trading JPY

Trade Alert! – Tech Signals Short

Forex Kong 20 Comments

Trade Alert For Monday November 11, 2013

I want to thank Gary and the group at Dumb Money Tracker for the consistant flow of new users / followers here at Forex Kong! Hopefully some of you still maintain a small chance of “seeing the light” or possibly even making some money with some sound trade suggestions!

Thanks guys!

The Kongdicator has “finally” issued a formal signal on the Nazdaq that would have entry approx 4 hours from now so…..Monday will certainly do.

The entry signal is “short” people, so to be clear – I will consider “selling” not “buying”. This is fantastic news really, as this “melt up” has been a long and drawn out affair, and has kept alot of people “out of the trade”.

I will be looking for significant strength in JPY as well as we “should” likely see “risk” sell – along with tech stocks. When risk sells off money floods back into Yen as we’ve discussed here a million times over.

There are plenty of ways for stock traders to take advantage of this also….and perhaps over the weekend “we can all chip in” and post / comment to put some creative ideas on the table.

I generally don’t enter markets on Sunday night / Monday morning so…take my advice…let this play out through the day Monday and have a look at the close.

Getting ahead on this and doing some solid research over the weekend could be a very valuable exercise for many of you, as you already know…

“I’m very often early…and rarely ever late.”

The Art Of Re Entry – Directly Into Profit

Forex Kong 8 Comments

Often “re-entry”  into a trade where you’ve already taken profits, can be a little tricky. Questions arise such as “gees – is this move over already “? or “man…..not sure this is the right level, perhaps it’s gonna pullback a little further “.

Aside from years of experience , practice and application, as well a fine tuned short-term trade technology / indicator – there really is no easy answer.

If you’ve been viewing charts for as long as I have, and enjoy the “geometry and math” that goes along with it- often these little “areas for re-entry” just come jumping off the screen.

It takes time, and it takes a considerable amount of trial and error in order to hone “some kind of strategy” that gives you a tiny glimmer of hope – in navigating the short-term time frames / noise that goes along with them.

A couple of other hints:

  • I don’t really believe there is much need to get any smaller than the 1H chart (coupled with the 15 minute chart).
  • If you consider that a 5 minute chart can move from overbought to oversold every couple of hours or less – there is really no solid indication as to “what level to enter” as…it’s really just noise.
  • With whatever technical indicators you use ( RSI, MACD, Bollinger Bands, Stocs , MA Crosses ) consider placing orders “above / below” current price action when your signal is met – and allow the price to “move towards you” as further confirmation.
  • Take the time to place several smaller orders ( in the direction of the original trade ) and let momentum ( if in fact you are correct ) pick up your orders “as price moves towards you”.
  • Smile and laugh when you get it completely wrong (and price “shoots off” in the opposite direction) as  – you don’t have a position! You’ve done something right!

With these simple things in mind, get back to the charts, consider my tweet and subsequent “re-entry across the board”.

See if you find anything useful as…..every single trade entered this morning has moved directly into profit.

The Euro And The Yen – A Move In The Making

Forex Kong 12 Comments

There is continued talk in Forex circles this week that the European Central Bank will send a “dovish” message at this weeks policy meeting – suggesting that further monetary easing is likely on its way. The recent strengths in EUR hurts exports, and some feel a rate cut could come as early as this meeting scheduled for Thursday.

As we’ve discussed here on my occasions, the current “currency war” has countries racing for the bottom, with hopes of making their export prices look more attractive to foreign buyers. If your buyer can stretch his money further and possibly get a better deal buying from you ( as your currency value is reduced ) – you sell more airplanes, you’re country’s economy grows etc…

At least that’s the idea anyway.

Lining this up with some crazy technical conditions I present to you the chart of EUR/JPY – or the Euro vs Yen. On purpose I’ve added every single technical indicator / explanation as to further drive the point home, as this “should” be a whopper. The chart is a day or two old and has already moved a couple hundred pips lower.

Forex_Kong_EUR_JPY_2013-10-30

Forex_Kong_EUR_JPY_2013-10-30

It was the BOJ’s massive liquidity that drove this pairs huge move over the past year, and now we’ll see The European Central Bank “fight back” with more talk and a possible rate cut to tip the scales back in their favor.

On nearly every technical level known to man ( and now with increasingly likely fundamental factors ) this thing is about as overbought as it gets, as this again is a “weekly chart”.

Continued USD strength coupled with a move by the ECB could have this thing fall hard – making for a fantastic short opportunity moving into Thursday’s meeting.

My Trade Ideas – October 11- 14, 2013

Forex Kong 7 Comments

Forex Trade Ideas – October 11 – 14, 2013

The US Dollar has now made a “swing high” here,  at a very important and critical junction.

As usual ( these days ) the implications are considerable, depending on which camp you’re in.

Off the top of my head, further ( and continued ) downside here would see USD trading “lower” in tandem with “risk” (also trading lower) – which in itself is troubling, as we would “usually” consider “risk off” activity to be good for USD.

In a situation where both USD as well U.S Equities where to fall in tandem ( as we have seen on several occasions over the past year  ) it is also very plausible that we see both NZD as well AUD fall “even more”.

There would be absolutely no question that JPY ( The Japanese Yen ) would rise.

Trade ideas “would include” some pretty bizarre set ups – in that I would consider things like:

  • short: NZD/USD as well AUD/USD ( where USD falls…..but gulp – commods fall even more).
  • long: GBP/USD as well EUR/USD ( where USD falls, and these two take in flows straight up).
  • short: USD/CHF ( where USD falls and the Swisse France takes safety trade ).
  • long: JPY vs nearly anything under the sun, but especially AUD and NZD.

It’s far to early to tell, and the outline above is highly speculative but…..should further evidence of this unfolding be seen – I WILL IMPLEMENT TRADES IN NO LESS THAN 12 PAIRS IN A HEARTBEAT.

You’ve got to “at least” have a trade idea / plan in mind, then allow it to either play out or fail, as opposed to just turning on your television. Getting this one right could generate some serious, serious profits but again……………you’ve got to have an idea, a plan – before heading out on the field.

 

 

JPY And Nikkei – Thank You Japan!

Forex Kong 13 Comments

I’m absolutely fascinated with “all things Japanese”.

In particular – The Yonaguni Monument (与那国島海底地形 Yonaguni-jima Kaitei Chikei, lit. “Yonaguni Island Submarine Topography”) a massive underwater rock formation off the coast of Yonaguni, the southern most part of the Ryukyu Islands. There’s debate as to whether the site is completely natural, is a natural site that has been modified, or is a human-made artifact.

Of course I’m convinced it’s evidence of “ancient aliens” but then again…..I digress.

I likely eat / prepare sushi 3 to 4 times a week, love saki….and am currently practicing some “simple spoken word” while not on the rooftop  – working on the spaceship.

A special thanks today – to Japan!

For all you have that’s wonderful, and of course the Nikkei! ( kindly respecting my wishes and turning downward), for JPY and it’s strength, for sushi, for sake, and all the other wonders of this incredible land!

 

 

 

 

 

JPY Takes Safe Haven Bid

Forex Kong 2 Comments

In case anyone had any doubt about which currency would see strength during a flight from risk – The Japanese Yen was the clear winner overnight on fears of the U.S attacking Syria.

Kuroda and the Bank of Japan’s QE program (which is 3X as large as that of the U.S) has taken a serious hit here, as pairs such as AUD/JPY have more or less 100% completely retraced since the stimulus started back in 2012.

As I’ve mentioned here time and time again – JPY will always take a large portion of “safety flows” as the country of Japan holds most of its public debt domestically, providing little chance of default. When safety is sought – the Japanese Yen (JPY) makes sense for that reason alone.

I’d also suggested that the “easy money” being short JPY ( based in Kuroda’s QE plans set to continue) has already been made as we are now seeing what will likely happen should “global appetite for risk” come off. All the printing in the worlds can’t keep up with the flow of money “back into Yen” when risk is unwound.

What we “didn’t see” – is strength ( or further weakness for that matter ) in USD as today looks like “yet another” doji candle, and flat as a pancake.

I don’t believe USD is being considered a safe haven currency any longer, and am still of the mind-set that it will sell off.,,,regardless of further actions in a military sense.

I’ve entered several positions “long JPY” and continue to hold several positions “short USD”.

Japanese Candle Sticks – Get To Know Them

Forex Kong 7 Comments

Every trader has their own “favorite type” of technical analysis to apply when viewing charts, and that’s great. However it’s been my experience that having only one “go to analysis tool” is generally not enough to get an accurate read on things – technically speaking.

You need to see things from several perspectives and apply your knowledge of at least a couple different methods of analysis in order to make sense of it all.

I follow price action almost exclusively – and have very little in the way of other “indicators” on my charts short of the “Kongdicator” (my proprietary short term tech tool) which “does” essentially follow pure price action.

Japanese candles are a very large part of my “graphical / visual” evaluation of markets action as with a simple glance, one is able to deduce:

  • The high of the given time frame
  • The low of the given time frame
  • The opening price of the given time frame
  • The closing price of the given time frame

*and even more importantly – the “difference / variance” in price over time – purely in a visual context.

So when you see a candle ( your eyes get so used to identifying them over time) that suggest to you “hey! in the last 4 hours price has jumped dramatically (or perhaps the inverse) – you take notice!

Google’em – there are piles of excellent websites outlining Japanese Candles – and how to use them!

Kongonomics – Japan In Real Trouble

Forex Kong 12 Comments

“The following is taken largely from the newletter of John Mauldin”

After the collapse of what might still be the largest economic bubble in history, in 1989, Japan is still mired in a 24-year non-recovery. Nominal GDP in 2011 was almost exactly what it was 20 years earlier, in 1991. You can find other ways to measure nominal GDP which indicate limited growth; but compared to the US and China, nominal growth in Japan has been virtually non existent.

Japan’s gross debt to GDP ratio is expected to top 245 per cent this year, according to estimates by the International Monetary Fund – which is considered to be “ridiculously high”.

They cannot continue to grow their debt at the current rate. There is a limit. No one knows for sure what that is, but it is getting closer. And they know it. So they have to get their fiscal deficit below the growth rate of nominal GDP.

If JGB (Japanese Government Bonds)  interest rates rise 2% in Japan, then the government must pay almost 80% of its revenues (as currently received) just to cover the interest on its debt. Even a 1% rise would be fiscally devastating.

The Abe government plans to raise taxes. Japan’s current sales tax is 5%, due to increase to 8% next year and 10% by 2015 with hopes of generating further revenues , but this will also hurt consumer spending. So round and round it goes.

The government of Japan has no choice. Prime Minister Shinzo Abe’s radical experiment with macroeconomic stimulus will create a debt and monetary overhang so huge that it may just bankrupt the financial system and quite possibly trigger hyper-inflation, and at this point – there is no turning back.

I’m watching this closely as my theory that the “EU Zone” would be our catalyst for “global fireworks ahead” may very well be replaced by Japan as this is developing extremely quickly.

I believe the “easy money” short JPY is now gone, and am currently positioned “long JPY”.

Nice call Kong! The Nikkei is down a wopping -2,500 points since your post : https://forexkong.com/2013/05/25/nikkei-20-year-chart-rejection/

Nikkei – 20 Year Chart Rejection

Forex Kong 15 Comments

For the past several weeks the real story has been Japan’s amazing efforts to weaken the Yen – and in turn drive it’s stock market “The Nikkei” to the moon in the process.

Regardless of what you might think (with respect to recent data coming out of the U.S or even the latest stream of “upbeat earnings” from U.S companies) – the primary driver ( actually  “the only” in my view ) to higher equity prices in the SP500 has been the massive liquidity injections by The Bank of Japan coupled with Uncle Ben’s usual 85 billion per month.

We have now ( and finally ) reached a point where there is absolutely no question that we are in “bubble territory” as even the Fed is now doing what it can to “talk down” its own stimulus (which we all know can’t happen).

The correlations laid out here have been very straight forward. “Nikkei up = Yen down” and “SP 500 up = USD up”.

What’s interesting when we “zoom out” (and look at much longer term charts such as the last 20 or so years of  The Nikkei) we see that nothing is really that far out of wack.

The Nikkei has been rejected at the downward sloping trendline of “lower highs” – for the last 20 odd years running.

Nikkei_Longer_Term

Nikkei_Longer_Term

So once again we are left to consider if indeed the massive amount of money printing and central bank intervention can truly..TRULY…make a lasting difference in the growth of a given economy…or merely provide a brief “reprieve” from the pressures therein.

As the Nikkei corrects lower – so will USD.

I remain short USD….and look to get long JPY in coming days.

Nikkei Weekly – One Ugly Candle

Forex Kong 5 Comments

I’m gonna make this quick as to get something else posted here before this site turns into a soapbox.

As per suggestion some days ago – the Japanese stock market has most certainly “corrected”. Unfortunately I got cold feet before the weekend and trimmed my positions considerably – only banking an addition 2-3% as opposed to the amount needed to purchase the yacht I’ve had my eye on. These things happen, – and I am no worse for it. Shoulda , coulda , woulda has no place in my trading, as the opportunities continue to present themselves in bountiful fashion.

I will sit patiently throughout the day, and allow volume to pick up from the “anemic state” we’ve floundered in over the past week. I’m not exactly sure where the hell everyone went – but assume “running with bunnies” and “gargling chocolate”  may have been on the list of activities.

In light of the sell off overseas – and its implications with respect to “risk aversion” – all is unfolding exactly as planned.

Come closer little rabbit – I’ve got some stocks I’d love to sell you here, come closer…a little closer…that’s right – just a little closer  – BAM!

Im 100% cash yet again – with orders in place “should JPY continue higher”.