Stolper Alert: Goldman Says To Go Long EURUSD With 1.30 Target

Tyler Durden's picture




 

For months everyone was confused, like lost lambs in a sea of noise and 500x leverage, not knowing how to navigate the stormy, choppy FX seas. Now we know. For that beacon of anti-precision, the man, the myth, the legend who bats 0.000 and thus is the most certain contrarian bet in history, Goldman's Tom Stolper has spoken: "We would now recommend going long EUR/$ at current levels with a one-day
stop on a close below 1.18 for an initial target of 1.30
." Start your selling.

The announcement by the ECB today to prepare a reactivation of the SMP program but under the condition of a simultaneous EFSF/ESM program is another substantial step forward in terms of containment of the Euro area crisis.
From an FX standpoint we would emphasise the following:

  1. Using the unlimited ECB resources to anchor front-end rates has the potential to address one of the two key driving forces for the large EUR/$ decline of the last few months: the risk premium attached to sovereign bonds (or at least to parts of the sovereign curve).
  2. The insistence on strict conditionality will likely build support for this central bank action in countries with strong fiscal positions, in particular Germany. As Huw Pill and the European team pointed out, “from a normative perspective, the decisions announced today are reassuring,” given that the medium-term risks linked to moral hazard have been reduced. At the same time, Mr. Draghi insisted on the implementation of structural measures to sustain the Euro.
  3. The decision not to cut policy rates further implies that the downside
    stemming from the second key EUR/$ driving force (interest rate
    differentials) is limited at the moment.

Independent from this proposal on EFSF/ESM/SMP purchases of government bonds, the already announced centralisation of banking sector regulation under the authority of the ECB is an additional important positive step announced at the last summit and not yet reflected in the price.

 

For that reason we would now recommend going long EUR/$ at current levels with a one-day stop on a close below 1.18 for an initial target of 1.30. This trade is consistent with the recommendation of our fixed income strategy team to receive 5-year rates in the Euro area periphery (Spain, Ireland and Italy). Timing is the key risk to this trade as many hurdles remain and the exact details of the program will have to be agreed on. Markets may remain volatile as investors wait for Euro-area policymakers to back words with action.

Thank you Tom: we were lost but now we see.

PS. For those confused, this means Goldman is now selling EURUSD to muppets.

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Thu, 08/02/2012 - 13:07 | 2672869 NooooB
NooooB's picture

Waka Waka!

Thu, 08/02/2012 - 13:09 | 2672884 Lohn Jocke
Lohn Jocke's picture

HA!!

I'm long Dunder Mifflin with all the paper the Fed is going to need to get us to 1.3...

Thu, 08/02/2012 - 13:11 | 2672900 SilverTree
SilverTree's picture

I call bull shit.

Thu, 08/02/2012 - 13:35 | 2673007 Comay Mierda
Comay Mierda's picture

technical target = 1.16 based on breakout of bear flag on weekly chart.

confirmed by price target on point and figure chart  http://stockcharts.com/def/servlet/SC.pnf?c=$xeu,P

they will sell into you the whole way down

the muppet slayers are at it again

Thu, 08/02/2012 - 13:40 | 2673040 TheSilverJournal
TheSilverJournal's picture

Buy Euro's when it hits 1.17?

Thu, 08/02/2012 - 14:04 | 2673152 Jay Gould Esq.
Jay Gould Esq.'s picture

Is the verb "stolper" found in the Urban Dictionary ?

If it is not an entry, it should be.

"Man, did you see that guy who went long the euro at 1.21 ? He can barely squat on the curb and cry, he's in so much pain. Dude definitely got stolpered hard."

Thu, 08/02/2012 - 14:05 | 2673177 schatzi
schatzi's picture

you will find the name in a German dictionary and it is very funny and apt: stolper means to flounder, to stumble or trip.

Thu, 08/02/2012 - 14:09 | 2673196 Jay Gould Esq.
Jay Gould Esq.'s picture

Touche -- leave it to Goldman to hire such an "ironic" figure.

+1

Thu, 08/02/2012 - 15:11 | 2673457 AldousHuxley
AldousHuxley's picture

look back further:

http://www.forex-eur.com/images/EUR-USD-forex-chart.jpg

 

1.3 only looks good when you go back only 6 years.

Historical lows are at 0.9

 

USD      Average

1998    1.0
1999    1.0
2000    0.9
2001    0.9
2002    1.0
2003    1.2
2004    1.3
2005    1.2
2006    1.3
2007    1.5
2008    1.4
2009    1.4
2010    1.4
2011    1.3
2012    1.2

Thu, 08/02/2012 - 17:24 | 2674063 LowProfile
LowProfile's picture

I'm thinking 0.1258 before it reverses.

If that doesn't hold, then 0.116 seems reasonable, with more room to tank.

Thu, 08/02/2012 - 13:59 | 2673138 Stoploss
Stoploss's picture

Judging by the hammer handle on the dxy, 84.50 is going to be hard to hold.

Thu, 08/02/2012 - 13:32 | 2673012 strannick
strannick's picture

As for contrarian 0.00 batters my man Johnny 'Noodles' Nadler will go toe to toe with Stopler any day There can be only one.

Thu, 08/02/2012 - 13:11 | 2672888 vast-dom
vast-dom's picture

MUPPET RAPE

 

GS "sorrry we had to close our positions, sorry about your muppet limp, we did our best for you [chortle chortle]."

Thu, 08/02/2012 - 13:36 | 2673021 Sofa King
Sofa King's picture

This is what pops in my head anytime I hear a recommendation from GS.

 

http://www.mojnet.com/video-sex-pistols-and-the-muppets-friggin-in-the-r...

Thu, 08/02/2012 - 13:43 | 2673059 dracos_ghost
dracos_ghost's picture

https://sphotos-a.xx.fbcdn.net/hphotos-ash3/576103_3574328192537_9770253...

 

Here are the majority clientelle left for GS.

Fri, 08/03/2012 - 09:46 | 2675572 awakening
awakening's picture

To point out the obvious irony, congrats for finding the pic on a server belonging to FB.

Thu, 08/02/2012 - 14:04 | 2673170 acompletedouche
acompletedouche's picture

Spit out my coffee,that was funny shit......

Thu, 08/02/2012 - 13:07 | 2672870 Biosci
Biosci's picture

goddammit, i just sold my GLD puts.

Thu, 08/02/2012 - 13:07 | 2672871 Ned Zeppelin
Ned Zeppelin's picture

Coordinated propaganda. It is now a certainty that the Euro is going lower.

Thu, 08/02/2012 - 13:11 | 2672895 bdc63
bdc63's picture

If by "lower" you mean to zero, well then, yeah ...

Thu, 08/02/2012 - 13:43 | 2673064 TheSilverJournal
TheSilverJournal's picture

You forgot that it's being measured against the dollar. After this coming three week rally in the dollar, the dollar is then going to fall off a cliff.

Thu, 08/02/2012 - 13:08 | 2672872 malikai
malikai's picture

Buy that shit, muppets!

Meanwhile, look out below:

http://www.quantsig.net/img/fx_eurusd.png

Thu, 08/02/2012 - 13:24 | 2672968 blindfaith
blindfaith's picture

This is truly astonishing. Can there really be any dummies with 100K to give away on this advice?

Thu, 08/02/2012 - 13:48 | 2673093 malikai
malikai's picture

Apparently OPM has infinite wealth and trust. Thus, Goldman is #1!

It can't last forever.

Thu, 08/02/2012 - 13:08 | 2672874 Neethgie
Neethgie's picture

LOL, great intro, was perfect.

Thu, 08/02/2012 - 13:08 | 2672875 transaccountin
transaccountin's picture

lolz

Thu, 08/02/2012 - 13:13 | 2672878 bdc63
bdc63's picture

Blue Horseshit says buy euros ...

Thu, 08/02/2012 - 13:09 | 2672881 Jlmadyson
Jlmadyson's picture

BWHAHAHAHAHAHAHAHA.

Hell to the no!

Thu, 08/02/2012 - 13:09 | 2672887 Al Huxley
Al Huxley's picture

Wow, it seems so counter-intuitive, since this appears on the SURFACE to be obviously bad advice based on the situation in Europe, and almost certainly IS bad advice, based on Stolper's record, so who are they going to trap?  Or is it the old 'reverse-reverse-reverse psychology trick - it looks like bad advice so it must be good advice, but everybody knows Stolper only gives bad advice, but since everybody knows that, he's setting up all those who now habitually fade him...  fuck it, I've confused myself now.

Thu, 08/02/2012 - 13:11 | 2672902 bdc63
bdc63's picture

don't overthink this ... just sell

Thu, 08/02/2012 - 13:13 | 2672912 hedgeless_horseman
hedgeless_horseman's picture

 

 

don't overthink this ... just sell run algo

Thu, 08/02/2012 - 13:14 | 2672919 strongband
strongband's picture

you've been stolped out!

Thu, 08/02/2012 - 13:19 | 2672943 Paul Atreides
Paul Atreides's picture

Anyone still in this shithole of a market is just asking for it either way....

Thu, 08/02/2012 - 13:27 | 2672985 blindfaith
blindfaith's picture

MEMO:  tell my retirement fund manager that he should sell.  Or, it is buy...that either way thing confused me.

Thu, 08/02/2012 - 13:42 | 2673058 ArrestBobRubin
ArrestBobRubin's picture

Muad Deep

Thu, 08/02/2012 - 13:22 | 2672958 tarsubil
tarsubil's picture

The trick is that both goblets are poisoned.

http://youtu.be/E2y40U2LvKY

Thu, 08/02/2012 - 13:22 | 2672962 Paul Atreides
Paul Atreides's picture

Inconceivable!

Thu, 08/02/2012 - 14:08 | 2673190 PlausibleDenial
PlausibleDenial's picture

Clearly!!

Thu, 08/02/2012 - 13:23 | 2672967 fahmahbob
fahmahbob's picture

"All right. Where is the poison? The battle of wits has begun. It ends when you decide and we both drink, and find out who is right... and who is dead."

-Princess Bride

Thu, 08/02/2012 - 13:25 | 2672973 lizzy36
lizzy36's picture

Double reverse with a penis touch, John Travolta style....duh ;)

Thu, 08/02/2012 - 13:31 | 2673005 disabledvet
disabledvet's picture

What was the story again?

Thu, 08/02/2012 - 13:59 | 2673141 tradewithdave
tradewithdave's picture

You said exactly what I was thinking. The double reverse. In football you can use it once a decade.

Thu, 08/02/2012 - 15:18 | 2673491 PontifexMaximus
PontifexMaximus's picture

Ur rite, go long EUR.

Thu, 08/02/2012 - 21:10 | 2674542 Clever Name
Clever Name's picture

"You're trying to trick me into giving away something. It won't work."

Thu, 08/02/2012 - 13:11 | 2672903 agent default
agent default's picture

Is 1.30 EUR/USD or USD/EUR?  I am confused with this guy.

Thu, 08/02/2012 - 13:12 | 2672906 markar
markar's picture

I've never traded currencies. What's the best way to short the Euro based on this?

Thu, 08/02/2012 - 13:14 | 2672917 kito
kito's picture

etf is fine. try EUO. leveraged short euro

Thu, 08/02/2012 - 15:02 | 2673417 jvetter713
jvetter713's picture

Does EUO have the inverse?  It's always better to short the bull than long the bear...at least for the leveraged ones.

Thu, 08/02/2012 - 13:18 | 2672939 DeadFred
DeadFred's picture

I like puts on FXE if you can do options. Goldman is doing the world a service on this one, anyone who follows this advice shouldn't be allowed to possess money.

Thu, 08/02/2012 - 13:43 | 2673046 Arius
Arius's picture

always doing God's work ....

lord blankfein's interpretation: to separate fools from their hard earned cash

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