Here once again is one of those pleasurable moments where I advertise to you in big bright blinking lights that I was wrong about something. I have hedged (short the euro) a portfolio of long positions (stocks and miners) and a lot of cash in a very conservative alignment in order to keep 2020’s gains intact. Okay well, mission accomplished.
But the ECB is out talking about how the European economy is not as bad as feared (projecting 8% contraction vs. 8.7%, which hardly seems like a cause for celebration). But more importantly, they did not publicly fret about the strong Euro. Hence, the Euro popped, Uncle Buck dropped and my EUO positions plopped.
Here’s the reaction in EURUSD, which has been in a potential topping posture with RSI negative divergence. My paper loss on the position is only 2%, but it’s a large position. So, patience will probably wear thin before too long. Especially if the precious metals break consolidation and stocks continue to rebound. We shall see.
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