So the people who want to invest in the US stock market where you need dollars to invest are going to sell USD and buy Euros because we all know the best way to get in on the US stock market rally is to hold a ton of Euros???
No! The people who are going to buy into the stock market are going to buy stocks by cashing out their US dollars - which is going to be a less-yielding trade.... Obviously, the everyday currency traders (knowing this relationship trade) will buy EUR in anticipation of this switch from US dollars (safe haven) to US stocks (riskier but more reward) It's just going back and forth -- just like stocks and bonds.... I'm not sure if I'm explaining this correctly - but this is certainly trading made simple - based on that relationship Now sometimes, it doesn't exactly work out but the majority of the time it does If you don't believe me, superimpose the $SPX on top of the EUR/USD and you will see an almost-perfect correlation (both rally and decline) Hope this helps!
Might be tempted to sell around the 4040 level - getting a little overbought right now - even tho it is on a clear uptrend either way, profit is profit!
still in - scaling in and out - around my core position thinking that the big move won't happen until after Trichet speaks and US GDP data -
watch the other markets and good luck to you sir in my opinion its all monkey business as usual www.youtube.com/watch?v=tRGbqO6FzZI
I opened up Oanda when I saw this thread. I wish I would've pulled the trigger earlier. Long @ 14032, stop 14010, target... don't know yet. I'll watch this closely and get out when it feels right.