Blah, blah blah……as once again The U.S Fed and Bank Of Japan keep markets on their toes.
Tomorrow we “should” hear from both, which sets up a pretty tricky scenario if you are thinking about placing any trades prior to the announcements. That’s not how I roll, although…….I am still holding every single trade entered like – 10 days ago.
Conviction is great, as I am 100% certain that The U.S Fed will not be raising interest rates this close to the election but we can never EVER count on The Bank Of Japan to do what we expect. In fact…there have been several times in the past where The BOJ has surprised markets – big time.
You are aware that the BOJ and The U.S Fed have been working together on this “propped up market” for years now right? Taking turns cranking up the printing presses as to keep these fake dollars / yen rolling into markets?
BOJ takes the next kick at the can
This coordinated effort is widely known….yet poorly understood.
It would not shock me in the slightest to hear Japan “beefing up” its easing and money printing efforts in order to keep the balls in the air a while longer as…..Japan is deep DEEP in The Fed’s pocket.
If Japan pulls the trigger ( allowing The U.S off the hook ) expect markets to rally…..otherwise…we continue flat across the top. Flat across the top until the elections are out of the way…then down.
Further currency trading prior to tomorrow’s announcements is plain stupid.
The EUR and The U.S Dollar are simply the two most widely held currencies on the planet. This being said….you can usually generalize that weakness in one suggests strength in the other ¨regardless¨ of the news. Seriously…….all news aside you can generally just look at EUR and USD as ïnterchangeable¨ – trading nearly 100% correlated. Tit for tat.
So……..with further consideration that USD has now reached a major inflection point ( and is headed decidedly lower ) we can also assume that EUR is set to bottom. Fair assumption?
Now you start looking at EUR pairs specifically and ask yourself……which currencies will I see the largest moves in against EUR?? Well…….we can also assume that commodity related currencies take a hit when risk appetite subsides right? Currencies like AUD and NZD ( Australian and New Zealand ) generally fall when risk appetite wains so……long EUR and short AUD?
I’m watching exotic pairs such as EUR/AUD ( which also falls into my ¨faceripper¨ category, being that this thing is extremely volatile, and ready to blow up in your face at any moment ). You can’t trade this thing…..but you can sit on the sidelines and observe.
I´m watching this pair as of today…..not trading it – YET!
Facerippers are nuts. These currency pairs will clean out your account without a moments notice so please – do not try this at home! Watch this pair……watch for the coorelation to ¨risk on vs risk off¨.
There’s little more to be said here this morning – as The U.S Dollar plummets nearly a full 1%, down a full 100 points from 96.00.
Absolute Dollar devastation as both GBP as well EUR make 100 point gains, USD/JPY hit’s resistance and dumps….and our little gaggle of gold and silver miners now up 7-9% since entry.
I’m obviously short as “sh&%t”…and very well positioned ahead of the move. So what could you have done better perhaps?
You “could” have plotted areas of support and resistance on your charts “long before this move was made”, and have been fully prepared with your orders
You “could” have created 3 small orders and “legged in” over the previous 3-5 days, ensuring and average price and not betting the farm on a single entry.
You “could” have shut of your T.V, eliminated the noise, and gotten back to your charting…where you would have clearly seen the set up coming.
You “could” have opened your mind to the “other side of the trade” ( vs the general main stream media ) and taken advantage of some pretty early indications ( here at the blog ) that things where about to turn.
There it is…..likely the best possible entry / trade tip / suggestion that you’ve seen laid out for you over the last several days…no stress….no pressure. No chasing markets in panic…no text marathon’s with your broker…just proper planning and execution. A very well placed trade, looking to become a very VERY profitable trade.
So what are you gonna do now? Seriously………..what are you gonna do now?
As I’m sure you’ve been following the “bold call” earlier this week..our dear friend U.S Dollar “has indeed reached the 96.00 level”, and as suggested – has clearly been rejected.
On has to appreciate not only the timing and levels, but the “patience required” in planning your trades, then executing properly.
This trade “short USD” was outlined back on Monday.
This is the key difference in “planning a trade” as opposed to waking up early one morning, and “impulsively taking a trade” cuz of something you’ve heard / seen on the T.V. This generally has you “chasing markets” and usually ends in a loss.
Broadstroke……this has USD headed lower as expected. and will also likely mark a “daily cycle low” for both Gold and Silver ( have you bought your few small mining companies yet? ) providing these with several days upside to follow.
Perhaps consider a shot at EXK and / or GPL for some silver plays ( fun ones…….very cheap ).
Have at it people. If this hasn’t put you in a decent spot to make a buck er two shit……..what else do you need?
Call it 96.50 or 97.00 – I mean seriously. We are talking about 1/100th of a cent difference in the value of the currency so…..take your decimal points and go blow it. Its far bigger than that.
Forex is highly leveraged, and great deals of money can be made on even the smallest of moves but…..thats not the reason I trade forex.
I trade forex because it’s the ¨window to our world¨. Economically. Geo politically. Nothing goes on in any other market, any other asset class that isn’t first reflected in the currency market.
The trick is only to understand it.
Forex trades 24 hours a day…no pre market bullshit….no after market earnings announcements ( ever wonder why they do that? ). You don´t wake up in the morning to find out your stock has traded down 23 bucks during the hours that you´ve been sleeping….laying there – powerless.
You can stay in the game – out on the field 24 hours a day!
I like that as…….I like to play…and I´m very good at it.
USD in the 96.00 area suggests a serious inflection point. I won´t get into the fine details….just sticking to the plan.
You can play “short USD” in any number of ways….and when considering “diversification” ( as any knowledgeable trader / investor should! ) why not throw a couple of bux towards those good ol gold and silver mining stocks.
As a “token” of my current plans moving forward “as planned”….I am placing the first of many orders “long gold and silver” ( inverse to short U.S Dollar ) here today.
Long IMG at 5.00 Even.
The currency side of things plays out pretty simply.
USD goes down and the largest gains are seen in pairs such as short USD/JPY and long GBP/USD, EUR/USD.
When risk comes off “in general” ( which will also happen for a time here ) even bigger gains are found in getting long JPY against AUD, NZD and CAD.
I expect U.S Equity markets to fall “along side” USD as well so – there’s a head scratcher for ya! Kong ! I thought that if U.S Equities get “sold” then money should just pour back into the U.S Dollar no???
The big boys are already out of their “long dollar trades” and it will be JPY that rises as U.S Equity markets sell off.
JPY is the funding currency for this gong show, and you will see it hit the stratosphere when equities are sold.
You know it’s funny…..human beings have become so lazy these days…so passive so….sedentary – they really just want to be told whats what. What’s going to happen. What to think. What to do.
Just lay it out for me in a couple of bold headlines and perhaps a small snippet of information please ( as anything more would simply be “just too much”. ) No need to get into any “great detail” – just tell me what to do so I cam make lots of money, and most importantly…think about very little.
Don’t raise any controversy, don’t rock the boat…don’t make me “question anything”. I only want sound, actionable information….and it MUST make me money while I do “as close to nothing” as humanly possible.
This is what is going to happen to the U.S Dollar, and this is what I am doing about it.
So there it is.
About as straight up / straight forward as it gets these days….right down to the levels, and the days. Is This gonna work for you, or would you also prefer that I push the buy and sell buttons for you too?
The last little “spike” in USD offers is yet another fantastic opportunity to “sell the rips” not “buy the dips” as we are in a very solid and confirmed daily downtrend.
USD Trend is down – the trade is short. This is a rip t be sold.
I’d been sitting on the sidelines for quite some time ( as markets continued to astound ) until just recently taking aim at a couple nice set ups. Here’s a look back a couple of weeks. Let’s see how ‘l Kong made out.
Patience always the key when trading. You really need to plan your attack and not get caught chasing markets. In any case…pleased to be back in action. Looking forward to my next adventure. Stay tuned folks, and if there is anyone here from Chile ( Yes the country of Chile…in South America yes ) please drop me a line.
Not to say there isn’t considerable medium / long-term opportunity in the miners ( cuz there is ! ) – you may have missed the boat.
This chart will make your head spin as……the gains have been nuts. Even Gary Savage ( apparently ) got this one right.
Short term – I would encourage you to just stay put, but as I’ve always said – Get this stuff on your radar! You need to identify levels, plot support and resistance on your charts, keep a pad of paper by the computer for [email protected]*k sake!
Consider “post election” as a fantastic time to enter, as we are obviously over extended here. But get a list together! Make a plan! It won’t matter if the people of the Unite States vote for – the puppet or the clown.
Gold/Silver will both head for the moon as the entire planet completely freaks out.