25 European Banks Fail — Who Cares?
You shouldn’t care that 25 Eurozone banks failed the most recent stress tests.
Nor should you care that those tests revealed total Eurozone banking exposure to bad loans is greater than $1 trillion.
Nor should you care that the tests did not adequately account for a potential (perhaps inevitable) deflationary scenario in southern Eurozone countries … in order to avoid too many more banks failing the stress tests.
If you do care, you’ll probably lose money …
On Friday, a rumor was leaked that these banks failed the test. And the market rocketed higher.
Clearly what matters is that investors expect public officials will pledge more money to help fledgling economies and institutions.
More juice. Markets go higher. Everyone is happy.
Except the majority of traders caught trying to make logical decisions.
I admit: I’ve been in the “logical decisions” camp more times than I care to remember. But market prices discount news quickly. So logic usually leaves you one or two steps behind prices. This is why I much prefer using a proven trading framework focused on price action. No guessing and no “forecasting of events.”
Understanding the psychology of price action gives you a tactical advantage. Richard Wyckoof proved it. He exploited this advantage till he was living in a mansion in the Hamptons. After building his success, Wyckoff offered up this advice:
“Listen to what the market is saying about others, not what others are saying about the market.”
Just listen – the market speaks through price action. I listen with Elliott Wave Theory. It works like a good pair of noise-canceling headphones. In my twenty-plus years of studying Elliott Wave, I believe it’s the best theoretical representation of how human psychology shapes prices.
Listening to it has helped me avoid common pitfalls. And it has let me profit handsomely too. In 2013 my track record finished at an 84% rate of return.
To date, my trading boasts a return of 71% in 2014.
So what is Elliott Wave saying about the direction of the euro right now? I’m glad you asked …
A break below 1.2499 adds confidence another major wave down is underway. I’m looking for a test of major support near 1.2040. A move back above 1.2885, however, would suggest a more complex correction is evolving. Such a move would stretch to the 1.3000-level with scope as high as 1.3240.
That is what Elliott Wave says. All you have to do is listen.
I spent years paying my dues. My consistent success in markets came once I threw “logical decisions” out the window and let price action tell the story. Are you ready to do the same?
Don’t stay on the treadmill forecasting events. You may pinpoint exactly what will happen in Eurozone economies. Or Chinese politics. Or Middle Eastern relations.
But I’m telling you: None of that matters to real traders. Price action does!
The only way to make consistent profits is to create a system that blocks out the noise so you can hear what matters. Or find someone else to do it for you.
I have 11 reasons why I’m that someone else … with something proven to block out the noise. Watch this video where I explain how I can help you trade right and earn real profits.