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 of LHB, SOXS
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.