freefdawatchlist's  Instablog

As predicted on Dec 7th, that Euro is heading 1.29 and now it's at 1.30 level. With weakening Euro and strengthening US dollar, means Emerging countries are less likely to buy anything from US and with business inventories up, US doesn't have to buy new thing. Fed did the right thing by not issuing QE3. Neither QE1 or QE2 has helped and neither will QE50 will help. The issue is growth and credit market tightening. Banks are not issuing news loans to small business as banks need to maintain certain levels of liquidity as per regulatory requirement so that another Lehman brother doesn't happen. But this is slowing the global growth. The Global economy is heading downhill from here on.

The market was up in the morning in positive territory inspite of bad US economic data. Its holiday season, the retail sales number should have gone up and business inventories should had gone down but the result showed opposite, which is bad sign for US economy and the holiday season. Inspite of record sales thanksgiving, Best buy was down by 15% and Amazon was down by 5%. 

 

After 800 point rally, I think there is no Santa rally this year. It's more likely to fall from here, and we could see worst in February 2012. 

 

If you think Euro is going up from here then short AUO and buy FXE  and if your bullish then buy AUO and short FXE. Buy ERY, FAZ, VXX, TZA if your bearish and buy ERX, FAS, and TNA if your bullish.

 

GLD  and IAU is a sign fear and inflation. The inflation is going down but if the oil prices rises then inflation will come into picture again then its safe to buy GLD and IAU. At this level I would still recommend to buy GLD and IAU and hold it long.

 

Overall I think there could be some resistance and some hope from Thursday's ECB meeting. There is no doubt market is looking clues to go higher because the Hedge fund manager are under performing and they need year end bonus too, so they want to keep the market high but don't get trapped by this. Keep cash in hand there is plenty of opportunity in this market and you can easily make good fortune. Just don't lose money.