precautions as to coming changes in monetary policy etc but…..I’ve obviously been disappointed by Yellen in the past.
Lining up the fundamentals as well technicals would have both USD as well as Equities take a turn lower, with JPY ( as well gold ) moving higher ( and obviously the commodity currencies falling off along side risk ) so…..the question obviously begs……
Will The Fed do it or not?
One has to keep in mind that, as much as a strong USD ( in at least one way ) creates an impression of a stronger economy, it also represents a tremendous burden on the American Governments debt load. For every single point that USD moves higher…..the amount of outstanding Government debt also moves higher – having to be repaid in USD.
It’s been The Fed’s plan since all of this began to “keep a cap on USD” ( well actually to drive it into the basement ) with the thought in mind of “exporting inflation” and keeping the “service of outstanding debt” at a bearable level.
One has to keep in mind that The American Government and The Fed NEED a weaker dollar in order to keep the ponzi going so…..it’s difficult to imagine USD “shooting for the moon” before at least another solid move lower, as changes to monetary policy ( and the supposed “end of QE” ) take root here in October.
Trading it is a nightmare as…….one stands to take a substantial hit getting caught leaning to hard in either direction – with these types of “risk events” best viewed from the sidelines.
As it stands I will continue to hold the few “short USD” irons currently in the fire, and let the chips fall where they may, with continued focus on JPY vs the commodity currencies setting up for the larger trade at hand “post Fed”.
Continued divergence across several currency pairs still see USD moving lower….before higher.
The raft of geopolitical concerns out there ( in particular Ukraine ) are finally starting to influence markets. The largest “current concern” now being what effect Russia and it’s supply of natural gas ( or “lack there of” – should things continue down this road ) will have on The European Economy, which is in a sad enough state of affairs as it is.
This isn’t going away anytime soon, and will likely be the catalyst ( or at least via the main stream media ) where blame can simply be placed on Russia for all problems in Western Economies wherein these problems have just been papered over – having been there all along.
My original post back in February “U.S Wants Ukraine – No Matter What” on the subject.
Of particular interest as it pertains to our trading here, take note of any “1 Hour Chart” containing JPY ( AUD/JPY for example ) from Friday, and see the “blatant and obvious” currency move on news that Ukraine attacked a Russian military convoy.
Japanese Yen is going to absolutely “explode higher” given any type of “black swan event” aside from its continued strengthening on safe haven flows.
Trading The Week Ahead
Our charts for both The SP 500 as well Nikkei have played out almost literally “to the letter” – having taken the anticipated bounce and now looking like they are ready to roll back over.
For more detailed trading, real time trade alerts and daily commentary please consider the Members Area as September is setting up for some of the largest opportunities we’ll have seen over the past several months.
Obviously you can’t win if you don’t buy a ticket, and at times….these tickets can cost you a pretty penny may it be psychologically, financially or both.
So when things are trading sideways ( as with the example of EUR/USD for example ) how long does a trader choose to hang on before considering the trade a wash / scratch or even a loss?
It’s always up to the individual, as no two traders have the same “threshold for pain”, each with their own set of rules / factors influencing their decision-making but ideally…the decision is made “sooner than later” – as there will always be another opportunity.
One particular “dynamic of price action” I like to use ( in order to help with this decision-making process ) is what I call the “fourth time’s a charm”.
When any asset price has tested an area of support or resistance for a fourth consecutive time over a span of perhaps a few days – it’s time to take note – as the next move is likely going to be the one that counts.
Breakout or breakdown, one can usually “make it or break it” on the fourth time an area of support or resistance is tested, suggesting that the asset has “done all it can” to either push through the area of resistance overhead or succumb to the pressure, finally falling through support below.
And so we find ourselves in the case of the U.S Dollar vs a number of currencies, currently testing the “fourth time’s a charm”- not to mention both our patience and our discipline.
Which way does she go from here?
The fourth time’s a charm so…….we’ll just have to let mother market decide.
After years of obfuscation and, simply put, lies; TEPCO has admitted in a new report that more nuclear fuel had melted at the Fukushima nuclear reactor than previously stated. While this is dreadful news, it gets worse, as the report further confirms that despite Abe’s promises and TEPCO’s state-funded efforts to build ice-walls, it may miss an important deadline binding it to clean radioactive water stored inside the Fukushima nuclear plant.
Bloomberg reports officials commenting “we are doing everything we can do,” but it appears, that is not enough as tens of thousands of tons of toxic water are expected to remain at the site by the imposed deadline.
Get the rest of the story here or “oh I dunno” maybe start looking ito the “reality of this disaster” yourself.
You still haven’t got short Japan? EWJ ( as suggested a couple days ago ) clearly moving lower.
More here.