Many economists were looking for more bad numbers out of Europe on Tuesday, but received a pleasant surprise when the Euro-zones PMI was released. The number entered a positive rating of more than 50%. The 50% line is a little arbitrary to predict any recover, but it does mean that more than half of all businesses are stepping up their purchase of materials.
Pessimistic views had been on the rise in Europe for more than 6 months and the confidence level reached dangerously low levels in December. Now the same group that could see not light of the end of the tunnel six weeks ago thinks that the world’s economy is not going to stagnate as previously predicted.
Even though most of the expansion came from Germany, it does support the European Central Banks view that contrary to popular belief the ECU has been stabilizing over the past quarter and the dire predictions of a sever “double dip” recession is not on the horizon. The only problem that it exposed is that the economic gap between the northern countries of Europe and its southern neighbors continues to grow.
With this good news in the market even the most pessimistic predictions are that the economy of Europe will at worst hold its own with the rest of the world and at the best it will surpass even the rosiest predictions.
Should you buy stocks now that rely heavily on Europe?
Would this be a good time to buy Gold?
I believe that only time can answer these questions, but I know of a couple of things that will work in any market environment.
Discipline and reaction are the keys.
Reacting will create opportunity. Recognizing opportunity and the discipline to take advantage of it is my specialty. That is what produces winning trades.
I teach my students discipline and how to make it work for them in any type of market condition. I can teach you too.
To learn firsthand how I would trade the surprising news in Europeit, speak to one of my representatives and sign up to work one-on-one with me here:
http://averagejoeoptions.com/qual/
As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
http://averagejoeoptions.com/qual/
