Adopting a Wait-and-See Approach

 | Dec 12, 2011 | 4:02 PM EST  | Comments
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If it weren't for the CurrencyShares Euro (FXE) down here at $131.34, I would be tempted to think that we could bounce right back. Instead I am worried about having to go to DEFCON 2 soon, which is what I said I would have to do if the FXE took out $131, the critical level we have bounced off of two other times.

Plus I don't like to see gold so low. It shows that the IMF isn't coming to Europe, and the printing of euros to backstop the countries that are actually trying to get it right isn't going to occur.

Why not go to DEFCON 2 right now? Because it has paid to wait to see. The fact that the market did not break down in the last half hour intrigues me and makes me want to see what the Germans do tonight. They watch the euro like a hawk, and market participants know it.

So I am giving this market the benefit of the doubt for the next 24 hours before going on totally heightened awareness that something out of Europe will rip into our markets and give us a price break that will be reminiscent of the end of September.

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