intraday trading

Revenge Trade – QQQ Will Take You Lower

Forex Kong 6 Comments

You’ve heard of the revenge trade right?

After you’ve been knocked over the head with a baseball bat, and the market has run off with most of your account – you then decide “I’m gonna get it all back”!

Let’s say you go out and do something stupid…like…really stupid, totally stupid, “moronic” like you decide “right now” to go out and buy Tech /QQQ and “get long technology” as means to exact your revenge.

Can anyone say “doublé whammy”?

When acting on pure emotion, traders / investors don’t make good decisions. The revenge trade ( more often than not )  kicks you in both knees, spits in your left ear, and leaves you in broken heap – crumpled on the sidewalk. Nothing good will ever come of this, and the lesson comes hard.

Check you head. Kick back and re-evaluate. Go for a walk. Drink some beer.

Prepare for the “next leg down” in technology.

 

 

 

The Smoking Gun – No Love For NZD

Forex Kong 10 Comments

New Zealand has raised its base interest rate to 3% from 2.75% overnight – now pushing the Kiwi “higher” than it’s neighbor AUD ( The Australian Dollar ) as far as yield is concerned.

Now……in a typical / healthy / strong / global growth / “risk on” environment – this kind of news would have sent the Kiwi “shooting for the moon” as Carry traders planet wide would most certainly look to take advantage of the % spread. Selling JPY and USD ( at near 0% ) and in turn buying NZD at 3%.

So why on Earth is NZD “lower on the rate hike”? How is this possible? Why would this be?

It’s because Carry traders are currently “unwinding risk” in preparation for what’s ahead. These types of moves take weeks if not months to play out, so once the ball has started rolling there is no way, NO WAY major players / Central Banks / institutions are going to “shift their plans” and “change direction” just because a single country has made a small interest rate hike! Not a chance!

If you ask me – the muted reaction to the New Zealand rate hike is literally a “smoking gun”.

Big boys are turning the boat, and nothing….NOTHING is gonna stop it.

Your Broker Selling You Shares – You Still Buying?

Forex Kong 1 Comment

While the SP 500 “pass the bag to the innocent bagholders” show continues, have a peak at this (borrowed) chart of what “institutional investors” have been doing all the while.

You know “institutional investors” like your bank, your brokerage firm, your investment advisor – you know…..those guys you can really count on to let you know what’s up – and how you should be investing.

20140416_smart_money_Forex_Kong

20140416_smart_money_Forex_Kong

Think anybody’s sneaking out the back door on this last “SP 500 pump job”?

Oh right….he’s your broker, ya ya….your banker right right…….

Who do you “think” institutional investors are pal?

– I don’t want to hear it.

 

 

Nikkei Reversed – China PMI Next

Forex Kong 2 Comments

What’s absolutely hilarious about this is that….

The “planetary growth engine” China has already posted 3 straight months of CONTRACTION, with the “flash manufacturing PMI” numbers set to be released later on this evening.

The industry “expectation” is ALREADY at 48.4 ( Above 50 indicates expansion – while under 50 suggests contraction ) so……market analysts already “know” the number is low – and that this will mark the 4th straight month of continued slow down in China.

China’s amazing growth over the past 5 years “fueled” the “planet wide sale of stuff” as China practically bought “everything under the sun” in order to keep on growing/building.

So who’s buying all that stuff now? All those goods and services that made corporations profitable, all the contracts / investment made during the “boom times”?

You’ve got to be “completely 100% nuts” if you haven’t figured this out by now, and seriously starting thinking about “becoming a seller”.

Get ready “bagholders”.

Here comes good ol USD on the “repatriation trade” I made light of a couple of days ago. If Japan hasn’t already stomped you into the ground…..get ready for China on deck tonight.

USD Repatriation – Up Before Down

Forex Kong Got something to say?

Repatriation – is the process of returning a person to their place of origin or citizenship. This includes the process of returning refugees or military personnel to their place of origin following a war.The term may also refer to the process of converting a foreign currency into the currency of one’s own country.

So from a financial perspective – it’s the currency part of it we’re concerned about.

Don’t you find it interesting how… just when you’ve finally got a handle on the current fundamental issues and geo political concerns that “may” influence movements of a given currency – things start moving in the complete opposite direction?

Huh? Dollar going up? Well……I thought the U.S Dollar was doomed?

Well…..( after weeks of me going on about it ) you “now” have a much better understanding of what’s “really going on” with respect to the U.S and it’s concerns / involvement in The Ukraine right?

Russia continues to “call the bluff” and continues to move forward ( along with her good buddy China ) in creating and promoting trade agreements “outside use of the U.S Dollar” – representing likely one of the “largest and most serious threats” to the U.S “global domination campaign” of our time.

The U.S can’t have this, as it represents a major, major , MAJOR blow to the dollar’s status as the  “global reserve currency” and throws a big monkey wrench into the U.S plans to “print and export toilet paper” – keeping  the ponzi scheme alive a while longer.

They will go to war over this. I guarantee it. They will go to war before letting go of this “insane privilege” as it serves as the very backbone for their ultimate plans.

The east has had it, and has finally decided enough is enough.

So…..before the U.S Dollar can “fall off the side of a cliff” and in “preparation” for such an event many investors will begin “selling/closing” investments financed in USD abroad, and bring that money home FIRST. Get it?

An example:

If you thought the shit was gonna hit the fan and had recently bought a summer home in Italy lets say……you might now consider “selling that home in EUR” and in turn sending / taking that money BACK HOME TO AMERICA ( converted to good ol USD) – where you’ll feel safe/ better knowing your investment isn’t at risk and your money is “safe” back in your piggy bank.

You see? Repatriation. Reee-paaat-reeee-a-shaaawn.

A simple concept with massive implications.

USD needs to go up up up up up ( as investors “unwind” investments abroad) and bring those babies home.

Only “then” to see them further reduced to toilet paper.

 

There's Our USD Swing – Right On Time

Forex Kong 4 Comments

As suggested there on Friday “if” we saw an expected turn upward in USD ( or at least…I was expecting it ) this is clearly a “swing low” at a fairly significant area of support.

This could possibly be a very significant “low” for USD, marking “the bottom” of what could turn out to be a very powerful new set of “higher highs” and “higher lows”.

All trades suggested on Friday – moving in the right direction.

Otherwise, The Australian Dollar continues to baffle as “risk is clearly expected to come off” here in coming days and weeks.

The Nikkei taking a bump up this morning –  and that’s “all it is” a bump up, as you’ll recall – nothing moves in a straight line for long. This too…soon shall pass.

We’ve moved from an environment of “buying the dips” to now “selling the rips” so…..you better get your head wrapped around it.

Stocks can and will “fall further” over the coming weeks, if not months.

Over the weekend I’ve had incredible interest in the “Members only / paid services” area – thank you. I’m only a day or two away so for those who’ve already contacted me so I will get back to you via email as to login / site address etc. The payment system will be Paypal based so please be aware and maybe even look ahead. You’ll need a paypal account in order to subscribe/use credit card. It’s a snap to set up.

Trade Ideas For Next Week – If USD Gets Legs

Forex Kong 11 Comments

If the U.S Dollar can put in a solid “swing low” and reversal down here ( which it appears to be doing ) then it looks like a number of solid trades setting up, with well-defined risk – having that stops can be put just above or / below any number of USD related pairs such as:

  • short EUR/USD with “stops above” 1.39 ( that’s only 30 pips risk )
  • short GBP/USD with “stops above” 1.6820 ( 100 pips )
  • short AUD/USD with “stops above” 94.60 ( 60 pips )
  • long USD/CAD with “stops below” 1.0856 ( 100 pips )
  • long USD/CHF with “stops below” 86.90 ( 75 pips )

The Kongdicator hasn’t “officially rung the bell” on any of these, as the technology “looks ahead” a specific number of bars / time , taking into account near term volatility and a number of other factors BUT!….I’m out ahead of this with some “general trade ideas” should we see a solid swing in USD, as early as Monday / Tuesday.

Short of that, seeing the U.S Dollar fall below the recent lows in $DXY around 79.28 would have it in some real trouble, simply extending gains in all the currencies mentioned above.

Looking at “EEM” turning lower as of yesterday ( near the “same ol area” of resistance ) also suggest possible U.S Dollar strength ( if you can ever call it that ) to come.

From a fundamental perspective, as much as the Fed wants / loves a lower USD,we’ve come to an interesting junction where ( for the Fed unfortunately ) a showing of strength is really whats needed if these guys want to uphold “any sense of confidence” on the world stage.

Most of you likely don’t realize that Russia’s “announcement” that Gazprom ( largest supplier of Nat Gas to EU ) will soon be signing a massive deal with China “priced in Yuan” was a huge reason for market concerns / risk off type action over the last couple of days as I don’t imagine “that” was mentioned in American news.

I guess J.P Morgan ( one of Americas most “trusted banks” ) shit canned earnings / missing both top and bottom line expectations too but……you know….”that” can’t have much to do with anything either I suppose.

As well curious if anyone took note of my “short Japan trade” EWJ puts / short going back to March 31st?

Have a good weekend all.

What If I Was Right? – And The Top Is In

Forex Kong 24 Comments

Lets entertain a hypothetical situation for a moment…I mean – why not right?

Let’s say “what if”………

What if I’m correct in suggesting that the 15,000 area of The Japanese Nikkei Index marks the top, and that indeed ( as seen in the past ) this “top” will soon be mirrored in U.S Equities as well?

Now I’m not talking about a “mid-term top” or a “short-term top” – I’m talking about the “top of all tops”. The kind of top you can only imagine / dream that you may have been fortunate enough to have identified, and in turn – traded accordingly.

Yes….”that” kind of top.

So…..What if I’m right?

Can you imagine having yourself positioned not only “before” a major turn in the markets but for a “bearish turn” at that? Allowing your trades to move into profit based on market dynamics “driven by fear and panic”?

How bout letting those trades sit ( much like an investment ) for several months, or even ( in timing it correctly ) “several years” considering what might be coming down the pipe in a longer term “global macro” sense?

What if these levels in stock market valuations ( in both Japan as well U.S ) reflect levels that may “never be seen again”, or at least not for several years to come?

What if?

It’s fun to think about, especially as these past months have been so tricky.

I keep coming back to that 20 year chart I posted the other day, considering that “wow you know Kong……you might just be right”.

Nikkei_Longer_Term

Nikkei_Longer_Term

You might just be right.

Nikkei Has Topped – There I Said It Dumb Ass

Forex Kong 5 Comments

It’s my belief that the Japanese “Nikkei Index” has indeed topped, and actually did so back around 16,450 at the beginning of the year. Ya, ya , ya – I don’t usually do this / make such bold calls but what the hell…..these days I see every bozo under the sun suggesting things will go up forever so…..you can “take heed” or “take a hike” – trade it as you see fit.

This last “run up to around 15,000” ( where I’ve suggested again, and again, and again we’d see reversal ) has been what some might consider “wave 2” ( if you are an Elliot Wave guy ) leaving open consideration for a much larger “next leg down”.

The Nikkei topped AHEAD OF THE DOW in 2007 in very much the same fashion.

Nikkei_Top_Led_Dow_2007

Nikkei_Top_Led_Dow_2007

Remember this “beauty” from a few months back showing the Nikkei over a 20 year time frame?

*Draw a horizontal line at 15,000 in your mind. That is what we call a very, very, VERY strong line of either support or resistance – considering it’s significance over such a long period of time.

 

Nikkei_Longer_Term

Nikkei_Longer_Term

Japan is a disaster, and when looking at things in this context – so is everything else as…..the Nikkei generally leads.

Perhaps this will shed some light as well….on my views about Central Banking and money printing as ( if you can imagine ) the massive dilution of the Yen ( as well USD ) over the past years, if only to achieve an incremental “short-term rise” in stock prices then……..to see things fall right back to where they started – just with waaaaay more “toilet paper” floating around.

Nothing has really changed, short of an incredible “transfer of wealth” from those already left with very little………to those who’ve already got a lot more than they need.

(P.S….in light of this “bold post” I might as well throw caution to the wind and tell you to run out tomorrow, sell your house, rack up every credit card you can, sell everything you own, leverage everything you’ve got another 500%, then “pre – market” dump every penny on a get rich quick “short play” Nikkei/Dow/whatever”, sit back and just watch the millions pile up.)

Please……..don’t be silly. I’m a single gorilla, with a single opinion and view of these things that for the most part – doesn’t generally fit the status quo.

Don’t be a dumb ass.

I know you’re not.

 

 

 

 

What Do You Know? – I'm All Ears

Forex Kong 1 Comment

Friday’s sell off in U.S Equities certainly took a number of people by surprise now didn’t it?

This in itself “not surprising” as the current state of “passivity” and “complacency” among investors is at or “above” all time highs. People have got this crazy idea in their heads that everything is moving along as planned, the “recovery” is well underway and that essentially ( no matter how many times they change their tune ) the Fed is there to screw you oops – “save you” if things start to get ugly.

I borrowed this chart from the good fellows at Zero Hedge to illustrate an important point.

Realistically – how much further do you think the market can stretch ( considering we are already in one of the longest, overstretched, Fed induced, pump job markets in the history of mankind ) before doing what “markets always do” as illustrated in the chart below?

Markets_Top_Forex_Kong

Markets_Top_Forex_Kong

What could possibly have you think that for “whatever reason” – this time it’s going to be different, with historical data going back to “the beginning of time” showing the “boom and bust cycle” repeat, again , and again , and again?

Tell me! Don’t just read this crummy little blurp and go back to the T.V! You tell me what it is that “you know” that has it that “this time”…yes “THIS TIME” – IT’S GOING TO BE DIFFERENT.

  • It can’t be the Fed…..cuz ( haven’t you been listening? ) the Fed says it’s going to continue with it’s tapering and within the next year END IT’S QE PROGRAM all together….so don’t give me that.
  • It certainly won’t be U.S Corporate earnings as expectations for earnings have come down considerably for the first quarter, and what? You imagine the spring and summer quarters will be any better?
  • It can’t be “global growth” as every estimate from the IMF down to the average joe blow walking down the street knows – global growth “ain’t goin nowhere” anytime soon so…….

So what is it Sherlock? What is it that “you know” that the rest of us don’t, that would have you “buy and hold” now?

5 plus years of full blown money printing and equity pump job to have it that 326,000 MORE Americans stood in the unemployment insurance line last week, and 1 in 5 households in American are currently on food stamps.

I can’t wait to hear back. I seriously “can’t wait” to hear back.