How to Make Money on Volatile Currencies

Certainly investors have taken notice of the wild swings in the currency markets in recent weeks. Clearly, this is one of the reasons for gold’s strength, even in the face of a stronger dollar. People are simply losing faith in fiat currencies.

The euro is a prime example of the type of currency volatility we have seen recently. Just back in December, the euro was trading over the 1.50 mark vs. the greenback. Due to sovereign debt issues (think Greece) the euro has slid steadily and rapidly to trade currently around 1.36 vs. the dollar. Many investors are left wondering if the selling is beginning to subside, and although it may be temporary, the outlook for the euro is bleak.

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Let’s face it, even if Greece is “bailed out” and given the help it needs to get its debt under control, Spain, Portugal and numerous other countries are standing right behind it in line. Bottom line is the euro zone debt problem is not going to go away anytime soon. [Read the full article]

If you want to bet on a specific country or sector, it’s tempting to think any fund that focuses on the area in question will do. But even funds that seemingly target the same narrow niche typically are far from interchangeable. As with more diversified funds, it’s important to investigate the available choices–their portfolios, strategies, and more–in order to find the most suitable match for you.

Different Paths to IndiaIndia has received much attention from investors, owing to its rapid growth rate and (except for that nasty slide during the recent bear market) its astounding stock-market gains. But the funds that target that country–and there are many options to choose from, both open-end and exchange-traded–don’t necessarily resemble one another. If you’re looking for a large-cap fund that will own the big, recognizable companies, for example, some of these funds aren’t appropriate at all.

Take Matthews India (NASDAQ:MINDX – News). [Read the full article]

The cyclical tug of war between bulls and bears has temporarily been replaced by a different kind of war. This other war is more short term — it’s the tug of war between the technicals and the fundamentals.

Market technicians have had complete control since the new year began. This explains why the market is acting completely independent of the news. When these guys have control it can be maddening. No matter how good or bad the news is, the market refuses to react. It’s like a boat out at sea that only follows GPS navigation while ignoring the objects on the radar. This strategy doesn’t work in the long run for obvious reasons.

If you find yourself feeling overly frustrated when the market doesn’t rally on good news or when the market doesn’t go down on bad news, it’s usually because the technical traders are in control of the action. There are a few rules to follow when these circumstances prevail.

Bear with me as I switch from a boating analogy to basketball. [Read the full article]

From 1990 to 1997, Kevin Haggerty served as Senior Vice President for Equity Trading at Fidelity Capital Markets, Boston, a division of Fidelity Investments. He was responsible for all U.S. institutional Listed, OTC and Option trading in addition to all major Exchange Floor Executions. For a free trial to Kevin’s Daily Trading Report, go to tradingmarkets.com.

The SPX made it 4 straight up days on Friday with a +0.2 gain to close at 1109.17, and was +3.1 on the week, which is the best week since November. It hit the 1110 .618RT to the 1150.45 high and the 180 degree angle from 1044.50 at 1110.14, with the intraday high of 1112.42 and closed at 1109.17. The USD hit a new rally high on the Fed bank rate increase, and crude oil closed above $80.

The rally off the 1044.50 low in the key price zone and 1047 200DEMA hit +6.5% with the 1112.42 intraday high, so the anticipated reversal zone has been productive for traders. [Read the full article]

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