After tracking them for the past couple weeks and speaking with multiple analysts and traders I took some small positions today in two rather obscure ETP'S. Definitely not giant volume things, but certainly a slant that doesn't get much mention: direct currency trading. Primarily the Euro vs. the Dollar.
I am big on macro, following people like Lyn Alden and Jurrien Timmer who can provide major technical backup from a supreme macro standpoint to a novice like me. Solid economists. And I have read ALOT of Friedman. So that's what lead me down the hole of looking at currency ETFs. So why trade them?
Simply put: because everything else is all over the place, Gold is obviously manipulated, and digital assets are stagnant.
My thesis is that the Euro is completely broken and it should not be hard to make money off how broken it is. Just about every currency on Earth, you could argue, is incredibly broken right now, but despite domestic inflation, a migration to dollars and US debt has been and is still on going. The dollar is the best turd in the toilet.
What is supposed to be the second best may be the worst.
Hence here are my positions (both with armor.)
EUO
UUP
UUP I have a 20% upside target on and a stop loss at 10%.
EUO I have a stop loss at 10%. I have no upside limit because I see no downside. I can elaborate based on research I have done but it would undoubtedly devolve into a political shit show so I won't.
As this stagflationary environment continues to unfold, I will probably step into and out of UUP and its counterfund on a short term basis. I am hopeful to increase exposure into EUO over time.
Just a disclaimer both are risky. EUO is double leveraged. So I am keeping a very close eye on both, but I don't view them as risky as some of the shorts I see people doing or even some of the option trades. And again, I have research I have done into why positive bond yields may actually spell doom for the Euro.
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