Winning Trades Update – USD, Gold and Silver

Obviously the short USD trades are now in the money as The U.S Dollar continues to weaken. The mining trades have been on fire with GPL, IMG and now NUGT ( purchased yesterday ).

It may at first appear boring to just sit around and watch a single asset  / asset class ( currencies and USD ) but one has to consider “just how much revolves around the value of USD” – as U.S equities and global commodities trade in this currency.

Correlations can always be found with respect to the “value of USD” and the price of “things” on planet Earth. Thus far we’ve really only seen the beginning of a much larger and expected fall in USD.

Perhaps this is where some of you stock traders can find a solid reason to follow currency markets closely. Also with consideration that JPY ( the Japanese Yen ) trades “in tandem with risk”. When JPY value moves lower – stocks move higher. JPY moving higher ( on repatriation of currency flooding back to Japan ) – stocks move lower.

That’s just how it is!

You can easily check currency pairs at www.stockcharts.com by typing the symbols like this: $usdjpy, $audusd, $cadjpy etc… just dont forget to add the “$”.

I will now focus on JPY as a turn in “global appetite for risk” will soon see JPY on the rise against nearly every other currency on the planet. That means “shorting” currency pairs such as AUD/JPY ( meaning….I a shorting the value of Aussie Dollar “vs” the value of JPY) where in AUD will fall and JPY will rise.

Hope it helps everyone!

Forex Kong Winning Trades

 

 

 

 

Stocks And Currencies – Major Shake In 2017

It clearly looks like this will stretch into the new year…….before we see a major turn in both currency and equities markets. Money is pouring into silver and gold with the gold miners ( and gold complex in general ) finally showing us not only the daily cycle low….but quite possibly the “yearly” cycle low as well.

 

Gold_Miners_Bottomed

Gold_Miners_Bottomed

This makes for some pretty solid trades as……The EUR will bottom along side gold and silver, the U.S Dollar slowly rolls over for extended losses and equities make a solid correction.

Sound about right? This is EXACTLY how I am positioned with short trades in USD/JPY, long silver and gold miners ( GPL bought at 1.27 ) as well limping into further “long JPY” ideas / shorting the commods ( AUD,NZD and CAD ) with marijuana companies holding tough.

End of the year selling, and who knows what other “market shenanigans” playing out these last days of 2016. I see a large-scale correction first half of January 2017.

USD/JPY – Risk Off – Trade Accordingly

The currency pair USD/JPY ( U.S Dollar vs Japanese Yen ) is a bellwether for “risk appetite” in markets. Simply put, when  the currency pair rises…..risk is ON. When the currency pair falls – RISK OFF.

Risk ON meaning……the general investing community is in “buy mode”. Risk OFF meaning – “sell mode”.

USD/JPY – Weekly Chart.

usd_jpy_topped_out

usd_jpy_topped_out

I’ll let you be the judge….as “per always” – you can lead a horse to water – but you can’t make’em drink.

This chart looks terrible. After months of consolidation( June, July, August, September ) and now with the recent run up into “and after” the U.S election, USD/JPY finds itself at an interesting junction. You don’t see this in equity/stock markets as they only give you a tiny glint into the real world economy ( if any insight at all, considering the money printing and Wall St. corruption ) but…..currencies don’t lie.

USD/JPY will very soon turn. Global stock markets soon to follow so I challenge you to consider….

Are your assets currently protected? Stop losses? Mental stop losses? Greed got you by the balls? Any notion “what so ever” that…..tides may turn?

I’ve softened over these past years as….the Central Banks have made it impossible for the average “at home investor” to even consider things moving lower. I’ve “sung to the choir” at least a handful of times over the past years…encouraging my followers to exercise caution. I’ve been right at times….and horribly wrong at times.

This is another one of those times.

Caution warranted. Nothing more.

 

 

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?

EUR/USD – USD And Gold – Alien Knowledge

A simple correlation – the price of commodities and the U.S Dollar.

Gold being priced in USD obviously.

As the “value” of The U.S dollar rises – Gold price goes down. When the value of USD falls….one would expect the inverse in gold. Gold moves higher as USD falls. All good?

So you should find it interesting then, that over the past few days ( since giving the green light to buy gold ) The U.S Dollar has remained strong. Suggesting to myself at least…..that “even with a relatively strong dollar” the price of gold and silver related stocks have not only remained buoyant, but have made some pretty sold gains over the past few days.

I bought IMG at 4.68 a couple days ago –  Now sitting at 5.29 – All the while USD has continued to move higher.

So what gives Kong? How can the value of the U.S Dollar keep rising AS WELL as Gold and related names?

Answer: An intermediate bottom in Gold.

I’m not talking about a nice little dip to buy, or a quick little stock tip to make you a couple extra bucks for beer….I’m talking about a large scale “fundamental shift in money flow” where the big boys are already well in position. Fully prepared for the U.S Dollar to fall – just that couple of steps ahead of you as…….you still see relative strength in USD even while the big money keeps scooping up Gold.

These large-scale “intermediate turns” don’t play out in a single day.

This will be short-lived, and here is why:

The Euro only further confirms the move currently in play as……it’s now very VERY close to bottoming as well.

Currencies don’t lie. You can’t have EUR and USD going up at the same time!

eur_bottoming_at_1-09

eur_bottoming_at_1-09

So the trade at hand is as follows. Long Gold / Silver and the miners NOW…….and short USD ( long EUR ) here in coming days…once this turn shows itself to the masses.

These “big turns” take weeks and even months for the big boys to build positions, so you don’t always see typical correlations playing out “minute to minute”. It’s my firm belief that the entire year of 2016 has essentially had the big money distributing stock to retail investors….while they quietly and patiently unload USD and scoop up Gold.

Make no mistake. It’s “Dollar Short Time” again here soon, with large gains planned in EUR longs, and a solid investment in Gold.

You think it’s backwards. You don’t think it makes sense but…….haven’t you been reading / lurking here long enough to know better by now? Once you throw currencies into your watch lists, and basket of tools to draw from…you can see things much clearer.

Big moves coming post election.

 

Why Are Markets Trading Sideways?

In a general sense……you can’t do shit when markets continue to trade sideways.

It’s very difficult for new traders as……you still feel that you “must keep trading” in order to keep money coming in. Trades go nowhere, you get frustrated…..then you make mistakes. Costly mistakes.

Taking a quick look at the Dow ( going back a few months ) we can see at least the past 8 weeks as virtually “unchanged”. Marketing stuck in the mud a full 8 weeks now.

 

dow_trading_sideways_for_months

dow_trading_sideways_for_months

You can’t “really” trade this, as this small amount of movement leaves little room for profit – and timing entries becomes paramount. You need to recognize it for what it is….and accept it. Then your trades / trading will improve.

I don’t really expect this to change until AFTER the U.S Election / Gong Show finally winds up in November, and will be planning trades accordingly. Smaller orders…lower expectation. More planning for the larger moves expected post elections.

It is what it is…..you’ve just got to learn to recognize it sooner.

 

 

 

 

Understanding USD/JPY – You Know You Need To

With Japan now out of the way….we can clearly see that markets don’t dig it. The Yen is powering higher which is the absolute last thing Japan would like to see.

A strong Yen is terrible for Japan ( as a strong currency is for any nation these days ) and suggests that money is actually flowing “out” of markets – back to the place where it was originally borrowed at 0%.

asimo-is-selling-his-u-s-stocks

asimo-is-selling-his-u-s-stocks

Think about it.

Let’s say you went nuts and borrowed thousands of dollars when the interest rate was 0%, then invested it in U.S Equities hoping you could make a buck. Months later your U.S Equities trades are flat at best, but even more likely sitting at a loss. Then you figure out……hey wait a minute – if we get an interest rate hike here in The States…this market is gonna tank! You sit there thinking…..man I better get the hell out of here, or I am gonna get killed.

Imagine if they actually DO raise rates in the U.S today? You are hooooooped!

How will I pay back all that Yen I borrowed??

So you unwind your trade. You sell your U.S Equities likely at a loss…..then you have to convert the U.S Dollars “back” to Yen ( at a new rate that also hurts ) and finally pay back your loan. This is the fundamental driver behind movement in the currency pair USD/JPY. This is why it’s been tanking since markets “actually topped” back in late 2015. Everything else has been pure distribution as the big boys and heavy hitters unwind their Yen Carry trade, and it’s taken more than a year to quietly do so.

You can see it on the charts  so clearly, and now that USD/JPY is at parity……things could get pretty ugly.

Clear signs that markets have more or less topped out – and have been distributing to retail “hopefuls” for the past full year.

Little mining stocks on fire….just getting started in the larger macro trend people so……go grab a couple!

 

 

Tomorrow’s Trade – BOJ And Fed On Deck

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

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.

Sit tight….wait and see what shakes out.

 

EUR And USD – How To Trade Them

It´s simple. Very simple.

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?

EUR_and_AUD_When_Risk_Comes_Off

EUR_and_AUD_When_Risk_Comes_Off

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¨.

USD Tanks – The Decisive Break Lower Arrives

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.
Forex_Kong_Ashamed

Forex_Kong_Ashamed

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?