As the European Governments, primarily Germany and France, contemplate what to do to save the Euro, the Union stands on the precipice of collapse. This is having a detrimental effect on the global economy and the US Markets. The recent sale of German Bunds that failed so sell the full allotment shows that there is a serious worry about the health of Europe. Make no mistake, a collapse of the Euro Zone will trigger a collapse in the global economy which may take at least 5 years to recover from.
We need bold action from the European leaders.
Since my last post on November 10th suggesting that now is a very bad time to be bullish, the market has plummeted 8%. This is nothing compared to the volatility and decline we will see if European leaders and the ECB are not bold and aggressive.
Monetary loosening and devaluation of the Euro due to quantitative easing to fund the bond purchases required to support the debt of Italy and the other PIGS (Portugal, Ireland, Greece, Spain) is the only option.
Now is still a very bad time to be bullish.
Understanding the direction of the market is critical to success. Whether the market moves up or down there are way to profit. Looking at inverse ETF’s in a down market can be a good source of profit.
5 Day Return on US Inverse ETF’s
FAZ – Direxion Financial Bear 3X Shares – 17.44%
SPXU – ProShares UltraPRO Short S&P500 – 14.9%
TZA – Direxion Small Cap Bear 3X – 12.55%
QID – ProShares UltraShort QQQ – 11.46%
DXD – ProShares UltraShort Dow 30 – 8.88%
Take care of your money and your portfolio.