OPENING POSITION
August 2002
Even the most casual reader of STOCKS &
COMMODITIES magazine can tell you this much: Traders can make money at
the best of times and at the worst of times. And right now, we are going
through what seems like the worst of times, not only domestically, but
globally as well. In the US, the nation that for a long time has been viewed
as the economic giant of the world, the picture is far from rosy. With
one company after another being hurt by backlashes, disappointing earnings
news, and investor interest conflicts, it's no surprise that investor confidence
has slipped to very low levels. And the weakening US dollar doesn't help
the situation.
However - and this is a big however - a weak currency doesn't
have to be a negative factor. With the US current account deficit expected
to rise from 4% Gross Domestic Product (GDP) to more than 5% in 2002, the
weaker currency should be used to bring in more capital inflows. A correction
in the US dollar could be long overdue. The question is whether the recent
decline in the dollar is a correction or the start of a downtrend.
To find out, we spoke with foreign exchange
expert Cornelius Luca in our interview this month. He provides valuable
insight into the foreign exchange market and a look at the factors that
affect it. But be careful: his intriguing story may tempt you to participate
in the currency markets without sufficient knowledge. Fortunately, technological
advances have made it possible for individual traders to access the foreign
exchange market that once was reserved for banks, corporations, and high-net
worth individuals. Mark Galant's "Foreign Exchange As The Trader's
Alternative," which starts on page 19, will give you an introductory
course on trading the foreign exchange markets. But if you still feel uncomfortable
trading the currency markets, there's no reason for you not to trade the
markets you're more comfortable with. There are enough opportunities out
there to make money, and with different techniques, strategies, and good
money management, you can come out ahead, no matter what the overall picture
might be.
If you've been a loyal subscriber to S&C over the years, you'll
know there are plenty of strategies you can apply to the markets. You may
also have noticed that the annual Readers' Choice Awards ballot that has
accompanied the August issue in the past is nowhere to be found this time.
There's a good reason: This year we've moved the voting to a later date.
You'll be getting the details soon. So stay tuned!
Jayanthi Gopalakrishnan,
Editor
Originally published in the August 2002 issue of Technical Analysis
of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright
2002, Technical Analysis, Inc.
