Written by Administrator | 26 October 2011

I have been  watching this trade lately, and  it finally looks like retail shorts are giving up on their positions. When they do, the down trend will be free to continue. If you believe the Euro situation is fixed, then you believe this is a fool’s trade. However, I am looking at a few fundamentals as well.
1.    Bank of China released earnings today that missed targets. China is of course AUD's largest trading partner.
2.    The worlds largest ore producer released earnings that showed the first down quarter in over 2 years.
3.    There is wide speculation that the RBA will lower rates by .25 points on November 2
4.    Whether you believe there is an Australian housing bubble that is about to pop or not, anecdotal evidence show whole neighborhoods with for sale signs in them. Not a good sign.
5.    I don't believe the European situation is fixed, or that they can even fix it. These latest steps are only chewing gum on a worn out tire.
I will keep looking for a signal to short here, and when I do, I will need consider aggressively going after it.