Everyone Hates The Euro – Is It A Good Short Term Pick?

Everyone Hates The Euro – Is It A Good Short Term Pick?

Flipping through the Wall Street Journal Online, there’s not much love for Europe or the Euro right now, as headlines read:

  • EU Worries Push Stocks Lower
  • Europe Contagion Infects Global Markets
  • Turmoil Helps Push Euro to a 14-Month Low

(For some further fun reading on being a WSJ contrarian, check out our fun piece on Using the Wall Street Journal to Gauge Investor Sentiment).

Sovereign debt is getting downgraded by the day.  Trade-Futures.com reports just 5% Euro bulls in its Daily Sentiment Index.  And heck, even we ran a piece about why you should short the Euro.

Perhaps you should – eventually – but I’m going to step in and say that, with all that negative sentiment, it’s probably not the wisest move, at least not right now.

The Euro probably is toast.  The problem is that everybody knows that.  And when everyone is on one side of a trade, you can be sure that pendulum is going to swing back sharply in the near future.

It’s been said that the market does a fine job of extracting as much money from it’s participants as it can.  So don’t let your emotions get the best of you.  Wait for the Wall Street Journal’s “The Eurozone Shows Promise” stories – and then short the hell out of the Euro!

Euro Price Chart
Courtesy of StockCharts.com

Shorting the Euro has been a one-way trade in 2010.