Short Italy and EUR-USD at Levels

Positions in Europe: Short EUR-USD (FXE); Short Italy (EWI); Long Germany (EWG); Sold Sweden (EWD) today


Yesterday we shorted Italy via the etf EWI in the Hedgeye Virtual Portfolio and wrote a note titled “Shorting Italy: Uncertainty Portends More Downside” in which we presented the fundamental and fiscal headwinds facing the southern European economy over the near to intermediate term.  


Below are our levels on Italy’s equity index, the FTSE MIB. The market has move down -17% since the beginning of May and we think there’s more room to run, especially in the coming weeks as Italy’s debt maturity schedule ramps up (see second chart below).


Short Italy and EUR-USD at Levels - 1. ME


Short Italy and EUR-USD at Levels - 2. ME


Today we shorted the EUR-USD via the etf FXE with the pair moving towards our intermediate term TREND line of resistance at $1.43 (see chart below). 


Short Italy and EUR-USD at Levels - 3. ME


We sold our position in Sweden (EWD) today on concerns that its banks may see downside into and out of the release of the second round of European Stress Tests this Friday. Already today we saw a strong negative divergence from Swedbank, Skandinaviska Enskilda Banken, and Svenska Handelsbanken of -3 to -5% day-over-day that dragged down the broader Swedish OMX 30 index.


Matthew Hedrick


Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more