Traders on hopping on the euro slide! Following the significant weakness in the euro last week the Eurozone's currency hit new lows of $1.2233 last night. There seems to be no end to the pervasive doubts over the European Union's chances of success with its debt package. Overall pessimism about the fate of the monetary union reigns supreme. While I am definitely not considering an attempt at catching this falling knife, I do see a short-covering rally possibility as short positions in the currency reach record highs and sentiment is extremely bearish. Other notable news, the Shanghai Composite tumbled 5.1% last night as the prospect of central bank tightening pressures equity prices. While the PBOC's actions are likely correct for the long-term health of the country, equities will suffer.Gold looks absolutely fabulous. After hitting new all-time highs last Wednesday of $1,249 gold took the rest of the week off consolidating recent gains. Currently trading at $1,228 gold looks primed for an explosion higher. My thoughts on a possible counter-trend move in the euro would lead to selling in the dollar helping to spur buying in gold. I am playing this move through NYSE:GLD, I have been long and will continue to be long; I see no reason to be a seller here. I also bought $125 June calls on GLD two weeks ago. I am considering adding to my call positions within this high-level base as volatility has calmed in the last few days lowering premiums.
