This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Watch European Central Bank for Opportunities to Make Money on Policy Moves

For economists, this is a recipe for the value of the euro to fall relative to the value of the dollar.

Since the ECB telegraphed this move, the hedge funds positioned themselves accordingly.

The early results: the euro plunged to a four-month low against the dollar after the ECB announced the package, falling 0.7% to $1.3503 from above $1.36 before the central bank's rate cuts.

People are making money off of this change in central bank policy, in short.

I believe that Mr. Draghi could make the same argument that Mr. Geithner made in the earlier instance. The ECB does not have the goal of helping hedge funds to make billions of dollars. The ECB is just trying to prevent the eurozone from falling into deflation.

If some benefit from such a move, then so be it!

Investors, keep your eyes open for such opportunities. They are more frequent than you might guess.

Two final comments on the ECB's actions.

First: psychologically, I believe that the ECB had to act in order to keep European financial markets relatively stable. Stock prices rose after the rate changes were announced.

This is not unlike how Geithner saw his responsibility during the Great Recession.

My second point is this. I don't believe that these actions or even moving to a policy of quantitative easing will get the eurozone economy growing more rapidly in the near term. I see the dilemma being faced by officials in the eurozone as one of a major economic transition, a transition that will take time and concerted effort.

Many members of the eurozone need to reform their governments, substantially reduce corruption, adjust labor union power, and restructure industries. This is going to take much effort, much time and much pain. It is not altogether sure that the European Union can pull it off.

But, for now, the monetary policy of the ECB is the only stabilizing influence in the European markets. It must act, even if it is only keeping the flood from spilling over the dyke.

>>Read More:

How Apple iPhone's Ad Hints at Its Next Big Thing

The Expected Rise and Inevitable Fall of MannKind

GM Unveils Ignition Switch Internal Probe Details

Clorox Insider Trading or More Golf Course Chatter Among the Big Dogs?

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs