Quick market & euro update

Last Sunday, I published a post stating that we had an extremely good shorting opportunity, and that NOW was the time to short. Call it luck, but the fact is that the markets dropped nicely, as they have been for the past 6 or so sessions.

Today, we broke all short term supports, and it's not only the lowest close for the year, but also the lowest close since September 2009. The markets have already traced back 10 months and we are about where we were about a whole year ago.

Hard to forecast from here. I would like to see another relief rally so that I can sell into it (the previous was too short lived for me to be able to increase my positions in a sizeable way unfortunately), specially since we are in a short term oversold position, but one cannot exclude another drop from this oversold position as there aren't really any shorts to cover, the bears having been slaughtered by 15 months of continuous rallying and the bulls never ever doubting the new bull market are already fully invested, if not invested on margins...

Today saw a major rally in the USD — which is something I didn't think would happen, specially in this magnitude against the Euro:

But the Euro managed to stabilise where the markets kept on dropping. I'll keep a bullish standpoint, although I am thinking I might have been after all. But the reason why I remain bullish on the Euro, is that it managed to make sizeable gains against other currencies, like the CAD and AUD, which I have also shorted against the EUR. So all hope is not lost for the Euro yet, and for my Euro trade: