It seems the new reality of the "market" (ha!) is as follows:
(1) Prices move down based on concrete, firm, real, economic data showing things are going to hell in a handbasket;
(2) Prices move up based on politicians offering ceaseless reassurances that things are going to be juuuuuuuuuuust fine, so don't you worry your pretty little head about it, m'kay?
Call me cynical, but I'd trust data before a politician any day. We got both of the above within the span of minutes this morning. The economic reports came out showing the economy is worsening, and the equity markets – sensibly – went quickly down. Then, with eerie timing (cue spooky music!), we got the latest announcement of yet another program to Save The Euro, and both the Euro and equities went ape-shit vertical.
I don't trade the FXE very often, but I entered a short position in it after that big pop. I remain lightly committed (30%) but totally short. Someone is lying to you, and I don't think it's the data.
