Mike O'Rourke at BTIG lays out some potentially bullish facts -- most notable is the fact that the anti-euro trade is getting ridiculously crowded.
This all sets up for a showdown this week. It is highly likely that policymakers on both sides of the Atlantic will want to drill home the point that they were serious about the package announced a week ago. If the ECB can continue to sustain the improvements in sovereign yields, the next battle ground will likely be the Euro currency. If stability is established there, it will also have a calming effect on other markets. Speculative short futures on the Euro have risen to record levels and are close to double the previous peak registered in 2008 (see chart 1). In addition, Euro speculator longs as a percentage of positions are essentially at all time lows and hedger longs are as a percentage of positions are at all time highs.
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