It looks like Europe is just sold out. It has gone down very little compared to the US in this latest pullback. There is so much skepticism about European growth and sovereign debt worries that there is NO hot money there. Rather, there are probably hedge funds shorting Europe to hedge their long US and EM exposure. The past few days have shown us the cards which I suspected. Hedgies overexposed and overweight commodities, especially crude, and other commodities, as well as energy equities. They are underexposed Europe, the yen and euro, and believe it or not, silver. Silver has been a stalwart during this pullback, hardly budging.
The euro should have sold off with crude getting crushed but it didn't, a sign of a very strong market. We are gapping up healthily today, expecting upside today, the liquidation is over with.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment