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8/3/2005
Victor Niederhoffer on the Euro

The recent release of tension in the euro, dropping below one euro = $1.20 then rising to a two-month high at one euro = $1.23, raises numerous questions:

  1. Is this a setback for certain followers who have been reaping considerable profits by playing the dollar from the long side, after losing heavily on short dollar positions in the $1.30 area? Let us hope not. All levels of the market ecosystem are sorely needed for it to function smoothly and accomplish its role of continuing its existence and enabling the strong to prosper and increase.
  2. Is this a terrible instantiation of the market's tendency to punish those who have the hubris to truly believe that whenever they have a drawdown of 30% or 40%, there is a prospective tendency for a tremendous bounceback?
  3. The unrealized losses to the Sage in the second quarter on his dollar position from the first quarter will now be reversed by at least 25%.
  4. Will this change in trend be a pilot fish for many other changes in trend, and which will be the next to turn?
  5. Is there an inordinate tendency for trends to change given:

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