trade strategies

Forex Markets Come Alive – USD Wash Out

Forex Kong 3 Comments

Wow.

A very large “gap up” here in the wee hours Sunday night before markets really kick off, and the U.S Dollar continues to surge higher against the E.U currencies.

One can’t imagine a single USD bear left on the planet.

Exactly as it should be…. before the thing tanks.

It’s amazing to me how public perception continues to view USD’s recent surge as “some indication” of a stronger U.S Economy.

How on Earth can The U.S Governement ( as well the crooks at The Fed – a private held bank ) handle the enormous contribution to the “serviceable debt load” ( remember The U.S is “officially broke”, with a continued rise in the “allowable debt ceiling” now just a given ) brought about by a stronger U.S Dollar?

It’s impossible. The Fed mandate is to “kill USD” at whatever costs, as to keep these balls in the air as long as they possibly can.

A strong U.S Dollar “kills” the U.S economy! As exports tank, and the amount/value of outstanding sovereign debt balloons “past” the balloon we already know to be.

Find me an “economist” who can make the arguement that “a strong U.S Dollar is good for America” and I’ll eat my hat.

A strong U.S Dollar represents everything the U.S Gov and The Federal Reserve fear most so….I encourage you to start looking for signs of reversal – as opposed to getting to excited.

 

 

Upside Targets Met – Thoughts On Jackson Hole

Forex Kong 10 Comments

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.

Trading The Week Ahead – Fed Speak Looms

Forex Kong 12 Comments

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.

 

George Soros Gets Short – Big Time

Forex Kong 4 Comments

I know it’s hard to take investment advice from a gorilla, and if you’ve been reading / following for any length of time you’re also well aware that I am almost “always” early ( and rarely ever late ) with my market calls / trading decisions.

But what about billionaire investor guru George Soros?

Would you ( obviously ) look to take his word over mine?

It seems legendary hedge fund billionaire George Soros might be souring in his view on the market outlook for US stocks, showing a 605% increase in his short S&P 500 position (through put options on 11.29 million shares of SPDR S&P 500 ETF) to $2.2 billion.

Even though he is still net long stocks, his short position on the S&P 500 (where he owns an option which will profit from a fall in stocks prices)  has now risen from 2.96% of his Soros Funds Management Portfolio to a whopping 16.65%.

So now we’ve got Goldman ( looking for Japan to implode ) George ( creating a massive position short SP 500 ) and myself aligned.

Another look at institutional activity ( big banks and brokerages ) over the past 6 months, while you’ve been buying and these guys have been selling to you.

Smart_Money

Smart_Money

 

If you want to trade with the big boys, it might make a bit of sense to consider “what these guys are up to” no?

Markets making their final bounce exactly as expected…all be it even weaker than originally suggested.

Heads up people! Sept is not that far off now.

 

 

Fourth Time's A Charm – The Market Decides

Forex Kong 2 Comments

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.

 

Long EUR/USD at 1.34 – Low Risk Entry

Forex Kong 2 Comments

Likely a pretty slow / sleepy to start to the week considering the slow summer months so…

Long EUR/USD still looks like the most reasonable play here for a bounce in risk / move lower in USD.

The JPY pairs are behaving “exactly as expected here” so for those interested in taking a shot ya…..just look to get your stops below those “prior near term lows” and let it be what it will be.

Commod currencies ( AUD / NZD and CAD ) would usually bounce along side risk as well but from what I can see / consider here these past days – they aren’t looking to make any major moves.

With AUD now “finally” showing its hand I think it’s safe to say these currencies have already began the larger “longer term move” in selling off / making the turn.

Sure we can expect a bounce but I really don’t think they’ll get to far.

We’ve identified that AUD has now rolled over on has high a time frame as the 4H – taking months to do so.

This kind of thing is not just “quickly reversed” so again……please consider any further “upside” in AUD to be “counter trend” and trade it accordingly.

I’m adding a couple contracts long EUR/USD here today, and will trade it actively should we see some volume and a solid move.

The benefit of staggering small orders over time should be noted here….as EUR/USD still sits around 1.34 – now going on a full week.

There is “no benefit” in jumping into a trade with your full position / max commitment during times like these, as you tie up capital that essentially just “sits there” – grinding you to shreds.

Forex moves a lot slower than most short-term traders initially understand ( getting caught up in the smaller time frame volatility / chop ) when “in reality” – price is going nowhere.

More in the Members Area

Forex_Kong_Face_Book

Forex_Kong_Face_Book

The Countdown Begins – Greed Finds Its End

Forex Kong 11 Comments

Well this is it people – the countdown begins.

You can count yourself as lucky – no…..”very lucky” as to have some idea where / when the merry-go-round stops spinning – this being the “final turn” before the party ends.

We’re down to a matter of weeks now – if not days.

I don’t generally speculate on such short-term movements, but with respect to “this one” having such significance to the longer term / larger trend – I feel it’s reasonable to put something out there.

Let’s give it a full two weeks, 14 days ( give or take a day here and there )  before anyone “greedy enough” to still find themselves “hanging around” – finds themselves wishing they’d taken note.

This will mark the “final surge” in global appetite for risk, and the final push towards the highs, before the historical repetition of the typical “boom and bust cycle” takes effect once again.

The Fed meeting at Jackson Hole ( scheduled for Aug 21st ) will undoubtedly be the trigger, as Yellen suggests “for the very first time” that indeed it’s time for “risk takers” to exercise caution, or to be blunt – get the hell outta the way as fast as they possibly can.

In a matter of weeks “nay-sayers” will be left holding the bag, giving each and every one of you ample time to act accordingly – if you do so choose.

Currency markets have already made the transition ( with commodity related currencies smashed as of late ) as they will always lead, with safe havens catching the bid – suggesting the turn is already well underway.

You don’t want to be the last one out the door, and their will be ample trading opportunities on the “other side of the mountain” if you can just manage to discipline yourself to “get out of this while you can” and not get caught holding.

The countdown has begun.

Best of luck to all of you.

 

 

Curreny Wars Turn To Trade Wars – People Next

Forex Kong 2 Comments

From a purely geopolitical point of view things just keep getting hotter.

An expected “bounce in risk” ( considering the oversold conditions ) not as forth coming here as Putin pushes back with sanctions of his own BANNING EUROPEAN FOOD IMPORTS ( something which will further push Europe into a triple-dip recession ).

“Take that” then Obama / EU cronies.

Apparently the big boys in Washington and The EU are both completely shocked and outraged ( yet imposing sanction of their own is always Ok – right? )

Putin will not be bullied, now with the “supposed recovery” in The EU ( ya right ) hanging in the balance. Like it has anything to do “what so ever” with Putin or Russia.

This is now coming to a head as the West continues to do anything possible to provoke the “calm cool and collected” Putin.

The U.S must make war in order to retain “reserve currency status” and continue with the Ponzi at whatever cost.

Putin’s latest action keeps the game in check, and provides hope for those of us ( most of the planets population ) who look forward to a day when The U.S looks to concentrate on its own “completely f#&ked up situation”, starts taking care of its “own people” and keeps its big fat “overly indebted nose” out of other people business.

You’d think the people of The Ukraine were “made of gold” considering the amount of interest from Washington! No wait…….gas/oil – that’s it.

Currency wars turn to trade wars…….

Trade wars turn to “people wars”.

Hey – what’s up fellow traders? I know the flow of “daily trading info” has dwindled to a certain degree here at the public blog as it’s now “hopping” in The Members Area!

Things are really looking to pick up here in coming days / weeks with “The Fed news” late August as well current weakness in global equities assuring fireworks to follow!

Come check it out at www.forexkong.net

 

 

 

Navigating The Turn – 2 Years Without Returns?

Forex Kong 5 Comments

Considering that markets have more or less “skyrocketed higher” for such an extended period of time that the majority of investors / traders are likely convinced that this is just the “new normal” ( I can’t stand that expression by the way – as it reeks of complacency and “idleness”) and that dips should be bought, on and on, no worries, The Fed has your back etc etc…

It’s easy to understand, as even heightened geopolitical concerns continue to take the back seat, along side lowered global GDP forecasts, poor data out of Japan etc..It could easily appear to the casual observer that “nothing” can get in the way of markets just moving higher, and even higher.

But what happens when the turn is made? I mean…..we all have to appreciate that “nothing goes up forever” right? Historically speaking we can see the typical “boom and bust cycle” usually manifests in a “5 year up and 2 year down” type scenario – and we’re well past the 5 year up mark.

As investors / traders it would completely foolish to “simply ignore” these longer term patterns as I can imagine most of you…..have likely been caught doing that a time or two before right?

Tech / boom / crash 2000 maybe? Credit / housing / crash of 2007 perhaps?

I find it highly unlikely that many of you successfully navigated these “significant turns” to continue generating profits during the 2 year period following these incredible crashes in risk.

Take a look:

Market_Tops_Forex_Kong

Market_Tops_Forex_Kong

Market tops can be seen almost “to the letter” on a 7 year cycle with 5 years up….and 2 years down, with us sitting “right at the max” of this “extended 5 year move higher” based solely in the “money printing efforts” made by Central Banks.

The idea of going through this again ( as why would this time be any different? ) can’t possibly be appealing. Considering where you are in life, and the prospects of a “full 2 years” with your portfolio drawndown considerably – not to mention the mental and psychological end of things – who needs the grief?

You’ve come this far with your investing / trading decisions while the “good times have been good” so…..why not extend the same effort when ” the good times are bad”?

Suggestions to follow….

 

Yellen Gonna Prick Yer Bubble – Aug 21st

Forex Kong Got something to say?

I encourage investors and traders of all asset classes to just take a minute here  – and listen up.

As much as I understand you’ve likely got a BBQ to tend to or perhaps a Birthday party for your dog, this will only take a second.

The annual Jackson Hole economic symposium, a three-day conference in Wyoming begins on Aug. 21st where The Fed meets each year for the continued discussions of world domination,fashion tips for bankers,entertainment news, and of course – monetary policy.

This time it’s going to be different. You need to get this on your radar.

Risking complete and total repute ( if they’ve still got any left at all ) The Fed is finally going to “actually say something” with respect to letting some of the “hot air” out of this ridiculous stock bubble.

With the bond buying set to “end in October” Yes! END IN OCTOBER! This will only give investors a few short months ( more like 6 weeks ) to re-evaluate their current holdings / consider taking profits and head for the exits in an “orderly fashion” as interest rates are set to rise much sooner than most have been anticipating.

Now you ask me well……”How does this affect me Kong?” “I own Apple! One of the greatest companies on Earth…I can’t imagine anything The Fed says having much to do with them?

Listen.No stock survives on its own accord when “global risk for appetite” wanes. No stock.

When large institutional investors ( those that dwarf your portfolio by 10,000x plus ) start looking at investments where “higher interest rates” come at them like a dull knifes in the kidneys – trust me.

They sell.

You can’t boil this down to single days trading, or even a single week or month when you are staring dead into the eyes of such a “fundamental shift in monetary policy” and it’s far-reaching effects.

Housing, equities, credit / loans, dog food, birthday presents, beer, Apple and “everything else on this planet” that has been pushed along by way of “massive injections of liquidity by Central Banks” will very soon feel the effect of having that taken away.

The Fed hopes the exit will be in an “orderly fashion” but you know yourself best. You’ll hang on “just like the guy next door” thinking you’ve got this figured out and that “just one more day er two” and then I’ll cash out – that’s what I’ll do. Smart.

Doesn’t sound “too orderly” if you and the guy next door, and of course every investor on your block are thinking the same way now does it?

Everybody always runs for the exits all at once…..and everyone is always, always too late.

Watch for news surrounding the Jackson Hole Meeting around August 21st. You won’t want to miss it.