Since April 2010 when the euro began its apparent free fall, presented to us were dark scenarios predicting the single European currency will fall as low as to 1:1 in pair with the U.S. dollar (some even predicted EURUSD will decrease further down to 0.9000).

There have been reports in the media that it is almost certain the Europe crisis will culminate in Autumn 2010, with the euro down to its prehistoric levels.

I personally do not foresee a collapse of the euro. There are two fundamental bases to my analysis.

First: Overreaction to the problems of debt markets in the Eurozone.

Although many investors are trying to „talk the markets down“, there already are clear signals that neither Spain&Portugal nor Greece will have to restructure their debts. A measure as catastrophic as a country default within the Euorozone is, in my opinion, totally out of the question. This can only be preached by American prognosticators who have little or no practical knowledge of the real interest and power structures on the old continent (their analysis are most probably based on those somewhat irrelevant practical touches with the European reality these good fellows observed on a vacation to Saint Tropez, Paris or Venice…) .

Second: The technical image of EURUSD that apparently posts signs of a trend turnaround.

In fact, if I was to summarize the current core pressures affecting the euro, I would mention these:

• Many old sharks in Wall Street – like George Soros who is well known for earning a billion dollars in a single day during the post-war crisis when he bet against the British pound – already in the second half of last year started to expect a significant decrease in the markets, which was justified as the so called „second arm of the W-recession“.
• In October-November, 2009 many of these old sharks invested real hard cash into a further drop of the euro. It is known that Wall Street has been split for a long, long time, almost exactly into two halfs. The upbeat half has their analysis based mostly on fundamentals that are slowly but surely getting better. The old-partisan-a’la-Soros half bases their expectations of fast-earned, vast amounts of money made during a market freefall on anticipation of another great selling opportunity much like veteran Soros has seen after the World War II.
• Despite expectations of some of the sharks from the end of 2009, in the beginning of 2010 the market made a significant move upwards. This the old predators with opened bear positions could not swallow, not without doing something about it. They are altogether influential people, so on a private party of the most predatory positioned financial angels held somewhere at a luxury Manhattan restaurant, they agreed that in order to to save their endangered billions they will invest so much and so many million dollars in order for the markets to do what they want them to do. And behold, besides the market-moving activities they are so well known for, they paid Wall Street journalists to report on - what else than the Euro area. To investigate the weakest chain of the European economy. Sovereing debt in Greece has been recognized as such, then the one of Spain and of Portugal. Secret joker in the sharks‘ sleeves is Ireland.
• Wall Street reporters got their money, and the promise of still larger amounts to come, and from here nothing could be sweeter. They only had to do one thing. Namely, to book a hotel room in beautiful, sunny Athens, and report what catastrophic problems this country has in the field of sovereign debt, and how cataclismic impact this will have on the global economy.
• And that is what the journalists really did. In large numbers…
• Other journalists and reporters back in the USA received the footage and text materials from their colleagues on a temporary Greek vacation. These turned out to be an excellent stuff to work with – exactly the type that earns great money for the media. And so the media made the most out of the opportunity as they always do – by making it sound a matter of life and death!
• Well, the markets moved. They tend to move in this fashion, to say, inspired by a flare of messages that are well about to inflate. This is a feature of capitalism. Based on sober, not too turbo-boost analytic report, markets usually stay undisturbed and do not move by a single tick -

As we can see, however, market reaction to the Greek debt reports was truly excessive this time, and so was the implied perception on main street (most likely inspired by those mega millions from Soros and the like…). The market moved so large that it fell exactly to the level where it was in November 2009, or even somewhat below it (this was for the sharks to compensate for the incurred interests on their open short positions). After this, the old predators were swift to exit their positions – only a crazy investor would be bearish when the markets vibrate around their long-term double bottom !!

Of course, to be fair and unbiased, there are real, objective problems to the EU economy. However, they are far from being as serious as the media present them to be. Greece alone earns German and French banks absurdly high money every month on interest on government debt, so you can be sure Euro supporters, indeed, will never allow a Greek debt restructuring, not that there’s going to be a state default.

My view is that, for the rest of 2010, the market will no longer be pronounced as a drop market. This opinion is again based on solid facts. Just to mention one of them: There is another highly influential lobbying group in the U.S. – the Lords of the automobile industry. For car makers like Ford & Co. Europe and Asia are strong and very important customers. If the dollar was to stay high, these “sharks from another bay” would lose exactly the same percentage of their gross profits as is the difference between March and June EURUSD levels. This is again are very, very influential people that just cannot afford afford such scenario to be here in the long-term…

Finally, I want to cite words of the former FED Chairman, Alan Greenspan, that only support my market view: “The problem with Greece and other sovereign debtors of the euro area is far from being as big as you can read in the newspapers. The whole Europe debt matter has been blown out of proportion by the media.”

Greece’s public finances began unnerve investors late in the end of last year, when the country more than tripled its budget deficit forecast for 2009 to 12.7 percent of gross domestic product. On April 22, the EU made an even higher estimate of Greece’s budget deficit for last year: 13.6 percent of GDP!

Matters worsened when Standard & Poor’s lowered Greece’s credit rating to junk on April 27, and also lowered Portugal to A- and Spain one step to AA.

The EU and International Monetary Fund put together a 110 billion-euro ($136.4 billion) rescue package for Greece on May 2 to prevent spreading the pandemic. About a week later, European leaders drew up an unprecedented emergency fund of as much as 750 billion euros (ECB president, Jean Claude Trichet, announced later that they have a 1 trillion eur package ready) to bail out / back countries facing instability and a program of bond purchases by the European Central Bank.

Europe’s banks have $2.29 trillion at risk in Greece, Italy, Portugal and Spain at the end of 2009, according to figures from the Bank for International Settlements in Basel, Switzerland. French banks have the highest claims, $843 billion, followed by Germany at $520 billion and the U.K. at $227 billion.

If the sovereign-debt crisis continues, European banks and insurers will have to write down their exposure at some point. The major concern investors have with Greece’s sovereign debt is that Greece and other “laggards” in the euro area may have to abandon the common currency in the next few years to spur their economies. Some theories even count with the whole Eurozone abandoning the single currency as such, where every state will be forced to return to its original currency (the one used before entering the EU). This scenario would radically have a sever impact on EU economy and its competitiveness on the global stage.

As a result of these great concerns, the single currency felt to its 4-year low against the dollar, reaching the bottom of 1.2240. Note, however, that once this level was reached, the market shows little evidence of having the momentum to break below the strong support line (fibonacci low) - the pair is now ripe for short- to mid-term trading via THE CANAAL and THE CONFIRMATOR systems, both proprietary to Gepard Investments, Inc.

Major American indices e.g. DJIA and S&Ps were also affected by Europe’s sovereign debt crisis - this fact only stresses how global and interconnected the investment community became since the 2008-2009 financial crisis!

However, the equity markets now seem to show more strength and resilience to the debt spur, recovering slightly, while it seems that it was the Euro currency itself that suffered the most bleeding wounds from investors furious about Greek irresponsibility, and severe consequences this has had on the markets.

On the other hand, many analysts point to the fact that the threat to Europe’s banks is overstated and that the EU’s rescue package will eventually bolster confidence in the Euro currency. There’s little evidence so far that sovereign concerns are cutting into profits for most lending banks. The 10 biggest banks by market value in the euro region earned almost $15 billion in the first quarter, company reports show…

Now in the 1D chart above [ click on the chart to get a bigger picture ], we can clearly identify the actual mid-term price range (green parallel S-R trend lines in the right part of the chart/ at GI we like to call them channels). Moreover, there are other profoundly long-term channels, or trannels, the pair has been bouncing on and off, some of them drawn in the chart (red), some not …

As usual, I will not go deeper into the thorough technical analysis of the EURUSD currency pair. One thing is clear, though, and that is the pair is now - like I already wrote in my last technical blog article - perfectly set for posting excellent trading opportunities when applying the CANAAL (short-term) and the CONFIRMATOR (mid-term) Trading Systems, both proprietary to Gepard Investments, Inc.

Let me just give you a beautiful example of how to trade a range-locked instrument, as EURUSD is at the moment - in accordance with the CONFIRMATOR TS in its Sher-lock market phase:

The chart above is actually EURUSD, t.m. the same currency pair as above, only rendered over a shorter time period (1 hour). All of the red circles you can see in the chart represent due CONFIRMATOR trading opportunities, or signals, generated by the CONFIRMATOR Trading System after considering all of its rules.

Watch out, though, no range is kept forever! There will come a time for this pair to cross the range barrier, either the top or the bottom one, and then to continue moving in line with a freshly defined new trend. For the immediate trend change, or swing as some like to call it, there are other technical tools to be applied choosing out of the comprehensive portfolio of GI technical toolset. If you are my 1-on-1 FX Student, I certainly recommend to review all materials comprised in Modules 4 and 10 of your training course in order to properly identify trading opportunities when price moves within a range, and when it crosses the range from inside out …

World business and political leaders gathered in the snowy Davos, Switzerland January 27 to 31 for the 2010 of the World Economic Forum. This year’s theme: “Improve the State of the World: Rethink. Redesign. Rebuild.” In contrast with the noble forum theme and the rethorics of Davos speakers, however, there seems to be no real, lasting, and positive impact of this year’s forum on the Financial Markets. In fact, the behind-the-curtain talk of the very opposite nature turned out to be market moving - Davos 2010 ended up to be banker-bashing (and particular big-bank banker-bashing), with hedge fund and private equity managers delighted to find themselves on the side of the angels for once: “Hey, we’re not bankers.” As one of the Japanese speakers put it, it seems that the western banks are now perceived as the public enemies rather than public-serving institutions.

On the macroeconomic forefront, the data has been pretty favorable: global industrial output is booming, U.S. economic growth accelerated in final months of 2009 and central banks are in no rush to tighten their monetary policy. U.S. non-farm payrolls unexpectedly fell in January yet the unemployment rate fell to a five-month low of 9.7 percent (albeit the economy actually shed 20k jobs).

However, the true market-moving “story of the day” seems to be the persistent worries about fiscal problems in Greece, Spain and Portugal. Concerns over the sovereign credit (and its financing + insurance) in these European countries forced investors to stay cautious, and brought DJIA below the 10,000 level for the first time since October 2009.

ADVICE FOR MY 1-ON-1 STUDENTS: As per the latest news the fiscal situation in Europe might be helped by the European Government and the European Central Bank, expect a choppy trade in the coming weeks. The markets are already perfectly set for the SHER-LOCK Market Personality, go ahead and use it in accordance with the CONFIRMATOR Trading System rules. If you have any questions or any portion of your currently studied training materials seems to remain unclear to you, just drop me an email with questions, as usual…

Republican Scott Brown won a tough Senate race to succeed the deceased liberal Edward Kennedy, giving Republicans 41 votes in the chamber consisting of 100 members, and depriving Democrats of a “super majority” needed to pass the proposed pieces of legislation. The Republican win means Obama’s plans for healthcare (mainly passing the long-debated healthcare bill), climate change, financial regulatory reform and fighting unemployment could suffer from the new power structure in the Senate.

The stock market is set to reflect the impact of the Democrats’ Debacle in Massachusetts. The Dow is now down more than a 200 points after rising to its peak levels since the recession begun.

However, true meaning of the new Senate lineup is only about to impact the financial world in the coming weeks and months. Apart from initial enthusiasm on Wall Street, caused by the fact that the healthcare sector is likely to record higher profits after Mr. Brown’s victory, the new Senate power structure also means that all consequent Obama’s regulatory reforms will meet strong resistance coming from the opposite political camp.

This will most likely affect Obama’s plans for another targeted governmental financial injections coming on top of the $787 billion stimulus package he signed in February 2009, especially the so much discussed $155 billiion job bill, which is now, after having passed in the House of Representatives, expected to leave the Senate in a new, “republicanized” version.

As many of us following the market fundamentals are very well aware of, the still lingering fears among global investors of another market meltdown were being downplayed till now by pointing to the fact that whenever the US government smells the markets are about to deteriorate again, Obama simply provides for a new bailout money, and the danger just disappears… Well, after Brown’s victory, things are not as pink-’n-bright for Wall Street as they seemed just days ago! Get ready for an inevitable market correction. TO ALL MY STUDENTS: In the FOREX market, get ready to use the ALEXANDER Trading System! We will be able to make juicy profits on the new technical trend that is just developing !! (I’ll publish another post with the technical analysis of the majors anytime soon).

Now in the 1D chart above [ click on the chart to get a bigger picture ], one can see EURUSD price development with start in April 2009 and end today, the 9th of January 2010. Note that the most frequently traded FOREX pair traded just as I have prophesied already back in August 2009, t.m. in a long-term ascending channel (red), from October onwards capped by long-term ascending trend line (brown). Also note that it wasn’t until December 2009 till the pair: A. met the predicted 1.5000 psychological Resistance, B. broke below the bottom of the ascending channel, C. descended to the Ichimoku Kumo Cloud and below (more about Ichimoku Kinko Hyo, channel and trendline breakouts in the 1-on-1 Training Course), and started to post a reversing price pattern since that time…

In reference to my very last article posted on this blog, I do not want to go deeper into why I predict the EURUSD to mostly trade sideways in a broad range of 1.3000 and 1.5000 in 2010, and thus generate excellent trading opportunities for the CANAAL (short-term) and the CONFIRMATOR (mid-term) Trading Systems, both proprietary to Gepard Investments, Inc. What I want to focus on, however, is the rather substantial correlation decoupling between the benchmark Foreign Exchange instrument and the benchmark equity index instrument…

Note that the chart you see above [ again, feel free to click on the picture to get a bigger chart ] is rendered over the very same time period as the EURUSD chart in the beginning of my today’s post. This chart, however, is for the Dow Jones Industrial Average (if you tried to plot charts for both the S&P100 and S&P500, you end with pretty much the same price curve).

One interesting thing to recognize when comparing both charts is that, starting from December 2009, EURUSD has been significantly decoupling from the DJIA and the S&P. The correlation between the two, based mostly on the investor pattern generally known as “Flight to Safety” or “Flight to Quality” and representing pouring money into the greenback’s safe haven whenever investors smell a risk-aversive behavior in equities, has now been considerably weakened. One good reason for this is that neither USA nor Europe - or China (and China in particular, since it is now the investing party in a great sweet portion of the US national debt, while -unluckily for Uncle Sam- it now perceives America as its most treasured investment) - would want a weak-greenback scenario again. Weak dollar, implied predominantly by the irresponsible actions of the US Government and the FED in-between 2004 and 2008, has been one of the primary reasons why we have experienced the 2008-2009 Great Recession in the first place …

Perfectly in accord with that widely spread habit of returning during the NYE holiday to the old year performance in order to summarize and make conclusions, I attempted to make the same effort and went through all my 2009 blog posts, mostly the technical ones (please note that on this blog, I only publish simplified, long-term market analysis and make predictions as far as my most favored future development of the selected currency majors, EURUSD in particular. In no way, however, these should be mistakenly perceived as being the sophisticated, comprehensive technical research pieces we produce at Gepard Investments, Inc. - these are only available to my students after they apply for my 1-on-1 FOREX Training Program).

I encourage you to go through my last year’s posts by visiting the Archives of this page. If you read carefully, and compare the actual predictions with the market reality, you will find out the same thing I did.

In fact, even for me, this was an encouraging fact to discover:

In 2009, none of my long-term technical market prophecies on this blog failed to come true!! In fact, those investors that took my advice to heart in the past year were able to make hundreds of pips and thus generate profit of hundreds to hundreds of thousands dollars, depending on how much money they trade with. SO HERE GOES MY LATE CHRISTMAS AND NEW YEAR’S WISH > Cheers to smart investing in accordance with the finest trading strategies ever invented! Cheers to the Gepard Trading Style!! May the year 2010 be even more fruitful for us than 2009 !!!

Here’s a grand idea. For clues on how this investment situation is perceived by the wealthiest people of our planet let us look at the high net-worth investors and their views on their current investment strategy.

Throughout 2009, several extensive surveys have been performed among some of the wealthiest individuals on the planet on what investment strategy/strategies they are using when it comes to managing their money. The Economist Intelligence Unit was commissioned by Barclays Wealth to survey 2,000 wealthy individuals around the globe and published a paper called “New Horizon, New Behavior” in September 2009. Most recently, the Family Office Channel, an exclusive group of advisors and wealthy families surveyed 100 advisers on current investment attitudes.

The findings across all surveys were consistent - wealthy clients are returning to a much more conservative money management style. But hey, that’s not all! They also plan to stay this way for the future. In other words, they are increasingly skeptical of highly complicated products like structured notes and hedge funds and are concentrating on plain vanilla liquid investments like bonds, stocks, ETFs, commodities, and currencies. Rather than use complicated option strategies to hedge the risk of a financial meltdown, they were turning to an old favorite - cash.

This - among many of the wealthiest people of our time - has led during the recent months to investing their vast monetary resources in the currency markets, or the FOREX, since we all know that SPOT FOREX IS THE MOST LIQUID MARKET IN THE WORLD. In the beginning of this year it was the greenback many poured their money into. After the March/April market meltdown (and dollar rebound based on the “return to safety” approach), however, investors swapped to other currencies, especially Euro and the Australian dollar.

I get asked by traders worldwide what is it that I prophet for the markets to do next. Gold has already posted a strong correction, drawing other commodities, as well as some of the currency majors with it. Should this mean that we are at the very dawn of another market meltdown, or a “government bubble burst” as some chronically bearish analysts would proclaim so boldly?

Well, I know for many of the hedge fund and portfolio managers out there the idea of another meltdown seems to be incredibly appealing. The reason? Once a bubble bursts out, as it did in September 2008, it is very easy for bears to ride down with the rest and make money on the implied panic. Why? Because of one of the very essential human emotions=fear. Fear, my friends, was the reason why many bears were able to make millions on the 2008/2009 crunch with a very little risk attached. Oh, when a blood-thirsty bear gets his tasty filling once, he simply wants more as soon as his stomach gets empty again.

P.S. Note that there is no doubt in my mind that what we are witnessing right now is not another bubble burst, but just a temporary market correction, and that the global recovery is already underway. I am am definitely a bottom-up investor and like to make money on the progress instead of on the fall. In any case, however, global investors should get ready for a bumpy road towards the 2010, with volatility and market risk being extremely high. For the most cautious of you out there, I recommend to stay on the sidelines, or even get away from the hustle and bustle of the city (applies in case you live in one) and visit a beach resort. For those who like to profit on high volatility, we have 3 trading systems proved to bring forth consistent profits even at times of uncertainty. On this blog page, I plan on posting (apart from a Christmas wish) another simplified tech analysis post till the end of the year. Always remember - your questions and observations are welcome at my email address marek@gepardinvestments.com. HAPPY TRADING !!

Hilary Kramer, chief investment strategist at A& G Capital Research said that: “As long as the consumer is 70% of the gross domestic product, then we can’t recover with so many unemployed and underemployed.”

But let’s face it, how real are threats of the unemployment ghosts influencing the already booming recovery? There is no doubt - unemployment is here to stay. That, of course, doesn’t mean the U.S. as well as the global economy is not recovering.

Personally, I don’t expect the employment situation to get better until at least the start of next year. Some companies may even wait until next year to begin hiring people to help their bottom line through the end of the fourth quarter. Moreover, unemployment is a lagging indicator. It is absolutely normal and even typical for unemployment to continue to inch up for several months after the DJIA and the S&P 500 trough. In other words, history shows that the unemployment rate only starts to fall 6 to 7 months after the Dow Jones Industrial Average crosses from below an important psychological level - in our case it is the 10,000 mark. It was reached in the early November 2009, so don’t expect the NFP showing positive numbers until June-July 2010.

OK, what should a savvy investor do these days? What is the best fundamental data to follow? Well, let’s be honest, the absolute worst thing an investor can do is try to time the market according to unemployment numbers! If you do this, you will miss the train and settle your long-term trades too late..

And so, investors shouldn’t put too much weight on the unemployment numbers. These numbers won’t improve soon, as employers will first try to replace their lost workforce with technology and then hire temporary workers before hiring employees full-time.

Right now, the Nr.1 fundamental story of the Fall 2009 is the CONSUMER CONFIDENCE. Yes, we all know that the GDP figures are on the rise again. That, my friend, is already history. Now, when it comes to fundamentals, the absolute superior thing you should focus on is confidence of the U.S. buyers. I strongly advise to watch the indicators like CB Consumer Confidence and Personal Spending to determine how soon the markets will recover.

P.S. Note that there is no doubt in my mind about the global recovery being already underway. The only thing we need to find out in the days to come is how fast the recovery process is going to blossom. This, my fellow traders, is the beginning of many investment opportunities, this is the dawn of big money being made at the FOREX front, too…

Opinions of experts and professional forecasters on the future course of the Dow Jones Industrial Average, the S&P 100 and 500, as well as the EURUSD (benchmark FX currency pair) vary. Some analysts and fund managers predict the financial markets to rise based on renewed “risk appetite” - the same pattern of behavior we observed in the markets before the 2008 crisis. Others prophecy the markets will decline, pointing to the fact that unemployment will need another months, if not years, to get back to the positive territory again, and the governmental financial injections will fail to have impact on the economy once the money stops coming in.

Since the time I launched this blog, I have been receiving plenty of inquiries on where the markets are going to move next, what future prediction I can draw for the EURUSD and other majors, what is my personal view on when the crisis will end, etc.

But the single most important question I have been asked was :

SHOW ME HOW I CAN MAKE MONEY ON TRADING THE MARKETS, BE IT DURING THE RECESSION OR THE RECOVERY. SHOW ME HOW I CAN GET RICH BY TRADING !!

Well, the answer is quite simple - in order to trade the markets with profit month in and month out, regardless of their fundamental condition, you must have a quality trading education. That’s where the REAL MONEY abides - no inexperienced individual has ever been able to get rich on trading without getting experienced first…

For the reason of equipping every investor hungry for profit with a cutting-edge trading education, teaching him/her the principles that helped me (and so many of my students from Hong-Kong to New York) to trade the markets with consistent profits, in late 2006 I launched the FOREX 1-on-1 Training, very likely the best online personal program on trading on the planet. The training program turned out to be overwhelmingly helpful for great majority of my trainees, since less than 2% of the 1-on-1 students have ever asked for a refund. A third-party proof of how satisfied are the people I work with can be found at r.ecommended.com.

If you would like to join the growing community of GEPARD traders and receive the best FOREX trading education available on the internet, I invite you to visit our GI website and search it for more information on how the course works and how you can apply. See you aboard the course ship, then. And happy trading!!