Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 28th of March. Which happens to be the last trading day of the 1st quarter.
HOLDING THE EURO IS LIKE HOLDING AN ICE CUBE IN THE DESERT
The only way I can describe the euro is like this... imagine you're in the middle of the desert holding an ice cube and watching it slowly melt through your fingers. That is what's happening to the euro and the euro zone. It is slowly melting away. The Trade Triangles are negative and continue to point to lower levels for the Euro v. the U.S. Dollar. A close around the 128 level will be the lowest close seen for the euro in the last three quarters.
THE DEFACTO TWO EURO SYSTEM
Today's question- is the value of a euro in Cyprus worth the same as a euro in Germany? I would argue that it's not. I would contend that a German Euro is worth more than a Cyprus Euro. The reason why, is that in Cyprus, you can not freely move your money around. It's like saying you can't move your money from New York to Los Angeles. It doesn't make any sense. There is little doubt in my mind that this is the beginning of the end for the euro.
CYPRUS BANKS FINALLY REOPEN
How would you like it if the state you lived in limited how much money you could withdraw from the bank? I'm sure you will agree that you wouldn't be happy with that type of restriction. In yesterday's poll over 80% of voters, both on INO.com and MarketClub.com, said they would pull their money out of the bank immediately. I'm sure the mindset of the Cyprus citizens are not any different from the voters in our two polls. The EU put a bandaid on the banking problem in Cyprus. The bigger problem I see is the psychological damage done to investors by the events of the past two weeks. Vote on the Poll here.
RECOMMENDED READING FOR EVERY INVESTOR
If you haven't read "Extraordinary Popular Delusions and the Madness of Crowds," I highly recommend it. This amazing book is a history of popular folly by Scottish journalist Charles Mackay. It was first published in 1841.
Click Here to view today's video
HARD TO BELIEVE Q1 IS OVER!
It's hard to believe that Q1 is over after today's close of business. What a quarter! Unless there is a monumental drop in stock values today, the indices are set to put in one of their best double digit quarters ever.
The amazing thing is that many investors have missed the move to the upside because of their fear of what was going on in the world markets. My perspective of the markets is very simple: go long when the market is headed higher and short when the market is falling lower. One can achieve that goal with a non-emotional approach using the Trade Triangle technology.
IS THE FED BETTING THE FARM?
This year, the Fed has bet approximately $255 billion on their bond buying program. Somewhere along the line (I don't know where that is), you have to ask yourself, is the FED betting the farm or in this case the entire USA? The tools that the FED are using are totally unconventional and have never been used on such massive amounts of stimulus. My second question of the day is, if this stimulus does not produce the desired results, is the risk of failure catastrophic for the United States?
OIL GOOD - GOLD BAD?
I like oil and oil stocks. I'm not a fan gold at the present time.
IS BLACKBERRY A TAKEOVER TARGET?
Early this morning I was interviewed by BNN - Business News Network: Canada's only all-business and financial news channel. I was asked about what I thought of BlackBerry (BBRY) and their surprise earnings beat of $0.22 a share. I shared with co-anchors, Amber and Tony, that the Trade Triangles have been positive on Blackberry since October of 2012. I also said that Blackberry could be a takeover target. You can watch entire 5 minute interview right here .
THE PERFECT EASTER WEEKEND FOR OUR 52 WEEK NEW HIGH RULE
Here are the three rules you need to trade the "52 Week New Highs on Friday Rule"
These are the exact rules that a trader friend of mine used to make his millions.
* Rule #1: On a new 52-week high, when the market closes at or close to its high on a Friday, buy and go home long for the weekend.
* Rule #2: Exit long position on the opening the following Tuesday.
* Rule #3: If the market opens lower on Monday, exit this position immediately.
There you have it! These are the only three rules that you need to trade the "52 Week New Highs on Friday Rule" successfully.
The "52 Week New Highs on Friday Rule" works extremely well in futures and foreign exchange.
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POTENTIAL CHAOS AHEAD
- The weekend in Cyprus
- Chaos in Italy - still no government!!
- May 19th: Debt Ceiling Suspension Expiration
Have a great trading day,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Click Here to view today's video
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