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Cliff Wachtel
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Cliff Wachtel, CPA, is currently the Director of Market Research, New Media and Training for Caesartrade.com, a fast growing forex and CFD broker. He covers a variety of topics including global market drivers, forex, currency hedged and diversified income investing, and is currently working on a... More
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  • MAY 23-7 MARKET MOVERS: NO EZ ESCAPE FROM GREEK CONTAGION 0 comments
    May 22, 2011 12:39 AM | about stocks: UUP, UDN, FXE, ERO, URR, ULE, EUO, DRR, FXA, FXB, FXC, FXD, FXF, FXEN, FXY, JYF, AUNZ, CYB, GLD, CNY, USO, DUG, USL, NBO, DBV, ICI, CEW, SLV, OIL, SPY, SDS, RSW, BXDC, SPXU, SH, DIA, EWC, EWA, TLT, XHB, ITM, IGOV, VGK, TBT, GSG, DBC, CORN, ICN, SZR, BZF, GRU, DAX, FRC, DB, SAN, BNO, ENI
     A weekly strategic overview of what to watch for traders of binary options and traditional spot market instruments for stocks, indexes, forex, and commoditiesWEEKLY MARKET MOVERS: PRIOR WEEK & LESSONS FOR COMING WEEK

    Until Friday, it looked like a typical week in the financial markets since the QE 2 period began in September 2010. Despite continued but not dramatic deterioration in virtually all of the largest economies, the USD and other safe haven currencies struggling while risk assets moved higher. Only dramatic new crises have halted the rise in the S&P 500 and most other risk assets since then:

    • The outbreak of unrest in the MENA region insofar as it threatened oil supplies
    • New threats of contagion from the EU
    • The Japan Quake/Tsunami/Radiation Crisis

    Despite the steady drumbeat of deterioration in the EU debt crisis, and in growth prospects for Japan, the UK, the US, and China, markets have kept rising each week and overcame all obstacles short of a new crisis that threatened a potential global slowdown or collapse. All played out exactly as first predicted by star Appaloosa hedge fund manager David Tepper, when back in September 2010 he boldly and correctly claimed “everything will go up”. See here for the full CNBC interview.

    Then came Friday, and the bellwether SP 500 and EURUSD, and many other risk assets surrendered the entire week’s gains, technically putting them right back at brink of an official reversal of the uptrend since September 2010, as evidenced by:

     

    For example:

     

    ScreenHunter 01 May 22 05 421  MAY 23-7 MARKET MOVERS: NO EZ ESCAPE FROM GREEK CONTAGION

    S&P 500 WEEKLY CHART COURTESY ANYOPTION.COM 01may220542

    ScreenHunter 03 May 22 05 471  MAY 23-7 MARKET MOVERS: NO EZ ESCAPE FROM GREEK CONTAGION

    EURUSD WEEKLY CHART COURTESY ANYOPTION.COM 03may22 0547

    ScreenHunter 05 May 22 05 491  MAY 23-7 MARKET MOVERS: NO EZ ESCAPE FROM GREEK CONTAGION

    CRUDE OIL WEEKLY CHART (WTI) COURTESY ANYOPTION.COM 05may22 0549

    What happened? What’s behind this behavior and what does it tell us about the coming week?

    EU DEBT AND BANKING CRISIS: NOW, MORTAL THREATS FROM BOTH GREECE AND SPAIN

    As we predicted in last week’s preview, this remains the most immediate threat and thus the prime focus, despite plenty of weakness in the other major economies. Much has been written on the EU this week, so we’ll just boil it down to the key points and provide links to material for those seeking further detail.

    GREECE: A CONTAGION THREAT WITH OR WITHOUT RESTRUCTURE

    A Greek default is coming regardless of which choice the EU makes, the only question is whether the EU will choose to throw away tens of billions in order to defer the inevitable contagion risk, or let it happen now and save that cash.

    Greece threatens a Lehman Brothers bank style contagion threat within weeks unless given a new aid package.

    Greece And The EU: Where Rock Meets Hard Place

    Here are the basic choices for the EU regarding Greece:

    TO VIEW THE REST OF THIS ARTICLE PLEASE VISIT http://globalmarkets.anyoption.com AND FINE ARTICLE BY SAME NAME UNDER THE WEEKLY TAB

     

    DISCLOSURE/DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES AND NOT TO BE TAKEN AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS LIES SOLELY WITH THE READER. AUTHOR IS SHORT THE EUR.


     

     

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