Where is Market Heading Next

Recently I read an article about making money on internet that made me think about how difficult it is to survive in competitive business. And then I got to think about what my friend said once how everyone, if they had a choice, would prefer to work for the government. The same seemed to have happened in Greece.

And it seems that problems over there have been swept under the rug again. At least that is what the market is telling me. Euro started to go up against the dollar like all the problems are resolved now. But the basic underlying problem of overspending and inefficiencies remain. They are talking so much about cutting spending but that alone won't do. Until the address the issue of how difficult it is to run the business in Greece (and most other countries in Europe), not much can change. This over regulated economy can not depend on public sector for employment, and when a small business owner has to worry about supporting something like three different bureaucrats, he can not think about adding new employees but rather have to worry how to barely survive. The amount of red tape that is keeping all those countries (from Greece to Portugal) from experiencing dynamical economical growth is not being reduced. Rather, they are just planning on cutting salaries and benefits. But nobody is talking about structural changes that are badly needed. Everyone seems to complain that they will not be able to get that government job that they desperately want. What a waste of human energy and potentials!

So, this leaves me thinking of how is all of this going to effect currencies? I really do not see why Euro should be going up from here based on solving Greek problem alone. On a day like today, I really will go short Euro and put my stop loss above recent high.

Greece Worries Euro

It seems the market is getting a bit cautious about Euro. Greece, so it seems, will not be able to keep on paying its interest on debt, and will probably need more help than it was promised. How much can this effect euro? I think nobody knows but if the problem is not contained to Greece alone and it spreads to other countries, then the euro can get on a par with dollar in no time.

"Without another disbursement of funds before mid-July, we face the real http://www.blogger.com/img/blank.gifrisk of the first unorderly default within the eurozone," Wolfgang Schäuble - German finance minister wrote in the letter obtained by the Guardian. "Any additional financial support for Greece has to involve a fair burden-sharing between taxpayers and private investors." You can read a full article here on Guardian web site

Real Time Trading for Nov. 25, 2010

Today the market will probably be active only during morning hours on account that it's Thanksgiving in the US.   EUR/USD is in downtrend, but hitting some short term support level around 1.3310.

9:55  Market is retesting support line below 1.3320

9:58  Decided to get in against the trend as it is very likely that the market might bounce back on profit taking.

11:00 Stop loss hit as market broke through support level.