trade strategies

Selling At The Close? – So We'll See

Forex Kong 5 Comments

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.

Gold and USD – Passing In The Night

Forex Kong 8 Comments

With the expected move out of USD coming together over night, we’ve seen more than enough follow through here to confirm what was suggested yesterday.

Stocks won’t hang on here, and I expect the power of the U.S Dollar “repatriation trade” to flatten gold here as well.

For those of you “investor types” I imagine you’ve come this far so a couple more months ( and perhaps further drawdown ) as gold slides into “its final leg lower” likely won’t kill you.

However for those looking at gold,silver and the related mining stocks as a trade….unfortunately – I see lower prices – before higher.

This is no “small blip” as far as USD is concerned, likely marking a significant turn “not only in the currency” but “in all” that it affects.

So far only the European currencies have taken the initial hit, but it won’t be too long now til we see the Canadian Dollar, as well Australian and New Zealand follow suit, and I’m not talking about a trade here……I’m talking about a major shift over the medium and even long-term investment horizons.

Top call still very much so “intact” here as of today – with the “Members of Kong” doing very nicely in our first month working together. Feel free to poke around the members site, and hey….you can even join us if you’d like. I’d take an additional 20 if you want to contact me over the weekend at : [email protected]

Have a great weekend everyone! It’s sun sun sunshine here!

 

 

Next Week's Market Mover – Guaranteed

Forex Kong Got something to say?

It’s now become clear me, what the “media” will sight as the “catalyst” next week – justifying the continued fall of U.S Equity prices.

Even with Putin’s suggestion to “delay” the referendum vote this weekend in Eastern Ukraine ( as Putin already know’s the people of Eastern Ukraine will vote to separate ), the people are moving “full steam ahead” with Sunday’s vote – right on track.

Once the people of Eastern Ukraine vote in favor of separating ( which undoubtedly they will ) this will then put tremendous pressure on Putin to then “step up and protect them”, as opposed to “quietly sitting on the sidelines” as he has thus far.

The dynamic of Eastern Ukraine voting to separate may actually “force” Putin to move forward into the area and “protect those citizens” who’ve will have then clearly pledged their allegiance to Mother Russia. Putin doesn’t want war, and has had absolutely “no intentions of invading Ukraine” even “suggesting” that they delay the vote.

The eager citizens of Eastern Ukraine ( passionate and enthusiastic to join Russia ) may inadvertently put their new leader in a precarious position.

On release of the news some time next week, you can bet your bottom dollar “Russia invades Ukraine” news plastered ‘cross American T.V screens coast to coast, where in reality Russians living in Eastern Ukraine will likely be the ones under attack by Washington’s “puppet army” from Kiev.

Leave the people of Eastern Ukraine alone “Obomba”, and watch these people make this decision for themselves.

Putin has absolutely “nothing” to do with it.

Stocks Up And USD Down – You Can't Have Both

Forex Kong 3 Comments

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.

Eastern Ukraine To Separate – Not In U.S News!

Forex Kong 10 Comments

I can’t believe western news coverage of what’s happening in Ukraine. Outrageous.

Have you not heard the “real news”? Unreal.

The people of East Ukraine’s “Donetsk Region” are holding a referendum vote this coming weekend, with every likelihood of ” overwhelming support” to separate from Western Ukraine, and become another republic of Russia as did Crimea some weeks ago!

These people don’t want to be part of Washington’s circus side-show in Kiev! They don’t want to fall under the rule of the money hungry over lords from the West!

There is no “Russian army” killing the innocent people of Ukraine, no force, no “invasion”! The people of Eastern Ukraine are trying to “leave”! They want to separate! No war / guns needed!

The only group looking to take this out of the people’s hands ( who should have, and “will have” the right to decide for themselves ) is the U.S!

I can’t stress enough the significance of Ukraine and what this represents from a global perspective, and in a matter of days you’ll get to see it for yourself, as the people of Eastern Ukraine vote “whole heartedly” to leave Ukraine and join Mother Russia.

Once again O”bomb”a will be made a fool of ( as he well should be ) continually poking his nose where it most certainly doesn’t belong.

The people of East Ukraine can decide for themselves, and trust me, “not” with guns pointed to their heads.

They want to separate!

USD making the turn here exactly as expected. Markets to continue lower – as expected.

More real time trade chat and daily strategy at: www.forexkong.net

Because You're Mine – I Walk The Line

Forex Kong 1 Comment

Another day……another “year stripped from your life” with respect to the amount of stress / tension / anxiety and general frustration you “harbor and absorb” as a trader. I imagine investors as well – feeling a bit of a pinch as “indecision” continues to rule supreme.

Monday’s are no time for decision-making anyway, and should just as quickly be stricken from your future trading plans. Don’t look to trade “jack shit” on Monday. Period.

1876. Fudge.

A bit of a mouthful but..for the number of times I’ve seen it appear as a significant level in SP 500 , I will now consider it for the name of my future pet, be it of this planet or another – human, canine or other.

This seriously can’t go on much longer as nothing moves in a straight line ( however flat ) forever.

The endless debate. Up or down – tiring to say the least.

My take? As wacky as it may be?

Time and price intersect when the “time” and “price” are right ( a topic for another day ).

I think we’ve got our price so…..now we’ve just got to let “time” do it’s thing – and all will be clear.

Check out “risk in general” as seen over the past 4 months via JPY / The Japanese Yen futures.

 

JPY_Trading_Range_Forex_Kong

JPY_Trading_Range_Forex_Kong

The Fed’s got it that “tightening” is now the path forward ( if you actually believe that ) so….this current talk of The European Central Bank “now” looking at QE?? As well the Bank of Japan looking at “further QE”??

Something doesn’t quite fit if you’ve any idea how this all fits together…

The Central Banks need “coordinated effort” to keep these balls in the air so…we’ve got to see this resolve shortly as the message is unclear.

Is the punchbowl getting refilled? Or is the party finally over?

I can assure you ……another couple of points in the SP is “no indication”.

Ugly “two day candle formations” across the board as clearly…both bulls and bears take another hit. “Time” can grind your mind and your account to pieces….and they’ve got all the time in the world. Stay safe. Make no big decisions, protect profits and at least “imagine” how you might consider making money in a bear market.

 

 

Conviction Market Call – Where To Next?

Forex Kong 3 Comments

Speculation as to “where markets are going next” is running rampid across the various forex, stock trading, news outlets and financial blogs these days, with a pretty equal split between both the bulls and the bears.

And for good reason as….It’s an absolute meat grinder out there.

This being said “caution” is likely the best suggestion anyone can make while markets continue to “sit on the fence” but you know…..you’ve really got to “go with something” as lack of conviction won’t really do much for you either.

Reducing position size or going to a cash position is never the wrong thing to do, so there’s always that….but again – we’re looking to “make some money here” so if it’s a bit of “hard work that’s required” well then?….We’re gonna do it!

I’m going to simplify and keep this short.

The largest QE program on the planet ( coming out of Japan )  is currently doing “nothing” to elevate Japanese stocks as the Nikkei “will” continue to fall here. This is significant in that…if the QE money isn’t doing it anymore ( as well consider the QE money in the U.S now evaporating monthly ) what on Earth would it take to continue pushing higher?

Nikkei_May_04_Forex_Kong

Nikkei_May_04_Forex_Kong

I believe that the “near term” wind has certainly come out of the sails, as U.S “momo names” have also taken their “first leg down”, with Twitter cut in half ( from 75.00 – 37.50 ) and Yelp soon to follow.

The analysis / theory is simple…..just follow the money.

Who’s printing the most money? Where’s that money going?

Do you seriously think the “world at large” is rushing to the “supposed safety” of U.S Bonds for anything more than a short-term trade?

I don’t….wait – I do…..no…..wait ( U.S Bonds are gonna top out here pronto ).

These things take time yes. It’s a grind yes, but there are many excellent trades setting up for those who are patient, and for those willing to do a little work.

I remain short the Australian Dollar ( risk currency ) as well am keeping a very watchful eye on all JPY pairs as these “will” move fast and hard with further weakness coming in Japanese stocks.

I continue to look for a stronger US Dollar on the “repatriation trade” and see us at a significant turning point here. Should USD fall lower it will only mean the trade has been “put off” a touch longer as much further weakness in USD will have some larger “ripple effects” with our friends across the pond.

I don’t believe the U.S can allow USD ( if they can really help it remains to be seen ) to fall much further without risking a serious, serious knock to whatever credibility it still has left.

Lots of great stuff on tap this week, so good luck everyone!

 

 

 

 

A Chart – For Those Evaluating Risk

Forex Kong 3 Comments

I’ve made light of it before as it’s a handy thing for “non forex traders” to also consider keeping in mind.

The currency pair AUD/JPY has long ago been directly associated with the “risk on” trade, as traders simply borrow ( sell ) Yen ( as the base lending rate in Japan is practically 0% ), then invest (buy) the same money in a higher yielding currency such as AUD ( base interest rate currently paying 2.5% )

It’s essentially free money, and rests pretty much as “the backbone” for most major banks – as far as  forex strategy is concerned.

When this trade “unwinds” ( when risk appetite wanes, and banks and major investors begin to seek “safety” ) you certainly don’t want to be on the other side of it – as the move is nothing short of amazing.

Lets take a look at the “unwind” back in 2008, and consider where we’re at with the pair today.

 

AUD_JPY_Forex_Kong_May_1_2014

AUD_JPY_Forex_Kong_May_1_2014

The pair “peaked” right along side “peak activity” surrounding the Bank of Japans massive QE program and equally massive dilution of the Yen, sometime “around this time” a full year ago.

We can see that it’s done very little since, as “risk” apparently rages on ( as seen via U.S Equity prices ) in the West.

A “swing high” here marking a “lower high” on a monthly chart would prove to be a very, very powerful technical sign that the turn is indeed near, as big banks and institutions will have used these past few months to quietly whittle away, adding to positions here, selling a bit there, getting themselves into position slowly as to not turn price against them with any large-scale moves.

Until of course the large-scale moves commence ( as seen via the “red candle waterfall” of 2008 ) where the big boys have already gotten out  and retail investors “unknowing” get caught holding the bag.

One has to consider that “if the Big Banks are running the show” ( as we all know they are ) – don’t you think they’ve got the info / knowledge / plans in place long before we ever hear of them?

Do you think the biggest players on the planet get “caught” suddenly realizing that things are turning? Or perhaps because they missed a bit on CNBC? There is absolutely 0% chance of this as it’s this is  “their market” and the house always wins.

Equities in the West continue to grind as the turn has already been realized in Japan. These past 4 or 5 days are again what we call “distribution days” as big players unload to those late to the party, in preparation for the next “real money to be made” on the short side of town. Currency wise a large and solid “short AUD position” has been building for quite some time, as other “risk off trades” slowly fall into place day-to-day.

 

Very relaxed here as positioning is well underway and the tiny squiggles don’t really mean much at this point.

I can’t see how unemployment data out of the U.S ( 344,000 more last week ) could be helping anyone with their medium and longer term trade ideas, but I’d love to hear the arguement.

Good luck everyone, and have a good weekend.

 

 

If It's "Sell" On Yellen – You'll Know For Sure

Forex Kong 4 Comments

If it’s “sell” on Yellen you’ll know for certain that the “machines that be” have most certainly flipped the switch from “buy” to “sell”.

I can assure you “anything” currently in play with respect to the big boys ( and I ) positioning for the “very near future” is already in full motion.

You have to appreciate how long it takes for Central Banks or other large institutional players to “put on” or “take off” positions SO LARGE, that it takes weeks “if not months” to slowly leg in as to not move price to quickly.

If you think “anyone” with an institutional influence is “sitting around waiting” for more clambering from The Fed this afternoon – you are sadly, sadly mistaken.

This move is well underway as seen via currency markets some weeks ago.

Yellen has absolutely “nothing” to do with what’s “already” going on.

Let retail take risk for a final “blip” higher ( as I would gladly welcome that ) as anything higher only represents better opportunity to get short.

We’re already in position. Check out the Members Area at: http://www.forexkong.net/getting-started-start-here/

Good luck to all, and watch out for that “bad weather”.

Markets On The Cusp – USD Shakeout

Forex Kong 9 Comments

We’re looking for a stronger dollar these days, as the reality of continued Fed tapering and a generally disappointing earnings season ( in my opinion ) begin to take their toll.

As we’ve discussed here in the past, the general effect of tightening the money supply “eventually” leads to higher lending rates/increased borrowing costs, pinching corporate earnings and pressuring stock valuations.

I think it’s fair to say we’ve most certainly seen the “mojo” taken out of the “momo” stocks in the tech sector already, as well the $BKX Bank Index ( which I follow as an additional “bellweather” for U.S Equity strength ) as it “continues” to on its path of “lower highs” and “lower lows”.

Via currencies I’ve been positioned “generally short” for several weeks now seeing AUD/JPY top out around 94.50 as well The New Zealand Dollar finally rolling over. CAD took its last breath here in just the past two days essentially “completing the trio” of risk related currencies to begin their journeys downward.

Pushing through the last remaining day or two of chop in USD, opens the flood gates “wide” to a plethora of excellent “medium term” trade opportunities long the safe havens, and short the commods.

My expectation is to see The Nikkei ( The Japanese Stock Index ) continue to lead markets “decidedly lower” ( and I’m talking like….Nikkei at 11,500 now at 14,500 type lower ) as the general lay of the land has obviously already shifted to a “risk off” / safety seeking environment.

For those interested in more specific and detailed “trade ideas”, regular “intermarket analysis” as well deeper learning / understanding of forex markets – please join us at www.forexkong.net as our trading community continues to grow.