Market Shrugs Off Everything

The general market is not fazed by the possibility of major problems in Europe. Think of around this time last year. Greece bond yields were screaming through the roof and the market was screaming ever higher. Then, when the SHTF, the market finally reacted hard. Well, I look at Irish and Portugal bond yields and something HAS to give. Yes, Portugal is relatively small, but just wait until a bailout of Portugal damages Spain. EU, at best, will need to tap its credit to bail out more members KNOWING Spain is just around the corner. I just do not see the Euro staying above 1.40 here.

I started a heavy position in UUP calls today, both 21's and 22's. I would have preferred getting FXE, but the spreads are way too big and I tried to set a bid all day with no takers. Plus, the position I was going for was probably large enough that I wouldn't have gotten filled unless I moved over to the ask. The dollar index has around 50% weighting to the Euro, anyways. UUP is extremely liquid and a very tight spread with options. First time I have ever placed a currency bet. We'll see how it works out.

My overall strategy would be working out just fine right now if I wouldn't have overweighted VXX. VXX is just getting punished each and every day and my positions are far underwater. GLD is doing wonderful. TLT is treading water. But, VXX, ouch!

We'll see if the market reacts at all to a government about to descend into a very mild form of political chaos. Looking for some more volatility to end the week. Today was a fairly bland trading day(except first hour).