Will all of this European negativity derail U.S. stocks? It might, but equities are resisting this headwind. A falling euro usually pulls U.S. equities down with it, but the wild card here is cash on the sidelines. January was a record month for fund inflows, and there is still plenty of dry powder available.
Also, many of the correlations that bedeviled markets last year have faded, as correlations often do. Just because the correlation trade worked last year -- in this case, that between a falling euro and falling U.S. stocks -- doesn't mean it'll work this year. Markets are always changing, so don't fall into the trap of blindly believing that they've become static. Just when you believe you have the markets figured out, they have a way of pulling the rug out.
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits
Ed can be followed on Twitter at twitter.com/edponsi
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas