This is taking so much time. I wish it would just crash already so I could start going long the currency commodities. The way I see it, if the euro crashes and we also have a significant US stock market correction and lower oil prices, then the AUD and CAD will also likely tank for a while. Then I could ride these commodity currencies all the way back up and make enough to retire so I could invest in XOM and sell calls against the shares. The only question is how tricky it's going to be to try to short the euro when/if the eurozone starts to implode. Is it going to be huge volatile moves that will stop you out if you get in or will be over by the time you get in? What will be the best currency to short? the EUR/USD?
Clambill, In Dec, I went short both EUR and GBP against USD. I closed the GBP short as the Dubai problems faded into the background. I expect the GBP to start imploding in a while and am patiently waiting to reshort it. I don't think that anything's gotten better in the UK but things are deteriorating so rapidly in the Eurozone (EZ) that I'm simply going to concentrate on that play for now. I am constantly checking for news on the EZ with an itchy trigger finger, looking for a good reason to close or reduce my short position. HOLY CRAP!!! Anyone know what caused that 50 pip drop in the EUR just now? We're now at the lowest level since April 09.
You thought the gap last week was something? Wait until you see the move coming up. It will be massive! Lot of longs entering the market in 6E, and they are in stealth mode again. Shorts, you have been warned! Something is cooking behind the scene.
Jax, that was less than 140 pips trough to peak on the rumor then confirmation of Greece making a formal loan request of the IMF and EU. And it's burning off quickly. This weekend is setting up for a gap down due to the fireworks about to begin in the European political world.
I believe EUR bottomed. though your analysis is very sound. I went long EUR/USD 25 minutes ago @ 1.332 with stop at 1.326.
Germany was supposed to come up with 30% of the money and some of the countries that are supposed to contribute don't even have much money to give. And if there's a contagion, they wouldn't be able to bailout many countries at the same time. This situation is COMPLEX and DIFFICULT. Of course, the Asian Crisis in 1998 went away so I would expect in time there would be some way they'd get out of it. Very interesting times ahead. (Hehe, this also comes at a time where I found a solution JUST YESTERDAY for a problem with my method I just identified. I may finally start making profits after all after experimenting for 18 months trying to develop a method that works. It also comes at a time where I told myself I'd give myself one more month before looking for a job if it doesn't work.)
Very nice call on your long. I'm impressed with today's rally; I fully expected it to fade by this time of day and close in the mid-1.32s. I was way wrong on that expectation. The problem with the short Euro trade is that it's getting pretty crowded and it doesn't take much to set off a short covering rally. I don't know if that's what we got today or something else. Considering that Greek bond spreads continued to move higher today, I'm surprised by the upward movement. ... I don't watch the European bond movements much and get my data secondhand from a couple of European traders. They indicated - as I expected - that all EMU sovereign debt (including France and Germany) sold off a bit today. That's the problem that I see with the rest of the EMU trying to bail out Greece - they end up having to pay a higher price to finance their own debt so that it costs them twice (once for making the loans and second for all future debt financings). Well, I've got a decision to make in the next couple of hours. The lowest cost basis lot of EUR that I sold was for 1.3410 (we've been close to that today) yesterday early AM. Everything else has a much higher basis. I'm tempted to reduce my EUR short going into the weekend by an equal amount that I sold for 1.3410. Two reasons: 1) better to take a small profit than a loss, and 2) anything can happen over a weekend. (I know that many will think I'm crazy but I only use mental stops, especially when I'm riding a profitable trade). I'm lightly leveraged but I don't need to think about a big gap up. I've been right on the trade too many times while losing money at it. If the EUR moves down toward 1.3300, it'll make my choice easier. Good luck to all.
lol, what do you mean guaranteed to gap down? Don't you mean: "They're going to come out with more news to ass rape the shorts."?
Uh, all the news from here forward is bad. Unless they announce that EMU scientists have found out how to turn lead into gold. What positive announcement do you think they could come up with? Here's a sign of things to come: http://online.barrons.com/article/SB127193332870480995.html