Expect A Euro Bounce And Bank It: Euro CurrencyShares Euro Trust, United States Oil Fund LP, Southern Copper, AK Steel and Chevron
Have you tried to find someone bullish on the Euro CurrencyShares Euro Trust (NYSE FXE)? I have had no success in finding anyone out there that is bullish. What does that mean? It means I am moving to the bullish side on the Euro and slightly bearish on dollar.
Why would I do this? The short Euro trade has been done to death in the short term. Over the weekend, every financial media outlet was talking about the Euro crashing, coming to par with the Dollar. Every analyst was saying the same thing as well. The trade is far too crowded to the short side on the Euro and in my opinion, expect a sharp bounce later this week. It may not be a long bounce, but it will be steep.
Stocks and ETF’s to play if this happens are all in the commodity arena. Look at an ETF like United States Oil Fund LP (NYSE USO) or stocks like Southern Copper Corporation (NYSE: SCCO), AK Steel Holding Corporation (NYSE AKS) or Chevron Corporation (NYSE CVX). These will most likely have a sharp snap back rally on any weakness in the Dollar which would come from strength in the Euro.
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