trade strategy

Bernanke Was Drunk – I Understood Everything

Forex Kong 2 Comments

Well I’m pleased.

Still sounding like a someone scared half to death ( that little “quiver” in his voice ) Bernanke (clearly “buzzed”) fielded questions from some pretty sharp people this afternoon and frankly – I’m not sure if he answered a single one.

All the same I am pleased in that, it’s the first time I believe I’ve ever seen the man smile, or even show the tiniest bit of human emotion.

Can you even imagine how happy he must be? Carrying such a burden for so long, I seriously can’t imagine a comparative situation in my own life, where perhaps such “relief” may have been felt.

Here’s to you Ben! You gave us one hell of a ride! With enough twists n turns to give everyone “well their money’s worth”! Good luck to you Ben! All the best!

You won’t be missed.

A very interesting day out on the field today with the U.S Dollar pushing “about” as far as I’d be willing to see it before turning back for “just one more” fall. Have you seen the price of oil last 3 days as well? Wow….so who’s thinking that oil just tanks and the U.S Dollar shoots for the moon from here?

Not me……but I’ll tell you – we ARE getting very, very, very close to considerations of USD making a move higher, watching bond yields of course, then there’s that JPY and Nikkie oh….and don’t forget Gold! 

The following weeks promise to be very exciting. Have a good weekend everyone.

Fundamentals And Forex Direction – A Must Know

Forex Kong 15 Comments

I’m often surprised when I get talking with new ( and usually short-term ) traders – how little they really know or understand of the fundamentals, or of some of the “general under currents” running through currency markets.

At times I really do shake my head, wondering “How on Earth could one expect to have any success at this without spending the time, and making the effort to better understand what’s “really behind” a given currency move? and “what role that currency plays” in the grand scheme of things.

Seeing these low volume / large price moves in a number of currencies over the past 24 hours “should” push a trader to really test his/her skills and knowledge – in learning to differentiate what’s moving, in which direction – and “why”?

A simple example. The Australian Dollar. A strong currency or a weak currency? And then – why the hell would it be moving higher in the current investment environment? Ask yourself these questions BEFORE you consider entering a trade.

Hmmm let’s see..how bout the Reserve Bank of Australia outright stating they WANT a lower Aussie? Further “rate cuts” expected in Q1 2014? How bout some weaker than expected numbers ( not to mention some pretty serious debt/banking concerns ) out of China? Let alone the “old standard” carry trade coming off “should” risk aversion appear ( yes people “risk aversion” remember that? – the opposite of “risk appetite”?), the normal market dynamic where things go “down for a while” instead of “up all the time”?

Point being…..there are no “strong currencies” as the race for the bottom is still very much in play, and will continue to remain the market driver in months to come. You’ll need to see reports of strong economic growth “globally” and countries “raising interest” rates to even consider a time to be looking for “strong currencies” – and I can assure you THAT won’t be happening any time soon.

I continue to marvel as people “see what they want to see”, but the newsflash here, is that we are moving towards a period of “slowing and contraction” not “growth and expansion” so…..I guess you can read your headlines….and I’ll “write” mine.

Low Volume – New Year Balancing Act

Forex Kong 23 Comments

I would caution not to get too “too excited” here – getting back to trading for the first day of the new year. Many portfolio manager types will be busy “re balancing” as a number of asset classes “appear” to be sitting right near areas of possible correction.

The fantastic “dip” in USD I caught a couple of days ago ( as an extra little Christmas present ) has very quickly been replaced by an early morning “surge” here this morning, as gold has also made a nice bump up of 17 – 18 bucks.

Japan’s Nikkei has certainly stalled here “around the 16,000” area so we’ll need to keep an eye on that as well.

All in all I imagine today as well tomorrow (heading into the weekend) should be a couple more days of relatively low volume, with larger / more pronounced swings in price. Not exactly the environment for making any big decisions or making and larger trades. It’s easy to get “swayed” when you see something move a considerable amount in one direction or another, thinking you’ve missed something when in reality it makes a lot more sense to sit it out – until volume returns, and prices find a more stable footing / direction.

Technically speaking, today’s move in USD looks to have done “some damage” to the prevailing downtrend “but” – I’m not looking to take it into account yet….with the new year balancing act / shenanigans playing out as they normally do.

I am also watching AUD like a hawk, as in my view – she’s not looking very good here across the board.

2014 – Launch Sequence Initiated

Forex Kong 19 Comments

So I had to start somewhere right?

A simple blog. A page…….an outlet.

Something to get me back in contact with “actual human beings” as opposed to the endless hours toiling away with machines….technology. Something “of the now” and not of the “visions of the future” – endlessly circling in my head.

A “coming down to Earth” – if you will.

And so it’s been. Quite a year indeed.

One tiny miniscule, meaningless, irrelevant year in the grand scheme of things. A year where I’d chosen to reach out, to change things, to participate , to contribute  – and to grow.

On that level – I’m satisfied.

Could I have traded it better? Sure. Could I have “blogged” it better? I imagine so.

2014 promises to be a very exciting year as ( in case you hadn’t noticed ) the future has arrived. We are moving forward at breakneck speed, with “computer power doubling – yet halving in size” faster than we can blink an eye. The charts have truly gone “parabolic”. The implications are immeasurable.

Those not willing to do the work, to stay tuned, to remain “in the know” will be rolled over immediately, and even for those “who do” choose to put in the effort…it will be a challenge.

I look forward to “stretching my wings” moving forward, as this is what I’ve been working towards the best part of my entire life. I embrace the future. and I “want” it  – now.

I want to wish all of you the very best in 2014, and I want to thank you once again for your continued support,

2014 may very well see Kong get this spaceship of the rooftop……as launch sequence has been initiated.

Buckle up. It’s gonna be a bumpy ride.

check out the facebook page for an idea of where I’m going: https://www.facebook.com/forex.kong

Gold And The U.S Dollar – Where To Next?

Forex Kong 6 Comments

A fantastic question from another valued reader.

PT asks?

“Some time back you spoke of what readers wished to hear. So I thought I’d question a true professional. As a forex novice, my query pertains to gold, silver, and its shares.Where do you see the DXY in the intermediary term (3-6 months)? I know your trades often only last hours, but what is your “change” or expectation for the dollar going forward?”

Kong says:

We’ve seen the decoupling of the traditional relationship / correlation of “lower dollar = higher
gold” right? Or have we?

Pull a 25 year chart of gold and see that this “massive correction” isn’t really that massive at all.
Compared to any other asset / chart you see on the 25 year for example….this is ( Elliot boys
chime in please ) some kind of “wave 4” maybe…..but not a change in trend!

Gold_Bull_Market_Fine_Forex_Kong

Gold_Bull_Market_Fine_Forex_Kong

I have no change in expectation for the dollar ( as I expect it to essentially go to zero ) but will
be wary / watchful for correction “just like we see in all asset classes” when the time comes.

Knowing full well “nothing moves in a straight line for long” sure…..the buck will “buck us bears”
at some point…..as the correction in gold has equally “bucked the bulls”. This shit happens every
day, in one asset or another…..one chart or another.

What most people fail to understand is that “every single pivot / zig and zag” doesn’t play out/correlate/  “on a dime”. An asset like gold ( with such a high value ) has been “on it’s own correction” based on the value / time / zigs / zags etc, while the US Dollar struggles within it’s own set of parameters.

There are points where “stars align”, but in general “intermarket analysis” is extremely difficult for a novice to effectively “time”.

If you ask me what I think. I think the U.S Dollar is going to zero and I think that gold is going to the moon. If you ask me “how long is that gonna take”?

I’ll tell you you’re trading to large, reduce your position size, don’t expect this to be easy and “don’t” pull your life savings with any expectations that you’ll “be even close” in timing it.

Near term – I’m looking for this last leg lower in the dollar – then an obvious bounce.

Trading Nightmare – I'm Awake And In Profit

Forex Kong 6 Comments

One of my computers called me about an hour and a half ago.

Plucked from the grasp of yet another “unsettling dream” ( for what ever reason I am continually plagued by dreams of having my teeth pulled / ripped / removed / taken in ever increasingly “bizarre fashion” ) I welcomed the alert, and eagerly leapt from the bed to silence the soft repeating tone.

Several trades had been picked up, and to my surprise – the U.S Dollar taking a relatively huge hit as the London sessions moved into their first couple hours trading. My surprise? Of course not – you know that. Everything moving accordingly to plan with the added bonus of still having every single tooth intact! How wonderful!

And with so many caught in nightmares of their own, gobbling up useless news stories of tapering and the assumed effect of a “much stronger dollar”.

EUR and GBP are obviously the biggest winners here as per trades in the comment section some hours ago as well a quick tweet.

The “tooth removal” dreams are extremely unpleasant, and it’s really no wonder I don’t sleep a whole lot. Thankfully I was “saved by the bell” here this evening, and rewarded with some fantastic trade entries.

In celebration I plan to eat 3 lbs of chocolate, a full tub of ice cream and as many stale candy canes as I can wrestle from the kids across the street.

UPDATE:

I can fully understand that this must be moving way to fast for some of you as…..only hours later (in fact less ) I’ve already banked just under 400 pips across the board in 6 pairs total, and will now be looking for pull back on smaller time frames – and of course re entry.

When some of this goes down in the “dead of night” I don’t imagine there is much some of you can do about it , not having the alerts / computers chiming, the lifestyle ( never sleeping, no kids , no other job, likely insanity ) let alone the interest / dedication / commitment.

We’ll have to find a solution moving forward.

Retail Investors Are In – You Buying Or Selling?

Forex Kong 25 Comments

Well, if you’d been wondering at all if/when the last of the retail investors where going to indeed “pile into markets” – look no further than these last few days.

Twitter as a fantastic example making like 40% gains in the past 10 days alone, a company still yet to turn a profit. Without fail the “Santa Claus Rally” has exceeded all expectations, on the back of a market already stretched to the upper limits of reality, while currency markets sit firmly with their wheels in the mud.

Once again (as so many times in the past) here we sit with very little to trade, at a time and place where making any “major decisions” makes little sense at all.

It makes no sense at all putting money at risk in a low volume environment, where “churn” and “grind” are about all you’ve got to look forward too. The year will wind down here over the next few days, and with the start of a new year we can expect the fireworks to pick back up.

Remember – The Fed “announced tapering to start”, but that said tapering “starts” in January.

Retail investors are now in. What does that make you?

 

Graphene To Change World – Future Kong Series

Forex Kong 10 Comments

In the new year I plan to start a series “future kong” where I will be highlighting new technologies and cutting edge concepts primed for future investment, as well as researching the companies involved.

If you haven’t already heard of “graphene” you’d better listen up.

What is graphene?

Graphene is a revolutionary carbon based material made of a single layer of carbon atoms that are bonded together in a repeating pattern of hexagons. Graphene is one million times thinner than paper. So thin in fact…….that it is actually considered two dimensional.

Paradoxically, Graphene is also said to be the strongest material every made. So strong in fact, that if we rolled out a single sheet ( less than the thickness of plastic wrap ) and  could balance an elephant on the head of a pencil – the tip could not break through.Yes…….that kind of strong.

Graphene’s special properties don’t stop there…not even close:

  • Conductive: Electrons are the particles that make up electricity. So when graphene allows electrons to move quickly, it is allowing electricity to move quickly. It is known to move electrons 200 times faster than silicon because they travel with such little interruption. It is also an excellent heat conductor. Graphene is conductive independent of temperature and works normally at room temperature.
  • Strong: As mentioned earlier, it would take an elephant with excellent balance to break through a sheet of graphene. It is very strong due to its unbroken pattern and the strong bonds between the carbon atoms. Even when patches of graphene are stitched together, it remains the strongest material out there.
  • Flexible: Those strong bonds between graphene’s carbon atoms are also very flexible. They can be twisted, pulled and curved to a certain extent without breaking, which means graphene is bendable and stretchable.
  • Transparent: Graphene absorbs 2.3 percent of the visible light that hits it, which means you can see through it without having to deal with any glare.

With only about 10 years of practical research thus far, the real world applications are endless, including production of solar cells “hundreds of thousands of times thinner and lighter” than those that rely on silicon, more efficient computer transistors, “bendable electronics”, applications in engineering/building as well space aeronautics – and the list goes on.

So far there are a few companies worth taking a look at as early adopters / movers in the space.

Graftech International Ltd. ( symbol GTI ) is on my radar, looking for a pullback since its recent break out. 

Be Thankful You Trade – Merry Ho Ho Ho!

Forex Kong 32 Comments

It’s funny – how completely “obvious” so much of this appears when you’re looking in the rear view mirror. In retrospect you can pull up any number of charts, asset classes etc….then “layer in” the seasonal aspects (with Christmas now in full swing) add a sprinkle of “news” and a dash of some “good data” and there you have it.

Uncanny.Complete and total bliss.Right on cue.

Literally. Right down to the second on a lazy Friday morning, days before Santa comes to town – the news is good, the data is good, the stock market is higher – and you’re feeling pretty damn good about everything.

And so you should.

Considering the amount of poverty and hardship in the world today ( considering the things “I see” everyday ) we should all be so lucky, as to have what we have…..however temporary.

  • We’ve got the Nikkei double top at 16,000.
  • We’ve got “gold double bottom” at 1179.00/1199.00
  • We’ve got U.S equities at all time highs.
  • We’ve got the last remaining days of 2013.

We’ve got USD rolling over and “back in the red”. Huh? – Kong…..again do you know something we don’t?

As if it was almost choreographed to the second, a number of these correlations and levels appear absolutely “blatant” – when looking backwards. Why didn’t I wait for the retest in gold? Now I see Nikkei double top area as resistance…..Damn I forgot about seasonality….etc…etc…

In any case…..it always looks easy when we’re looking in the rear view mirror.

I wish all of you the very best this Christmas season, and encourage you to take advantage of every single minute with family and friends.

Despite the up’s n downs of financial markets we can’t lose sight of the fact that – “it’s a game…..that we the fortunate – have the privilege of playing”.

Be thankful.

 

 

Trade Questions Answered – Where To Now?

Forex Kong 27 Comments

I guess it makes sense to quickly pull this apart, break it down and get squared on where I’m heading next, as the Fed’s tapering announcement yesterday has certainly raised some questions.

It’s obviously still a bit early to be making any “rash decisions” (as a single day of market movement is that and only that) but it is interesting to take a quick look at how a number of asset classes have “initially reacted” to the news.

Gold has been crushed, moving lower a full 30 bucks.

  • But wouldn’t “tapering” be viewed as “less stimulus for markets”? Shouldn’t gold have shot for the moon on the news?

U.S stocks shoot higher, as Dow gains 300 points.

  • But isn’t the idea of “tapering” going to lead to higher interest rates? Shouldn’t stocks be falling as the Fed pulls back on its POMO and market liquidity injections?

The U.S Dollar has moved higher, but is still well under strong areas of resistance. The U.S Dollar has stalled already.

  • But shouldn’t the U.S Dollar “break out” on news of “tapering”? Isn’t the idea of “tapering” supposed to be good for the currency?

Bonds as seen via TLT haven’t even budged. U.S Bonds are still very much under pressure as selling continues.

The media spin is clear – that the U.S is indeed “rebounding” and that the recovery is well under way. This now “confirmed” via the Fed’s decision to taper. The Fed was doing the right thing while adding stimulus, and now will be perceived as doing the right thing in pulling back right?

The puppet show continues, as for the most part “none” of the above “initial reactions” made any immediate sense. It’s unfortunate having things pushed back a day or two but as it stands……everything is “still” very much on track.

I’m expecting to see the U.S Dollar roll over here quickly – (early next week) and will continue with the same framework I’ve been working within these past several months. The Nikkei hit my 16,000 mark for a second last night as well so…..that too will provide some valuable information moving forward.

Sitting out yesterday in near 100% cash was one of the single best trade decisions I’ve made in the past few months, now allowing me to deploy “big guns” at an instance – when “real opportunity” presents itself.

You where warned. You may have gambled. You likely lost.