Tread lightly until the European Union panics

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Take this with a grain of salt, but from a trading perspective, it is time to adopt a somewhat defensive approach as long as Europe remains unsettled. As we pointed out yesterday , you should be taking some profits and trading lightly on your positions at this point. "Keep it nimble," in other words. I know that there is a place where you could see a strong comeback in emerging markets and EEM ( quote ) back on the rise: But I do not think we are quite at that point. The bottom line is that there is no way to know what will happen if Greece defaults or Italy or any other country follows. If that happens, we probably have a lot more to worry about and you probably want to be selling a lot in your portfolio -- half-kidding here, but it is important to have some perspective. In fact, Michael Hartnett, who runs Merrill Lynch's pan-European strategy team, says it best: when governments start panicking, markets start rallying. That is exactly what we need to see: the European Union in a panic to do something about the situation. Until they do, they are giving the markets a reason to move on their indecision, and that move will often be to the downside.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , International , Stocks

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