(This is an excerpt from an article I originally published on Seeking Alpha on February 25, 2013. Click here to read the entire piece.)
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Last month, Spain’s unemployment rate reached Depression-like levels when it hit a record 26% and projections are for it to increase to 27% this year. {snip} EWP is up an astounding 44% off 2012 lows and was up as much as 65% when it slammed into resistance at 2012’s peak. This strong relief rally looks like it has topped out for now.
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Source for charts: FreeStockCharts.com
{snip} Given the typical response to extremes of high unemployment has been to ease monetary AND fiscal conditions, I strongly suspect things will indeed get much worse for Spain before they get better (economists can argue endlessly as to whether this is ultimately better for the long-run). Forecasts for 2014 should get slashed sooner than later.
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on February 25, 2013. Click here to read the entire piece.)
Full disclosure: long EWP puts