The headlines favored the bears but it was the bulls that started the week with the momentum. Much of the initial excitement was due to China and Greece, which seemed less likely to leave the euro as soon as some have predicted, but a downgrade of Spain (once again) nearly ruined the party. This crushed the euro and pushed the dollar to 2-year highs.
For those of you that subscribe to our Weekly Wrap, we said the best way to play a rising dollar would be the PowerShares DB US Dollar Index Bullish (UUP, $22.80, down $0.02). Those looking to short the euro could use the CurrencyShares Euro Trust (FXE, $124.36, down $0.12) which has fallen over $3 since our update. Both index funds trade options.
Gold ($1,556 oz., down $13), which was doing well, saw a sharp selloff after trading up to $1,584. We have said we expect gold to test $1,450 before reclaiming $1,600 but we like the yellow metal at these levels.
Oil spiked lower on the news before finishing flat at just under $91 a barrel. (continued…)