A Sell Off Of Currencies Will Present An Opportunity To Go Long The Inverse ETFs (FXE, FXY, RZV, RZG, VXX, EPV, SRTY, SSG, SOXS, LHB)

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October 14, 2010 10:43am NYSE:EPV NYSE:FXE

The Euro, (NYSE:FXE), has hit resistance and appears stalled out from rising higher, due to the strength of the Yen, (NYSE:FXY). A stagnant EUR/JPY, seen in the chart of FXE:FXY, suggests that


 the currency traders are now going to go short the euro yen carry trade, and others, which will cause a massive world wide stock sell off.

I’ve reported on the Euro, (NYSE:FXE), quite a bit ever since the European Sovereign Debt Crisis broke out on April 26, 2010, when the currency traders sold the world currencies, and the Euro, against the Yen, (NYSE:FXY); this occurred when the Euro sold off at 132.77

It was at that time that the small cap pure value shares, (NYSE:RZV), sold off heavily against the small cap pure growth shares, (NYSE:RZG).

We are at this roughly at the same value in the Euro at the current time with the Euro at 139.04. And the small cap pure value shares, (NYSE:RZV), relative to the small cap pure growth shares, (NYSE:RZG), have started to sell off once again as is seen in the chart of RZV:RZG.

This provides the opportunity for us to go long a number of inverse shares as carry trades unwind causing disinvestment from stocks.

  • iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX), Volatility
  • ProShares UltraShort MSCI Europe (NYSE:EPV),  200% Inverse Europe
  • ProShares UltraPro Short Russell2000 (NYSE:SRTY), 200% Inverse Russell 2000
  • ProShares UltraShort Semiconductors (NYSE:SSG), 200% Inverse Semiconductors
  • Direxion Daily Semicondct Bear 3X Shares (NYSE:SOXS), 300% Inverse Semiconductors
  • Direxion Daily Latin America Bear 3X Shs (NYSE:LHB), 300% Inverse Latin America

Chart of EPV, SRTY, SSG

Chart forProShares UltraShort MSCI Europe (EPV)

Chart of LHB, SOXS

Chart forDirexion Daily Latin America Bear 3X Shs (LHB)

Written By Richard K. Gorton From Economic Review Journal

ABOUT: I am not an investment professional. I do not engage in stock or currency trading. I am a blogger and investor who believes debt deflation has created an investment demand for gold, and that gold bullion is the sole means of wealth preservation.  The chart of gold, $GOLD, reveals that with the onset of the European sovereign debt crisis in April 2010, gold has morphed from a base metal commodity to a currency, in fact the world’s sovereign currency.


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