January Effect 2003 Message Board

STOCKTALK

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Strategies & Market Trends : January Effect 2003

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To: Londo who wrote (124)	2/3/2003 5:03:00 AM
From: RockyBalboa	Read Replies (2) of 666

Thanks, L. After the first infliction on Jan 27 I turned to the idea to short it in earnest. It took longer than I expected and there was even the danger of a blowoff when it started its second half hearted run to some 1.090 later the week (taking out a high of a 1.0917 in thin trade). Now it's not too late to increase on the short side, me thinks. CTAs are scaling back due to volatility and the break of the short term support and this may add to the selling for some time now. Back to the drawing board, I try to envision the next scenario: It could undo a bigger part of its gains (which amounted to 10c since Dec 1st), especially with the U.S. going into war or otherwise trumping up. The first results come up with a target somewhere between 1.05 and 1.055 (the best case being spikes down to the levels). Fundamentally, the scenario for a weak USD in the longer term has not changed. Some call for EUR prices between 1.14 and 1.25. This means that, once the counter trend is stopped and the selling done, the EUR could try for another round of gains (but much of this scenario needs heavy support through the reflation efforts of the U.S. fed).

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