Dislikedfundamentals have changed, youre just not recognizing it. breakup/exit risk is nil in the short/mid term. that was not the case in 2011 which makes your comparison invalid. yes greeks are rioting, protesting and striking; yes, cyprus is going to collapse/default/implode, yes spain might ask for a bailout but right now, no one cares. nobody cares at all, it is old news. in fact, anything slightly to the contrary has and will continue to contribute to euro strength.Ignored
Well, i guess we must agree to disagree. Yes, for now, the breakup risk is diminished BUT the underlying economic situation has also worsen. So, at best you can say that a panical near term sentiment has diminished but fundamentals have definitely not turned to positive. And in the end, it's the growth prospects that determines whether there'll be an exit or not (or the expectation of that). And growth outlook has been lowered for the eurozone and for the U.K. at least in the first half of 2013 which is backed by the recent econ data. If, there's a clear sign of a sudden growth pick-up, only then i will agree with you....but all that is a fundamental talk, again. Just look at AUD for reference. Improved fundamentals ? Hardly. AUD should have cleared 1.06 by now if the moves in EUR and GBP were fundamentally justified.
How was the 2011 example invalid ? The politicians managed to manipulate the market higher 300+ points in one day, concluding that decisive steps have been taken to avoid any breakup fears. The market wouldn't have rallied if nothing was changed on their minds that day.
However, i agree that noone cares right now, could be because of year end or for some other reason unknown to me.
Dislikedyes, its due for a pullback which will probably be a few cents but that doesn't mean you cant make money riding an algo or institutional trade. as far as i'm concerned, we are likely in a 10-12 cent range for the foreseeable future. in fact, the ONLY case I can see for a weak euro is in devaluation by the ECB to support the exports in member nations.Ignored
Dislikedso, in summary, it is prudent to carefully trade (short/long) in any kind of market, irrational or rational.Ignored
Dislikedi emphasize how little I care about how normative the market should be. comparison of what should have been vs what is happening makes zero sense right now. as a trader, your goal should be to piggy back on institutional traders regardless of direction when a clear trend has presented itself. someone in here has the sig, "the market can stay irrational longer than you can stay solvent," or something to that effect. i measure my success by adaptively trading what the market presents not by detailing some diatribe about how the market SHOULD...Ignored
Look, you are going way beyond of what i was saying, again, which is what i think is causing the disagreement in the first place. I agree with everything said on that paragraph. It's just that this wasn't my point.