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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (4116)	6/20/2001 10:44:20 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

I'm thinking the euro is looking stronger, and may move...! Well, I would hope so... The USD has been kicking its butt for weeks now (and kicking the hell out of US corporate profits overseas). quotewatch.com But will it just be a dead cat bounce in the Euro, or a sign that the ECB is not going to permit it to reach new lows? How much intevention can they implement against the hedge funds when there is no sign of major structural reforms? quotewatch.com Europe has some serious problems. The Irish are becoming resentful of the machinations of Germany and France towards directing the course of the EU. On top of that, Germany is expecting zero growth in the 2nd quarter, instead of the 2% positive growth they were anticipating: Two more leading German think-tanks on Wednesday said they believe the government's target of 2 per cent increase in GDP this year looks unlikely to be achieved, adding to the gloom over the growth prospects of the euro-zone's largest economy..... .....The comments come after Werner MÃ¼ller, the economics minister, on Tuesday said Germany could register zero growth in the second quarter of the year. news.ft.com And yes, the US may be facing Zero growth as well, but the US is running a surplus, a luxury available to neither Europe or Japan. And Europe is facing TREMENDOUS social unfunded liabilities because they failed to restructure their pension programs in a manner similar to the US. For example, I heard the other day that France is facing unfunded liabilities equal to 200% of its annual GDP. It could be that a deep recession might just be what the politicians in Europe are hoping for, since it would make it easier to centralize control over economic policies that most of the EU members want to control themselves. Hawk

To: Chip McVickar who wrote (4116)	6/25/2001 11:54:50 AM
From: John Pitera	Read Replies (1) \| Respond to of 33421

HI Chip, I do think that we'll see another rally back towards .97 for the euro, very much like the rally we had from the Oct 2000 low of .82 and change up to the Jan 2001 high near .97. The decline since Jan has looked corrective in nature, and hence we should see another meaningful rally. I think there is a chance that we might move lower first to more fully retest those Oct 2000 lows near .83 I Do think that if you look at the USD Index from 1997 One can see a 5 wave sequence finishing as well as one of a smaller degree that started in Oct of 1999. We also look like we've completed an even smaller 5 wave sequence from the 4th Q of last year. So I think we have seen a major high in the USDollar, although a further high can not be ruled out, Since we know that when markets are in the later stages of a multi year bull market it does take time for the topping process to play out. Certainly the US Manufacturers have been loudly complaining about he high valuation of the USD. even the UK's Economist Magazine study of the Big Mac Index shows the US Buck to be more overvalued than any time since it's inception. John