Courtesy of Chris Kimble.
The “Power of the Pattern” ask on 1/17 if the downgrade of European debt could be good for Europe in the short-term? (see post here)
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Since S&P downgraded European Debt, the Greek stock market ETF (GREK) rallied over 40% in 14 days! L Was the downgrade good for Europe in the short-term? I will let you be the judge of that, yet GREK did have a decent two weeks following the news break.
Last summer when S&P downgraded the debt ratings on U.S. Government debt, what did the long bond due following the news? Another nice rally!
What can we gleen from these two situations, when concern is high and a story becomes too popular? When a news event becomes “too popular” implement or consider the “RACECAR” strategy. (see racecar strategy here).
