Debt Ceiling Wednesday – Rate Hike Too?

Unfortunately….for those of you who’s investment and trading decisions depend solely on the grunt’s and groans of some smart mouthed Silverback with an attitude – I am busy today.

An esteemed  colleague and I have been summoned to the head offices of Google San Fran – where we will be building time machines, slipping microchips under our skin, and dancing through holographic simulations of the future. Jealousy will get you everywhere. I’ll post some pics later this week.

The Euro has continued higher – as expected. The U.S Dollar has taken its beating over the past few days and ( in my view ) will continue to get hammered –  as expected. And good ol’ gold has now put in its daily cycle low somewhere here around 1200.00 per ounce.

The current trade hypothesis still resting on the fact that “whatever happens” on Wednesday with respect to both interest rates rising and the U.S debt ceiling being reached “again”…The U.S Dollar sees its day, and continues South.

This “could” stretch another month if indeed the powers that be somehow appease markets – by what? Raising both interest rates AND raise the debt ceiling? This I truly have to see with my own eyes to truly get the full sense of just how “totally F’d” this system is.

I don’t particularly enjoy trading ahead of macro news events, but in the case will take it on the chin one way or another.

Good luck to all over the next 48 hours…you’ll likely need it.

Best advice…..don’t move a  muscle til ‘after the announcements on Wednesday….and even then – don’t get “trigger happy” Thursday morning either.

Forex_Kong_Space_Future

Forex_Kong_Space_Future

 

March Rate Hike – Already Priced In

The near term strength in The U.S Dollar ( although still no higher than 5 days ago…. ) is a ramp into the proposed rate hike and a clear “sell on the news” trade. It’s so obvious. Staring you right in the face as Gold’s near term slide looks to FINALLY end – in the congestion zone around 1200.00

Looks pretty clear to me, as per the previous post and information provided by James Rickards.  A “nominal rate hike” with stocks at all time highs ( when else could these bozos possibly even consider it ) and perhaps a short-term “extension” of this ridiculous euphoria….then reality, as both stocks and The U.S Dollar hit the skids.

  • USD/JPY should hit resistance around 114.85-114.95 and that will be that.
  • EUR/USD is perfectly fine here around 1.0525-1.055 ( as it’s STILL above 1.05 despite USD bounce )
  • AUD/JPY ( our “risk barometer” ) hasn’t even budged. No breakout. No nothin so…..

Don’t get too excited. Nothing has changed except of course –  further bad news on trade deficit with China and of course…..Trump instability / Tweetfest and generally nuttiness – still on the rise.

 

Forex_Kong_Cartoon

           Forex_Kong_Working

 

Don’t Panic – There Is Time To Prepare

These things take time so…let’s just take a minute and re group.

The entire blog / financial community at large is pretty much sitting at a stand still, with a couple of “ridiculous” factors and circumstances in play. Get a load of this….March 15th is not only the DAY the debt ceiling “freeze” does exactly that – but ALSO the day the Fed is widely expected to raise interest rates?? Can you wrap your head around that? Can you?

The dichotomy here is unprecedented. I see the debt ceiling biz being completely and totally “blacked out” in the main stream media, as it could very likely lead to government shutdown, as well as some pretty “snappy headlines out there” when the world at large is again reminded….The United States is again 100% flat broke.

I would assume “the powers that be” will keep things lofty moving into the 15th, then regardless of an interest rate hike or not….you’d have to expect our “long-awaited sell off / correction” to start, which will likely take us well past May ( as I also feel that SELL IN MAY will be in effect this year ).

In a broad sense I’d be looking to put some protection in place…start raising cash for a much better time and place to “jump back in”.

There is very likely one more  push higher later this year ( and it could very well be a whopper ) so maybe July/Aug would be a great time to grab that cash…..and put it back to use moving into the fall.

EUR longs looking good. NUGT pissing me off.

Forex_Kong

              Forex_Kong

Bitcoin Now – Same Price As 1 Oz. Gold

Anyone else find this absolutely amazing / hard to even comprehend?

From some article:

“” The Digital currency bitcoin jumped to a record high above $1,200 last Friday, as investors speculated the first bitcoin exchange-traded fund (ETF) to be issued in the United States is set to receive regulatory approval.

Traditional financial players have largely shunned the web-based “crytpocurrency,” viewing it as too volatile, complicated and risky, and doubting its inherent value.

 But bitcoin, invented in 2008, performed better than any other currency in every year since 2010 apart from 2014, when it was the worst-performing currency, and has added almost a quarter to its value so far this year. “”
Bitcoin Now As Valuable As Gold

Bitcoin Now As Valuable As Gold

Another indication of just how stretched / ridiculous things have gotten when a digital crypto-currencies “perceived value” has matched / surpassed the price of gold.
You don’t think this thing is just a tad over extended? 

Trading With Bazookas – Pea Shooters Get Smashed

So it all comes down to Trump’s speech tonight….as market participant stand like fat deer in the headlights..

Gold still the same. EUR/USD up nicely but still more or less the same, and the beast of all beasts NUGT takes the world for a diving lesson. Boom…talk about a stop run. These things don’t happen unless the big boys are making their moves. They can push price a couple bucks in a couple of hours without batting an eye….all the while your piddly 200 shares with a .50 cent stop get’s gobbled up. Multiply that by a couple 100,000 ( or million ) and you start to better understand just how difficult it is to “trade” with a “pea shooter”…when those on the other side of your trade carry billion dollar bazookas.

Forex_Kong_Bazooka

          Forex_Kong_Bazooka

You really don’t have much of a chance.

I find it incredibly ironic that the Trumpster is calling for some 54 billion more spending on Defence, and 1 Trillion on infrastructure when the country is already 100% flat busted / broke / bankrupt. As suggested by a few of the brightest minds in the comment section here at Kong –  sounds like the ol debt ceiling with just get raised, then raised again…then again. Where does the money come from?

Sounds like more money printing to me..but I thought the economy is expanding and there is now talk of the rate hike cycle beginning? Not.

QE will happen in ‘Merica again.

The printing presses can never stop printing.

Sell Your Stocks – The Holiday Is Over

I used to go  on and on about it, but with The Fed printing confetti each and everyday for the past 8 years – it didn’t really matter. The United States is 100% totally broke / Greece style / Flat out busted.

You guys remember that thing called “the debt ceiling”? Well……March 15th – Here we go again…only this time it’s different.

March 15th is the day that the “debt ceiling holiday” that Obama and Boehner put together right before the last election in October of 2015 expires.

The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash. The U.S is burning cash at a $75 billion a month rate.

By summer, they will be out of cash. Totally out of cash.

The holiday is over.

You think I’m joking about this….you don’t take this seriously, and you bury your head in the sand –  I won’t be very happy.

Gold up = Fear = USD and U.S Stocks down HARD.

http://www.usdebtclock.org

 

 

You Are So Smart – Kong A Fool For Asking

You gotta love it.

Thousands of visitors per day and I don’t get a single comment / opinion / view on the recent “Trump and the U.S Dollar” post. Not a single one. All the while dorks with nothing better to do,  actually take the time to comment / call me out – insinuating that I’m NOT in Cabo ( actually now at the all inclusive Barcelo in San Jose Del Cabo ) and that for whatever reason…..I’m lying about it. Again you gotta love it.

american gorilla

                                                                            American Gorilla

Every red blooded American has a view on Trump ( good or bad ) as I see them here…flocking to the televisions like bands of hypno-rats…arguing about the colour of his tie and wether or not Melania has fake breasts. Deep man. Deep.

I find it absolutely fascinating that people who likely consider themselves pretty damn smart, have absolutely no clue how the value of the world’s most widely held / reserve currency might affect their investments / lives / future. No clue.

What’s that Kong? You bashing my U.S Dollar? Fork you dude….that’s ‘Merica you talkin ’bout! My American Dollar! Mine ya’ll! Mine!

purchasing-power-of-dollar-chart-2015

Go stuff yourself. This is a currency trading blog people. Check yer ego’s and hand guns at the door please.

In any case….perhaps some casual reading over the weekend.

http://www.zerohedge.com/article/history-worlds-reserve-currency-ancient-greece-today

https://www.thebalance.com/what-is-a-reserve-currency-1978926

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

I am “officially” on holidays.

 

Gold Futures – Up 15 Bucks Overnight

Gold is up another 15 Dollars overnight so……one can only assume you’ve missed that train.

Like I’ve always said….I’d much rather be early than late, as chasing trades can make your head spin.

The future is looking very bright for gold as “global uncertainty” escalates and “global appetite for risk” wanes. Unfortunately you just can’t have it both ways…unless of course you decide to pick up gold as a hedge ( meaning you purchase an asset that is set to move higher while holding on to assets moving lower ) and hang on to those dividend payers during the long and arduous drawdown coming soon to a theatre near you. I did this once.

I will never do it again.

Kong Is Golden

Kong Is Golden

As a relatively young trader / investor type…I can’t bear the thought of having my money tied up so tight I can’t breathe. Can’t move. Can’t sleep or eat just watching the value of my assets going down, down, down, down further….then down some more. I think we all know this feeling to a certain degree. It can certainly make sense for people a tad older than I as moving theses assets around / pulling apart portfolios and rebuilding again is a bit of a pain but….at least in my view – nothing compared to 3 straight down days -300 on Dow……trapped like a rat, then contemplation of either selling at a loss or holding on for an even larger loss.

Fear and greed baby…..that’s all there is too it. Ride that train in either direction…just don’t miss your stop.

All current trades looking golden. EUR right on. USD falling. Gold on the move.

Canopy Growth Corp – Marijuana Soon Legal in Canada

Canada has recently released it’s plan to formally legalize the sale of Marijuana. The Marijuana related stocks have already taken off, but there are literally “opportunities abound” here in coming months. I strongly recommend that you start doing some company research NOW as these things are set for “stellar growth” through 2017.

Canopy Growth Corp being the largest player in the sector.

Canopy_Growth_Corp_Chart

Canopy_Growth_Corp_Chart

These companies ( and stocks ) are currently on fire, with the initial rush now over….providing a fantastic pullback and entry opportunity coming here soon.

Start getting a watch list together / ask me for further suggestions as these things should shoot for the moon as Canada finalizes it’s plan.

This is happening. This will happen in 2017.

USD Topping Out? – Place Orders Underneath

The U.S Dollar has now reached “another” serious area of resistance here around 100.00 / 99.85

 

usd_topping_out

usd_topping_out

Inversely gold and silver mining stocks ( and likely the entire metals complex ) look to be putting in a serious low here ( as suggested in my previous post ).

As I’ve suggested time and time again….the absolute best way to play these “potential turns” is to place your orders some 50 – 100 pips “below” current price action….or in the case of “getting long EUR/USD” some 50 – 100 pips “above”. This way…..you don’t get picked up if price moves against you ( nothing ventured nothing gained right? ) OR you do get picked up on momentum moving in your direction.

Another way to do this is to place your order “above or below” the previous days high/low ( as seen by the bottom or top of the candle of the previous day ) – keeping yourself out-of-the-way of intra day fluctuations, but still leaving you tonnes of room for profit – should price action  move in your direction. The key is to get into the trade “on momentum” and not get caught in the daily volatility.

You can’t pick an exact price. You never can. No blog, no investment consultant, no snake oil salesman can call it that close – it’s impossible when you consider we are talking about moves in a currency as small as 1/100 of a cent!

As well…..if you are looking for further confirmation / theory that perhaps things are ready to turn lower….take a look at Apple ( AAPL )

If the entire planet is so “hell-bent on buying U.S Equities” – How come industry leaders like Apple look like shit?