However, how many analysts in these past couple of days were bearish on the Euro Dollar. I personally went bearish with the EUR/CAD (announced on my twitter when I did), the only cross currency trade I've ever made - really!
But where to go next after a big jump like this? Do stocks continue to rally or is it time to short some equities?
Although Bank of America (BAC) did very well today I still don't trust financials, and stay away from them like the plague until this whole mess with Europe is resolved.
My usual ETF spiders have been very profitable - like the SPY - QQQQ and the Diamond (DIA). But once again Oil is over a hundred bucks a barrel, usually this slows rapid growth in the Dow Jones down.
Last but not least - the Euro trade, the overall sentiment for this pair is 50 -50 which makes it really hard to gauge whether or not you should buy or sell the Euro against the US Dollar. For this Forex trade you would have to take on more risk, for me I would be still very bearish on the Euro. I personally think the overbought currency hurt the Euro Zone as a whole. The ECB made a big mistake not to lower the rates so trading with Europe would be a little cheaper. After years of letting it go on like this, countries like Spain, Italy, Greece, Ireland, Portugal and now even Belgium are dealing with high unemployment and a huge deficit. So eventually those guys at the ECB should realize there is something wrong with the current system. When that is going to be, no one knows exactly - all I know is when there is a spike in the EUR/USD - I'm short or I'm short in the FXE - the currency ETF that tracks the Euro performance.