Yesterday, at the close, the most lucrative "strategist" in the history of FX, Goldman's Tom Stolper, moments after he was closed out on his EURGBP long reco [6] with a 2.8% loss in one week, came out with a new note, refuting his previous long-held view that in the long run the EURUSD is going much higher, specifically saying the following: "Once again we face rapidly rising uncertainty with regards to the next leg in the never-ending Eurozone crisis. Many of the features, including the unpredictability of the next headline during the final days of a bailout negotiation have been seen before, many times in fact. Short EUR positioning is not stretched yet and the EUR still looks like the natural hedge in case the situation in Europe derails more systemically. Although EUR/$ implied volatility has risen, it remains at levels that are well below those seen in past periods of stress, so options are not prohibitively expensive. The Euro has already responded and this move has pushed us beyond the stop loss in our long EUR/GBP recommendation. Moreover very near-term risks are once again skewed to the downside and a move to EUR/$ 1.25 or even lower remains entirely possible depending on the progression of the negotiations and the flow of headlines. The lack of clear majorities in the Italian parliament and the inability of the Greek government to deliver the agreed reduction in public sector payrolls all add to tactical downside risks here." We promptly took the hint and the second the note hit the tape, we advised on what is the only logical trade.
Another Stolper alert: "and a move to EUR/$ 1.25 or even lower remains entirely possible" Time to go long
— zerohedge (@zerohedge) March 19, 2013 [7]
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What happened next should already be quite obvious.
[8]
70 pips higher we took profits as we don't want to be too greedy.
We know we can rely on Stolper to be out with yet another money-making trade (anti) recommendation shortly.