Today is Friday, so no more days are left until today, which should make the counting go away, at least for two days (oops), and for any one who cares that it is Friday, it should bring some relief to a week in the market that has left me a bit seasick …

Earlier this week, a reader wrote in and asked me about where the euro/usd was going.  If you recall, I told him I don’t predict, but I offer a general sense of movement.  The context of that article was this – “Way back in May and June, the breathless media was reporting the imminent death of both the euro and euro zone.”  The first word I wrote and then scratched for this sentence was “funny,” but the truth of the matter is that media behavior is far from funny; it is a problem that creates havoc for investors and traders. 

Putting that aside, the following excerpt supports what I told that reader who wanted to know where the euro/usd was going.  I suggested he look at the economic growth of the euro zone compared to the U.S.

DUBLIN (Reuters) – European economic growth accelerated sharply in the second quarter of 2010 as Germany’s best performance since reunification more than made up for the struggles of Spain, Ireland and recession-ravaged Greece.  A forecast-beating surge in German gross domestic product combined with a solid if less impressive rise in France to push the aggregate GDP growth rate of the 16-country euro zone to 1.0 percent from the previous quarter and past that of the United States, which is showing signs of flagging.

The news from Europe is good to be sure, and will help the market right the recent listing to a degree, but the economic achievements from Germany and France are not the end of the road.  No, the global economic recovery is far from complete because mixed in with that is the economic transformation I wrote about in the Trader Ed Newsletter that comes out every Friday.  The transformation is historic in proportion, but even if it were not, the fact is that in any transformation, upheaval is a part of the process, and that is what we are seeing in the U.S. as it moves more slowly through the same economic transformation Europe and Asia are experiencing.

So, we should expect choppy seas for some time as enormous change moves inevitably forward, and we should expect the market will list now and then, but what we should not expect, even if the breathless media tells us to expect it, is that the market will sink to the bottom. If nothing else, the market will float on the buoyancy of corporate earnings and the more rapid economic recovery of Europe.

Trade in the day; invest in your life …

Trader Ed