Thursday, July 1, 2010
Staying Long
We started off the V rally too early and got too many piggy backers looking to unload into the close. So I wouldn't be surprised if we retested the lows from the morning but I will stay long. The wild card here is how much more hedge fund liquidation is left. Look at the euro to see whether hedge funds still need to liquidate. If it keeps going up, that means we probably have more liquidation to go.
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3 comments:
Historically a strong Euro has been good for stocks?
Yes, historically it is. But today seems like fund liquidation of euro short positions to reduce risk.
Macro funds and managed futures are the ones most likely to be short the Euro. Macro funds were net short equities according to the last survey I saw (I don't know how accurate thise surveys are) and managed futures are trend followers so I doubt they are long.
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