Friday, March 19, 2010

what went on this week~

The EUR is still range bound and trades very much news related with an endless chain of reversals, while the USD Index delivers fake break downs and reversals around the 80 level. On Thursday a rumor was started that the Fed will raise the discount rate after the close, because it did so a month ago. The rumor was false, but whoever started it made good money on it. The noteworthy currency is the CAD. It is close to breaking par against the USD again. Canada remains the only country that did not get caught in the recession because its banks weren’t allowed to gamble.

If you are not long stocks from months ago, then now certainly is not the time to go long. I am waiting for a rollover to short these markets. Whatever pundits want to make you believe, there is no recovery. Hundreds of container ships are still anchored without cargo. Foreclosures and bankruptcies are still hitting highs. In the US we see people walk away from homes that they actually can afford to pay, because the mortgage balance is much higher than the value of the home will ever be in the future. These strategic bankruptcies will be the kiss of death for housing in the US. Don’t be fooled by Friday’s market action though. It is quadruple witching and moves may be skewed as the last holdouts roll out of their positions.

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