Posted by: jhamon | March 3, 2010

MysteryHedgie: Record Euro Shorts Portends A Bounce

Connecting the dots between record speculative shorts in the Euro (see CFTC chart below) and the headlines “US said to tell Hedge Funds to Save Euro Records” and “Banks summoned by EU to Discuss Sovereign CDS Market” and the prospect of a “short squeeze” in the Euro to 1.40+ has developed…

The temporary government FX rescue underpins risk assets, especially gold, ready for $1200 once more. With hedge funds generally at the low end of traditional exposures, call options on a variety of stocks and commodities, trading near two year low implied volatilities, are a sensible limited risk way to participate, should you choose.  The anniversary of the major 3/6/09 S&P low looks to be cause for a risk asset celebration; we don’t have to beware the Ides of March for another 12 days….

Euro Shorts Ready For A Pounding?

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