June 6, 2012
Buy what everybody hates
BUY THE EUROCURRENCY
NOW, at the market
We have heard nothing but BEARISH EUROPE, BEARISH EUROCURRENCY news forever now…
Europe is falling apart. The Eurocurrency will cease to exist…Has there really been any other news for the past 6-9 months?
Not that it really lends any credibility, but having spent roughly 5 years in Europe (and the Middle East), my own opinion has forcefully been, and still is, that all the hype about Europe crumbling to its knees, or that the EU will throw out the past 20 to 30 years they have spent uniting themselves and dump the Euro, is a load of hogwash. The media and talking heads are not happy unless they have some story to beat to death, and the idea of Greece bringing down the world has been played to the ultimate hilt…Europe is NOT going under. Two World Wars didn’t finish them off and this financial ill wind of the past few years isn’t going to either…Europe is not just some name on a map. It is a thriving, age tested, very large CIVILIZATION (and largest economic region in the world) and to believe they will fall apart would be the same as saying the USA could do so also…IT AIN’T GOING TO HAPPEN.
Really. How many of these world ending crises do you need to experience to understand the ongoing GLOBAL CAPITALISTIC EXPLOSION WILL NOT BE DERAILED? Yes, problems do surface from time to time, but in a macro sense, the world economy is in a massive expansion mode driven by the Death of Communism/Victory of Capitalism (circa 1990) and the still very young Worldwide Technology Revolution. As I have written for years, whether it is here, or Russia, or China or wherever, today is all about business, not ideologies.
ANYWAY…Let’s skip all that…and take a look at this chart…
If this looks like gobbledygook to you, let me give you the bottom line: Traders who speculate, both large and small, are betting more heavily than EVER, that the Eurocurrency is going to decline in value. Commercial traders, or people who actually use the currency, are dead on the opposite side of the fence.
As I have noted so many times, the markets are nothing more than a giant mob psychology game…and market movement is a function of buyers and sellers…both getting in and getting out…And the next very BIG thing I expect to see is a MASSIVE rally in the Eurocurrency as the realization creeps in Europe WILL continue to function, that the Eurocurrency WILL continue to exist…and all those speculative shorts WILL get their heads handed to them…
As I have also noted just about every time I make a recommendation in the currencies, none other than Alan Greenspan, who experienced having more economic expertise and information at his disposal than anyone else on the planet, on various occasions stated that predicting the currencies was nothing but a coin toss…In other words, when it comes to the currencies, it didn’t matter how much supposedly meaningful data and supportive “logic” you had to work with, most of the time, everybody was wrong…and right now, “everybody” is short the Euro.
SO…This is where I think we are:
WE HAVE ABSOLUTELY THE LONGEST PLAYING “STORY” OR “CRISIS” I HAVE EVER SEEN IN THIS BUSINESS.
EVEN THOUGH THE EURO…AFTER ALL THIS NEWS HAS BEEN REPLAYED AND RE-TOUTED A MILLION TIMES…IS STILL WHERE IT WAS 3 YEARS AGO (HAS NOT COLLAPSED IN OTHER WORDS), THE WHOLE SPEC WORLD IS TOTALLY LOADED ON THE SHORT SIDE.
I THINK THE EUROCURRENCY IS A ROARING BUY. I have no particular target in mind but just a 15% change (NOT unusual in futures) would take it up to 1.44.
If you don’t understand the concept here…If you actually buy into this absurd and severely overhashed idea Europe is going to “fail”, I suggest you go ahead and short the Euro with all those other guys…Otherwise, I would urge you to pick up the phone and put something on the bullish side of this market…If the Eurocurrency is not some version of the Dow Jones at 6500 in March, 2009 (A BUY), I don’t know what ever would be.
Here is one call option I like in the September contract…There are also cheaper options in using July or August which are based on the same Sept contract shown here…
Give me a call if you want to know more…There are a lot of ways to go about this (even mini futures)…I think this is an incredible trade…
In the markets, chaos and hysteria often produce unusual opportunities. I may be dead, dead wrong, but I see this as the letter perfect example of such a situation.
Pick up the phone…today.
Old Hack Bill