market analysis

The Future Economy Explained – Video

Forex Kong 16 Comments

The following video ( and series of videos should you wish to view all of them ) provides some of the most straight forward and easy to understand explanation of The Federal Reserve, the history of fiat money and Central Banking ,as well ideas of what the future may hold – with respect to the outcome of this current financial “experiment”.

These are some extremely well-respected gentleman talking ( many have beards ) including one of our favorites Dr. Paul Roberts, and the material is extremely easy to understand.

I recommend that “anyone” who still may have questions about some of the basics, or still may be struggling to wrap their heads around some of this  – Watch these videos.

I wanted to include them in the material available here at Forex Kong as the information is provided in such a straight forward manner.Perhaps plan to bookmark and come back throughout the week as each video is about an hour-long.

[youtube=http://youtu.be/nB8GmcRV_yg]

Trade Questions Answered – Where To Now?

Forex Kong 27 Comments

I guess it makes sense to quickly pull this apart, break it down and get squared on where I’m heading next, as the Fed’s tapering announcement yesterday has certainly raised some questions.

It’s obviously still a bit early to be making any “rash decisions” (as a single day of market movement is that and only that) but it is interesting to take a quick look at how a number of asset classes have “initially reacted” to the news.

Gold has been crushed, moving lower a full 30 bucks.

  • But wouldn’t “tapering” be viewed as “less stimulus for markets”? Shouldn’t gold have shot for the moon on the news?

U.S stocks shoot higher, as Dow gains 300 points.

  • But isn’t the idea of “tapering” going to lead to higher interest rates? Shouldn’t stocks be falling as the Fed pulls back on its POMO and market liquidity injections?

The U.S Dollar has moved higher, but is still well under strong areas of resistance. The U.S Dollar has stalled already.

  • But shouldn’t the U.S Dollar “break out” on news of “tapering”? Isn’t the idea of “tapering” supposed to be good for the currency?

Bonds as seen via TLT haven’t even budged. U.S Bonds are still very much under pressure as selling continues.

The media spin is clear – that the U.S is indeed “rebounding” and that the recovery is well under way. This now “confirmed” via the Fed’s decision to taper. The Fed was doing the right thing while adding stimulus, and now will be perceived as doing the right thing in pulling back right?

The puppet show continues, as for the most part “none” of the above “initial reactions” made any immediate sense. It’s unfortunate having things pushed back a day or two but as it stands……everything is “still” very much on track.

I’m expecting to see the U.S Dollar roll over here quickly – (early next week) and will continue with the same framework I’ve been working within these past several months. The Nikkei hit my 16,000 mark for a second last night as well so…..that too will provide some valuable information moving forward.

Sitting out yesterday in near 100% cash was one of the single best trade decisions I’ve made in the past few months, now allowing me to deploy “big guns” at an instance – when “real opportunity” presents itself.

You where warned. You may have gambled. You likely lost.

 

Post Fed Scrum – Kudos To Readers Of Kong

Forex Kong 35 Comments

Talk about a twist.

Ben hand’s off the bag to Yellen “with” a proposed “tapering”, and seals his legacy as one of the smoothest Central Bankers ever to have walked the Earth – or at least in the public eye.

I wonder what he’s gonna do with the next 20 years of his life? as it will likely be “more interesting to follow” than these last five.

You’d have to have rocks tumbling around in your head if you think that 85 billion is “all” the Fed’s been throwing at markets per month. I imagine it’s more like 150 billion or more as….the bond market is just too large to consider 85 billions per month having much affect.

Post announcement TLT is still sliding, and the U.S Dollar can’t even break even so……the big boys positions remain the same. MY POSITION REMAINS THE SAME.

The “effect” has merely been “the idea” (in traders / investors minds) that “they will never let the market fall”. If it took a number of 85 billion per month or 850 billion for that matter – it doesn’t really matter as the numbers manifest solely as “tiny computer entries” within a small group of friends.

A big “congrats” goes out to our beloved “Deano” for not only hitting the “tapering” right on the money….but also for “serving it up” like a true gentleman. If Deano owned a restaurant – I would eat there often.

For me? Another day of trading, and another day FULL of opportunities. Nikkei popping to 16,000 and USD certainly “not” moving higher on the news………..

USD “not” moving higher on the taper news??…..Hmm………..that’s a bit odd don’t you think?

You’ve been practicing, following along….learning the correlations etc…

Would you not have thought USD would “skyrocket” on taper news?

Hazard a guess as to why not?

 

 

Trade The Risk Event – Sitting On Hands

Forex Kong 26 Comments

As much as I hate reminding you, the Fed meeting runs through today – with announcements expected tomorrow so…….you know what means.

Risk event ahead – as the statement will be released Wednesday at 2 p.m.

Obviously these Fed announcements are what the market’s hinges on these days, as the possibility always exists ( as the Fed has proven in the past ) that they “might” say or do something shocking. Tomorrow’s announcements may provide clearer language on “tapering” – but I doubt it. I’m going to assume they move forward with the continued stance that “tapering will remain data driven”.

The debate is pointless, but what is important is how you choose to position yourself prior too, and then of course “after” the news is out.

From a technical perspective “risk” could easily make one more “little jump higher”, as equities still look “alive” all be it exhausted, the U.S Dollar still appears to be trapped in its downward spiral.

I would look to “sell” any possible “uptick” USD takes tomorrow ( if any at all ) PENDING they don’t announce a tapering, as this should just keep USD steadily on its way to the basement.

“If” by some wild stroke of insanity – they “do announce tapering”, it will require more than just a couple of hours tomorrow, to get an idea of what markets will do with that, and I would suggest to anyone looking to trade it……..let things settle out / calm down BIG TIME before even thinking about entering.

I’m back from a short ( but wonderful ) holiday and ready to go here again. I’ve got a few tiny irons still in the fire, but am for the most part – sitting in cash. As much as one would love to “get in there” and take advantage of “whatever pans out tomorrow” the responsible thing to do is to wait.

Wait I shall.

Traders Paradise – Tulum – USD To Fall

Forex Kong 6 Comments

Don’t worry yourself for a second. The US Dollar will make a small counter trend move here  ( or may already have ) before falling further,as we all know that nothing moves in a straight line for “too long”.

You’ll have to understand….there are millions of “dollar bulls” out there, lapping up the nonsense about “tapering”, falling all over themselves to “get long the dollar” before the “big announcement” on the 17th so…when you see “an occasional green candle” in anything “USD related” – you know these people are trying…”again”.

Meanwhile – I will be taking a holiday this weekend at the mystical ruins of “Tulum” so…eat your heart out dollar bulls.

Tulum_Forex_Kong

Tulum_Forex_Kong

Tulum is an absolutely amazing place, as the Maya sure knew where to build their temples. You can wander the ruins a while, head down to the beach for a swim, then hit the little beach town for a bite. The iguana’s here are massive, such that one particular “ruins resident” has aptly been named “Tyson” after the boxer Mike Tyson.

I have little concern about the markets moving forward, and look to “clear my mind” and enjoy every single minute I can. Away from numbers / math / trendlines / blogs / news and “anything” remotely related to Forex.

I’ll still plan to post – maybe some pics too.

Have a good weekend everyone!

No Taper – Never – More QE To Come

Forex Kong 61 Comments

There is no possible way that the Fed is going to taper, and I find it to be completely irresponsible that the current “media blitz” in the U.S media is speaking of it  – as if it’s practically a given!

This is absolutely outrageous!

A bunch of floating heads reading a teleprompter, speaking as if they’ve some “authority” on the subject, rambling on and on and on,as to how the Fed’s “taper” is not “tightening”.

And you’re buying this bullshit?! Do you even understand the difference? Is there a difference?

It’s like this…..I can find a million different angles to illustrate the point, but in sticking with the “Japan is doomed theme” lets simply consider this.If the U.S Federal Reserve was to actually “taper” we all know the inverse / correlating effect it will have on interest rates. THERE IS NO WAY THE FED TAPERS WITHOUT INTEREST RATES RISING. PERIOD.

Interest rates rising in the U.S will put immediate ( and I mean “immmmmmediate” ) pressure on interest rates around the globe.

Boom!….Japan’s interest rate on outstanding debt rises to only 2% and BAM!

Full scale economic collapse / disaster / as the interest owed would exceed 80% of the government revenue, setting of a string of “economic events” tumbling domino after domino in this now “very global economy” we live in.

There is not a single chance in hell! The Fed is going to risk “global economic meltdown” by way of tapering, and “forcing rates higher” at a time when the entire planet is hanging by a thread.

Impossible.

This thing is so interconnected now that as we’ve discussed in the past – The U.S Fed has painted itself so far into the corner, that the only way to keep the dream alive will be to “increase QE”.

I honestly don’t know how the entire staff of CNBC as well CNN go home every night to their families etc – and are able to look themselves in the mirror with any shred of dignity, moral code or sense of decency.

It’s disgusting.

Market Update – Trades Closed – Profits Taken

Forex Kong 18 Comments

I’ve finally sold both EUR/USD as well GBP/USD, blowing out the EUR/AUD and NZD for the piddly gain of 2% on trades entered last Thursday.

I can’t say I’m particularly thrilled with either the performance “or” the current price action as a bounce in the commodity currencies took a couple of trades off track.

There is no fundamental driver for the smaller move up in both AUD and NZD, so I will be keeping my eye on near term resistance spots, to fade.

Considering that the US Dollar “has” continued to slide as suggested – picking your trades and your pairs hasn’t been as straight forward as one would imagine, with pairs like USD/CAD just “hanging” for days on end. The European currencies the obvious winners with the big moves vs EUR, GBP and CHF.

I’m more or less back in cash now as I would rather sit “outside the market” til at least a couple of things get straight. In general it looks like this will likely stretch out til the end of the year with equities making “one more last higher high” before rolling over into a mid-term decline.

The relationship of USD falling and gold catching a bid “is” coming along, but as suggested – no swinging for the fences down here please.

Oooops….I just reloaded both EUR/USD as well GBP/USD for additional shot at further upside, and  will just lettem do their thing.

 

Trade Through Volatility – Get Tough Or Get Out

Forex Kong 22 Comments

If you’ve got zero conviction in your trade decisions – what hope in hell do you have in succeeding?

If you’re just “rolling the dice” sitting glued to your screen, “praying to god” the damn thing moves in the direction of your trade after a huge “risk event or ” news release” – give your head a shake!

YOU ARE THE LIFE BLOOD OF THE BROKERS AND WALL STREET BANKERS!

“Ka Ching!” – Thank you very much you tiny frightened little man, trading on margin with your hopes and dreams of “striking it rich” – I will liquidate your account now! “Ka Ching!” “Ka Ching!”

You’ve got to either sit these things out, or have a firm understanding as to where to pull the rip cord. Otherwise…..you’re sitting ducks.

I just saw several trades fluctuate as much as a full 100 pips within a 15 minute interval. Several “thousands of dollars” blinking before my eyes across the board – positive, then negative,, then mixed, then positive, then negative.

Has the world stopped turning? Has something “so amazing” occured as to change my entire outlook in a single 15 minute blip? Of course not!

With no conviction – you’re toast, and if you can’t rustle it up then the number one piece of advice I can give anyone is to TRADE SMALLER!

If your heart is racing! You’re trading to big!

 

 

The Correction – One Way To Trade It

Forex Kong 2 Comments

It’s simple.

The hot money out of Japan has been responsible for “a pile” of the recent run up in U.S equities, as Ben and his buddies have been busy enough in the bond market – with little success. TLT is currently priced at 102.65!

I’m pulling up this ol chart from back “I don’t know when” I first suggested what was to come for U.S bonds, the U.S dollar – and inevitably U.S stocks.

Quote: “Not much else to add here as the intermarket analysis above pretty much outlines the direction for the U.S Dollar. I feel we will likely see a time very soon, when U.S bonds, U.S stocks as well as the U.S Dollar all fall together.”

TLT_Forex_Kong_April_20

TLT in Weekly Downtrend

I really don’t think people grasp how screwed the Fed is, and unfortunately how this translates to the “middle class” of America – who will be stuck paying for it.

With 85 billion per month in effort, you can see by only a couple of “down days in the market” the Fed is absolutely powerless when the “market decides” what’s what.

You’d seriously have to ask your self what on Earth would need to occur to “reinstill confidence” in the purchase of U.S bonds/debt? Not to mention the “global move” away from USD. Tapering is impossible. QE will be doubled no question, then likely tripled.

Did I mention that recent data has just had the “Yuan” replace the Euro as the second most widely traded currency on the planet?

This may not be the “last of it” as the large majority of retail investors will view this “next dip” as an excellent place to buy….and they will be right – for a couple weeks.

You want to play the correction?

Get short Japan.

Are You Trading Any Of This? – Why Not?

Forex Kong 13 Comments

This from November 14th:

I’d expect that “this time around” we’ll likely see the price of crude reverse here around 91.70 – 92.00 dollar area, with the usual correlating weaker USD.

I’m going to start running short-term technicals on stocks here soon, as well hope to offer those of you who “don’t trade forex directly” additional options and trading opportunities.

Dig up “oil related stocks” over the weekend and plan to get long.

Oil now touching 97.00

This from November 21st:

I’m not going to get into all the details here at the moment as……I imagine the majority of you could really care less.

“Just give us the trades Kong – what’s the trade Kong??”

The Australian Dollar is in real trouble here.

AUD has already come down considerably but…..I might see a “waterfall” coming – in the not so distant future.

AUD has fallen an additional 300 pips since.

This from December 1st:

In the simplest “minute to minute” sense I could easily bet you 1000 pesos that as the Nikkei trades lower, you can look forward to a lower open in the U.S

Nikkei now down -500 points as SP trades lower for 2 days in a row.

If these kinds of “market gems” aren’t providing you with sufficient information, to be placing profitable trades then I’ve got no idea what the hell you’re doing over there.

Granted you’ve got to be pretty quick these days to catch some of this but…..aside from the floating heads on your T.V just telling you to buy, buy , buy – how else are you framing “profitable” trade ideas?

I assume I need me to get more specific right?