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.
One of the most entertaining parts about “financial blogging” truly lies within the “immediacy of it all” as….unlike “posting a recipe” (where people may choose to “give it a try or not”) here in the financial space – real money is at stake.
Traders on both sides of the fence get an opportunity to “compare as they dare” when fellows like myself ( and all you other guys with the balls to do so ) put it out there for all. You write it down…you make your move, and regardless of whether you fail or succeed – people really get a charge out of “watching you burn” – or “watching you earn”.
Oddly….or perhaps not so ( considering humanity in general ) I think the majority of people (as sick as it is ) rather “enjoy” watching others fail. Perhaps it makes then feel better about themselves – I can’t say for certain but…..I guess if I lived in a lean-to behind my grandmother’s trailer park and ate spam each day for breakfast, maybe I wouldn’t “mind so much” hearing that the guy eating lobster on a Caribbean beach took a hit or two.
I dunno….its small, it’s petty but for the most part – sounds pretty “human” to me.
In any case….by close today I will initiate the “first of three” planned trades ( as I always spread my total allocation to a given trade idea over 3 separate entries – over time ) short The U.S Dollar against a number of other currencies.
I assume the trade will pan out late January / early February ( or perhaps earlier ) with a total allocation / risk of 10K – spread over 3 separate entries over the coming days / weeks.
I have fully factored that the entire 10k could be lost….so for “lovers and haters alike” I invite you to follow along and comment ( uncensored ).
You can see what kind of “gorilla I can be” so……………….let’s see how “human” you can be.
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”.
The SP 500 has now broken below a critical area, suggesting that further losses ( over the next several weeks ) will be seen. But of course, right around the time you figure that out – markets also look set to bounce.
This “bounce” ( however great or small ) will only provide greater opportunity to continue shorting – just at higher prices.
Dip buyers will unfortunately be met with “the dip that turned into a dive”.
Regardless of near term price action over the next couple of days, what people need to understand is that we’ve turned a corner, and that as per The Nikkei in Japan ( leading us lower for several days prior to The SP finally rolling over ) any idea of a “new string of higher highs and higher lows” is very likely out of the question.
I don’t expect higher prices in Japanese stocks period so……as nearly every single index globally has now broken below significant lines of support it’s fair to say that indeed – a significant top has finally been reached.
“Selling the rips” now, not “buying the dips”. That’s the road we’re on.
Sinking below 1904 has solidified a much larger and more serious correction ahead, so investors / traders need to be aware that we’re on the other side of the mountain now. This earnings season is also expected to bring disappointement so look ahead to lower stock prices in coming weeks.
These past summer months had to have been the “absolute worst trading environment” I’ve experienced in my entire life.
A virtual “dead zone” with many currency pairs barely fluxtuating in tiny ranges, extremely low volume and a continued stream of “every conflicting data” flying directly in the face of any realistic fundamental analysis. Many a trader threw their charts out months ago, choosing to either sit on the sidelines until volume returned or possibly adopt the attitude of “oh to hell with it – let’s just buy stocks and everything is going to be fine”.
I haven’t really heard much from many “perma bulls” since the correction back in July wiped an entire 6 months worth of profits in a matter of 10 days, and wonder how the “let’s just buy” strategy has really worked out. Hats off to those nimble traders who may have not only sold at the correct time, but possibly even caught the next leg up. Fantastic trading.
So September is now upon us, and it finally appears that markets are starting to come alive once again, only that “volume” seems to be returning on the “down days” and not so much on “the up”.
Both gold and silver have been taken down to test the near term lows made back in June, with silver in particular testing the “ultimate low” around 18.00.
The Japanese Yen ( which trades in tandem with Gold as they both generate “safe haven flows” ) has now reached it’s most oversold level of the past 2 years.
The U.S Dollar ( inversely ) has now reached the most “overbought levels” of the past few years.
U.S Equities as seen via The SP 500 have recently made “all time highs” around 2011 level.
Call me crazy but, would one not agree that each of these correlated assets are just about as stretched to extremes as we’ve seen them in a very long while?
Does it not make complete and total sense that “this would be the case” just prior to a sizeable move being made in the opposite direction? Of course it does….as this is how markets function.
Get the boat as “loaded to one side” as you possibly can – “just” before tipping it.
We’ve seen it over and over, and over again and this time it will be no different.
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.
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.
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Every single chart you view / analyze sitting “right on the cusp” – with just a “tiny push needed” to put this thing into the “golden zone”.
Draghi should provide that for us on Thursday when markets “finally understand” that Mario Draghi and the European Central Bank will not participate in the ridiculous “currency devaluation practices” put in motion by both Japan and The United States.
If a piddly “interest rate cut” is actually in the cards….it’s more than already priced in, and the idea of “massive dilution / bond buying” etc is completely and totally absurd.
Germany runs the show in the E.U, as the only country with an economy worth a damn.
Draghi can’t “act” on behalf of a dozen countries, as there “is” no European bond….and he “can’t legally” devaluate the Euro.
Christ…..imagine if Canada and Mexico where ever foolish enough to allow / agree to a “North American unified currency” with the U.S Fed at the helm?? He he he…..impossible. Speaking on behalf of “both” countries….. I know for certain – the people are much smarter than that.
Wait til U.S stocks are literally “chopped in half” and then imagine what that money printing solved. Bahhh! Nada.Zip.
So we sit patiently for yet another 24 hours. I’m cool with that.
Draghi is “once again” getting ready to to do what he does best.
The pool of saliva on my trade terminal widens as it’s getting difficult now to even touch the keys without gloves on.
Gross I know but……..isn’t this market just disgusting anyway?
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.
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.