A happy 2011 has started and market participants have just finished off a rehabilitating week after all those holiday excesses. Its officially been 1 full year that I have been trading and I am grateful for everything I still have in my life, 
. Truthfully, I had my best trading days in 2010 and my worst too. I am still in the markets everyday, even though I have not been documenting my performance. I assure you that all my trading days are on file and I will introduce a more consolidated form of performance measuring for the new year. Now lets get to business!
Euro debt fears are rising again and as the saying goes “bears make headlines”, I would like to add that they make money too.
Lower 120s looks to be the next pit stop in FXE. In other words short the euro. After Greece and Ireland sought European Union bailout, bonds of Portugal, Spain and Italy lost a boatload of value last year. To make matters worse, the new year starts off with weakness in these same bonds. This does not bode well for the euro. I guess it is true, PIIGS get slaughtered.
I will keep EUO on my radar so I can trade the euro’s fall.
THE DOLLER
The dollar, to the euro’s dismay, has been strong and rising. When QE2 came around, it was believed by the masses that the dollar would absolutely get killed, but recent euro bond fears have investors running for dollar safe haven; can you believe this irony?
While this may be good for the dollar, its bad for export majors in the States. A stronger dollar also signifies a move from risk on mode, to a risk off mode. If you recall we went through weeks mid 2010, where every day was either risk on, or risk off; I am starting to sound like Market Miyagi . It does not look good for risk assets, and the last two days of the week the stock market was acting weak. What is going to happen when the retail crown, and even all the half brained fund managers realize that the market can fall, indeed it will fall again. I expect people to start acting more risk averse, with aggressive stop loss orders, and tight risk management. This just means my jobs going to get a lot tougher. I need to be very careful with my stock pickings. I’ve started a watch list for closed end funds trading less than NAV (net asset value). I will be keeping my eye on top tier high yield income funds. I am going to put in the extra work this year and make it an amazing one in terms of financial growth and on a personal level too. Good trading in 2011!
