trading gold

Forex, Gold, The Fed, USD – Trades Next Week

Pot Stock Watch 9 Comments

With all the talk of “collapsing emerging market” currecies, and the now “global move” towards risk aversion, we are starting to get a good idea as to how the Fed’s massive liquidity injections ( which spilled out of the U.S over the past 5 years ) have fueled spending / investment in these countries – and now the effect of that “hot money” being pulled back out.

As you’ve come to understand, huge amounts of freshly printed U.S Dollars invested “elsewhere” in search of better returns ( as if you can imagine..U.S banks / investors groups would rather invest in an “emerging economy” that their own “sinking” econmomy) are now pouring back into U.S holdings accounts in fear of much further downside risk.

The Fed’s commitment to tapering ( or at least until they freak and double QE) has triggered a rise in interest rates “planet wide” as many of these “emerging economies” now scramble like mad to adjust.

Keep you eyes on gold and silver for buying opportunities ( I like EXK as well ANV ), as well be prepared for some “serious letting of air” in U.S Equities as from a technical perspective we’ve not even made a dint yet, and the fundamental trade is pretty much clear as day.

Fed sticks to tapering – and planet goes down hard. Fed boots up QE ( and more ) band-aid gets put back on. I’m really curious to consider “how far they will actually let things slide” , as even another 1000 SP points doesn’t really look to scary on a weekly chart. Things could easily fall much further over the coming months.

Forex wise, we’ve finally come into the shift and volatility needed to pull “serious profits” in a very short time as these things always move “much further and faster” when moving to the downside.

A complacent buyer is one thing……..but a “freaked out seller” is another animal all together.

We gorillas stand to do very well in times of “correction”.

Exactly the same trade idea’s setting up for the following week, short of a couple days (perhaps late in the week for a breather / bounce ( and slightly lower USD ). We are clearly in a proven “up trend” in USD both technically and more inportantly fundamentally so…..I will continue to press until proven otherwise. Fed POMO running once on Monday and then “Double POMO” on the 5th then virtually NO POMO for nearly 2 full trading weeks! Let’s see how markets hold up…..or not.

Forex_Kong_Face_Book

Forex_Kong_Face_Book

I’ve been updating / tinkering with my Face Book page as well if anyone is interested in “liking” or following etc…. Pot Stock Watch on FaceBook

Markets Trade Sideways – You Know What To Do

Pot Stock Watch 4 Comments

I thought I’d wait until after the close today – hoping that “perhaps” there might be something a little more interesting or exciting to chat about. Low and behold…..not.

Today being the 15th trading day with the SP 500 still flopping back n fourth – in range.

Gold putting in some “constructive” moves but certainly nothing to write home about, and the US Dollar’s upward move has “for now” run a little low on steam.

Japan’s Nikkei has also continued to trade in range, unable to get back over that magical 16,000.

What’s changed? What’s new? Absolutely nothing as price action continues to trade sideways day in and day out. There is absolutely nothing you can do about it, just accept it and do your best to remain calm, focused, and don’t get lulled to sleep.

Markets have a tendency to “jump up and punch you in the face” at the most “inopportune time” so…..keep those eyes peeled and maybe “just maybe” we’ll see some fireworks here soon.

Gary Savage – The Dumb Money Tracker

Pot Stock Watch 40 Comments

Once again I have trouble containing myself.

Here’s the original post where I quite blatantly called Gary out to discuss his “incredible investment advice”. Specifically TO BUY LONG TERM PUTS ON QQQ AND SPY on December 22nd.

http://potstockwatch.com/2013/12/22/calling-out-gary-savage-shame-on-you-man/

The crux of “my issue” with this was the suggestion of “buying long dated puts for 2016” with the expectation of “holding these puts” for “potencially massive gains”.

Now – only 3 weeks later “The Dumb Money Tracker” is suggesting – and I quote:

“””At this point I think one has to throw caution to the winds and just buy stocks. Knowing that the Fed is going to protect the market for the foreseeable future.”””

“””Don’t worry about momentum divergences or trend line breaks. All one needs to know is that the Fed is handing out free money and all you have to do to get your share is buy stocks.”””

3 WEEKS LATER! This……only 3 weeks later.

I can’t for the life of me imagine what “other gems” Gary offers for a “$1 trial subscription”.

You can do your best again man….should you choose to “pop in” and clarify – but to be honest I really don’t see the point.

Smart money?

How bout “No Money”.

China Gets The Gold – U.S Stays Afloat

Pot Stock Watch 28 Comments

Not to shabby really. Two full weeks without a trade alert posted, and Monday the Nikkei closes down some -450 points. I hope you got the tweet. Of the 13 pairs suggested I think maybe “one” didn’t move directly into profit within the first few hours of trading.

A wonderful entry sure, but in this day and age you can’t just rely on that. Would it shock me to see the entire move 100% completely retraced  by tomorrow afternoon? Not in the slightest.

Interesting to see, that of the “safe havens” outlined in a post a few days ago – ALL managed yo move higher as risk aversion took center stage. The U.S Dollar, Bonds, Yen and Gold all moving higher as suggested ( I hope you’ve taken something away here –  a nice lil nugget found laying in the dirt.)

There’s been some talk that the “age-old correlation” between the price of gold and the value of the Australian Dollar has once again “found its way” as the Aussie continues to exhibit “some degree of strength” in a “risk off ” environment. Personally I’m not holding my breath as ( call me crazy but…) I’ve formulated some idea as “what the hell has been going on with Gold” and it doesn’t involve Australia.

Has anyone else considered that the Fed / U.S has actually been “allowing” China to buy gold on the cheap as a backroom / side deal  / means to convert / smooth out the waters as opposed to seeing China dump USD as well as future bond purchases?

Makes perfect sense to me. China says “moving away from USD as well no need for more US denominated debt”, U.S has a heart attack and swings a deal to actually “give” China whatever remaining gold is available for the lowest price possible?

The more I think about – the more sense it makes.

You won’t tolerate our “money printing any longer” so…..please don’t drop the hammer on us just yet – “here’s all our gold reserves as well”.

Manipulation ( short selling in the paper market ) essentially giving China the means to buy gold on the cheap as opposed to more U.S denominated debt no?

I’m positive this has absolutely nothing to do with the Australian Dollar and caution that people are at least “open to the idea”. Call me a wack job……fair enough.

We’ll take it day by day but as it stands, all “short AUD” entries look fine here as of this morning

Gold will be gold, and I’m quite certain the Aussie will continue to find itself on its own “downward trajectory”.

Safe Havens – Who Gets The Lions Share?

Pot Stock Watch 22 Comments

As a larger and more pronounced “correction in risk” draws near – we’ll likely get “on more” attempt at new highs – regardless of what’s already underway in currency markets.

It also looks pretty clear to me that this will line up “right on the money” with the ol standard correlation of weaker stocks = stronger dollar, or at least for the initial “zig” of the “soon to be created” series of lower highs and lower lows.

As per the last 6 – 8 months these “zigs n zags” will often see “inverse movement” on smaller time frames, as the “cross winds of influence” push and pull in a generally “confusing manner”.

Sounds like a bunch of hooey doesn’t it? Now try trading it.

To be honest – we really can’t say for certain how things will shake out when / if we do finally get our first “real and true” correction in risk, as it’s been so long, and so much has changed since last time.

For currency traders here’s a mind bender. Do not be surprised at all to see BOTH the Japanese Yen AS WELL the U.S Dollar rise TOGETHER. So if you see the currency pair USD/JPY moving lower – it means that JPY is rising MORE than USD – get it? I thought not.

Otherwise, as suggested by JSkogs ( reader / trader “profesionale”) consideration of where U.S Bonds will go, and of course Gold.

As all four of these assets ( JPY , USD , U.S Treasuries and Gold ) have all at one time or another represented “a play for safety” – it remains to be seen which will take the lions share, when indeed safety is sought.

I for one can’t see the U.S Bonds doing anything but “bouncing”, and am positive that the Japanese Yen will blow people’s faces off, if only for an incredible blast higher.

I’d “like to think” that any USD bounce will be short-lived ( and certainly not a macro change in trend ) and that Gold yes gold…….finally makes its turn.

It will be very interesting for those of us who’ve been trading markets prior to 2008 ( and I can only imagine for those who’ve been trading longer ) to see how this plays out.

I plan on it been equally profitable as well.

Thoughts welcome as always!

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

Pot Stock Watch 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.

Calling Out Gary Savage – Shame On You Man

Pot Stock Watch 58 Comments

Enough is enough.

I seriously cannot let this one slide as….I could care less what this joker has to say about it.You “the reader” can make up your own mind.

This clown just recommended buying “2016 QQQ / SPY  put options” suggesting, and I quote:

“I think 2016 puts on the QQQ or SPY are going to pay off many thousands of percent over the next two years”.

The next two years??? An options trade?? With a 2 year profit horizon?? That’s your advice / suggestion to readers??

Man….just like the last time Gary Savage suggested buying options ( and I suggested to both he and his readship that his options would go directly to ZERO! ) Here he goes again! Unreal!

Gary_Savage_Clown_Forex_Kong

Gary_Savage_Clown_Forex_Kong

What is wrong with you man? The comment section is wide open / ready and waiting for “Mr. Gold Profit” ( who I believe lost literally everything during 2013 no? ) to back it on up…..

Now you’re an options pro?

You tried currencies for a week er two as well……how’d that work out?

This is an open invitation Gary……you’ve got the floor.

Please enlighten us. An options buy with a 2 year profit horizon? Even better a “bearish options buy” (from the guy that doesn’t believe you can make money on the “downside”).

Bunk. Crap. Bullshit.

How many times a day do you climb the same f#%)/king rock Gary?

 

Post Fed Scrum – Kudos To Readers Of Kong

Pot Stock Watch 35 Comments

Talk about a twist.

Ben hand’s off the bag to Yellen “with” a proposed “tapering”, and seals his legacy as one of the smoothest Central Bankers ever to have walked the Earth – or at least in the public eye.

I wonder what he’s gonna do with the next 20 years of his life? as it will likely be “more interesting to follow” than these last five.

You’d have to have rocks tumbling around in your head if you think that 85 billion is “all” the Fed’s been throwing at markets per month. I imagine it’s more like 150 billion or more as….the bond market is just too large to consider 85 billions per month having much affect.

Post announcement TLT is still sliding, and the U.S Dollar can’t even break even so……the big boys positions remain the same. MY POSITION REMAINS THE SAME.

The “effect” has merely been “the idea” (in traders / investors minds) that “they will never let the market fall”. If it took a number of 85 billion per month or 850 billion for that matter – it doesn’t really matter as the numbers manifest solely as “tiny computer entries” within a small group of friends.

A big “congrats” goes out to our beloved “Deano” for not only hitting the “tapering” right on the money….but also for “serving it up” like a true gentleman. If Deano owned a restaurant – I would eat there often.

For me? Another day of trading, and another day FULL of opportunities. Nikkei popping to 16,000 and USD certainly “not” moving higher on the news………..

USD “not” moving higher on the taper news??…..Hmm………..that’s a bit odd don’t you think?

You’ve been practicing, following along….learning the correlations etc…

Would you not have thought USD would “skyrocket” on taper news?

Hazard a guess as to why not?

 

 

Silver And Gold – Is Now The Time To Buy?

Pot Stock Watch 17 Comments

The question has never really been “Kong – should I buy gold?” but more so “Kong – WHEN should I buy gold?”

The long-term fundamental case for owning gold and silver is as solid today, as it will be tomorrow – and as it’s always been. You can’t go wrong owning silver and gold  “if” – you’ve got a long enough profit horizon.

Up until now, gold and silver haven’t been a “trade” as the metals have “generally” fallen like mad, and sat consolidating in range for what feels like eternity. Silver is just a touch lower than the price a full 6 months ago. For the most part when any asset consolidates for this kind of “extended period” the move “out of this consolidation” is usually quite powerful. Very powerful.

In fact, in this case it’s very likely that the first move upward in both gold and silver will be so fast, and likely so large – that anyone who “wasn’t already in the trade” will be left chasing. Not to say that “you’ll miss the boat” as the PM’s (precious metals) have miles of upward potential – just that…..you may be looking to buy “EXK” for example at 7 dollars – as opposed to getting started, down here around 4 bucks.

We are very close to where I would suggest “starting to build positions”, and I feel that the “miners” will provide the largest “bang for your buck”.

Forex_Kong_EXK_Silver_Gold_Nov

Forex_Kong_EXK_Silver_Gold_Nov

It doesn’t matter which “silver miner” you look at as…the charts all look more or less exactly the same. I like EXK as a “trading vehicle” to make a play in the space – but a pile of others will also move in tandem when the PM’s move.

Check out “GPL” for a super low value play – currently trading at .76 cents!

USD Strength – Gold, Stocks, Forex Direction

Pot Stock Watch 15 Comments

The strength of the US Dollar has gathered steam over the past few days, with several trades “long USD” already paying well. I don’t imagine this to be your average “run of the mill” type move here – so I feel it worthy of further discussion / analysis.

The US Dollar will most certainly be moving lower in the “not so distant future”, but we trade what we’ve got in front of us so……

Forex_Kong_USD_Moving_Higher

Forex_Kong_USD_Moving_Higher

In looking to line up these “technicals” with some broader “intermarket analysis” we’ve got to consider that U.S equities have made some pretty huge gains since January of this year , as USD has more or less gone “up the mountain and back down the other side” – now at exactly the same level around 79.00.

With an impending correction “upward” in USD it would make sense to “finally see equities correct lower” ( if that’s at all possible considering the Fed’s POMO) and unfortunately for many – see gold and the precious metals correct lower as well.

Looking at forex markets it’s obvious the “opposite reaction” of a much stronger US Dollar will equate to a weaker EUR as well GBP and CHF. I would also expect the commodity currencies to correct lower as well, but considering that they’ve already fallen considerably – my focus would be on the Euro type pairs.

So that’s what I’m running with over the next few days – looking to “inch in” to many trades with a “risk off” vibe, and continued strength in the dreaded U.S Dollar.