No, I’m Thinkin’ Bigger Issues
Except for the occasional rally to blister the shorts,
EURUSD looks set to go lower; much lower. At the same time, though, we got
record short positions over at the Crimex CME in spec Euro positions. Will
the universe let all these shorts be right?
Markets face this reality all the time; take gold bugs for
instance. I know people who always buy the top in gold, swear they are never
going to sell because the world is a mess, etc. and then sell the bottom
days/weeks/months later.
What have we just seen in gold? Does 2 to 3 day rally [$50 -
$75] that gets public long [again] meet $25 - $35 decline in 40 – 60 minutes a
few days later sound familiar? Uhhhhh, yea.
Anyone that knows Forex history will tell you that one-way
bets have a way of not being so one-way. Now, that doesn’t mean that can’t stay
one-way for extended periods; what it means is that when it ends it will be
ugly with a capital U. We had a 2000 pip rally at the end of 2008 [in 10 days]
in Euro from about 1.26 to 1.46. The carry trades are notorious for disaster;
go ask Mrs. Watanabe about GBPJPY that was a one-way street for years and then
gave it all back [and more] within 3 months.
What gives the shorts in the Euro a better than even chance
of being a long way from being over on the down side are the politicians; ever
seen a bigger bunch of worthless blow bags?
Rumors and leaks are pieces of credibility that have to be
saved, not spent so your mistress can get a new Mercedes Benz. As long as they
blow smoke, and remain in denial, the Euro will not have any rally legs to take
it anywhere.
Yes Virginia,
this time MAY be different.
Have a good day everyone.
-vegas
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