Today's Video Update: The Banks in Cyprus Reopen Tomorrow, Now That's a Scary Thought

Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Wednesday, the 27th of March.

The Banks in Cyprus Reopen Tomorrow … Now That's a Scary Thought
No matter how the banks reopen tomorrow, it's not going to be pretty. We are expecting to see chaos, fighting, arrests and the media, broadcasting to the world how crowds react when they lose most, if not all, of their money. If you haven't yet read "Extraordinary Popular Delusions and the Madness of Crowds," I highly recommend it. It is a history of popular folly by Scottish journalist, Charles Mackay, first published in 1841.

Messing with peoples' hard earned savings and attacking people who are wealthy will definitely make them move their money out of the country. The question is, where does this money go to? Asia? Under the mattress? Into gold? Or come here to the States to buy solid US companies? At the moment no one knows for sure, but we do know there could be some amazing trading opportunities.

We discussed how important perception and confidence is for the markets. Unfortunately for Europe, there is no President Roosevelt to make assurances like he did in the 30s. Mario Draghi was perhaps the one person who seemed to make sense, but now that he has slipped out of the picture, everybody else seems to be bit players in this ongoing Greek tragedy. Once Europe sees what is happening, I suspect they will all begin to lose confidence in the banks and their leaders. When we see that happen, we will see accelerated downward pressure on the European banks. It would appear to this observer that the politicians may have finally run out of road to kick the can down.

The Euro Falls Below 1.28
We discussed the trouble the Euro is in and today it fell below the psychological 1.28 level. We are expecting the other shoe to drop tomorrow, with the potential run on the banks in Cyprus. We would not rule out the possibility of further weakness in this market, as the contagion from Cyprus stretches out and infects the rest of Europe. The fall out could be far greater than anyone is anticipating. Yes, I understand it's a small country and yes, I understand it is only .5% of the EU, but what is bigger than all of this is the psychological impact this tiny island country could potentially have on the world markets. It is my view that this is serious and should not be ignored.

Click Here to view today's video

Oil on the Move And 3 Stocks to Watch in the Oil Patch
We received a buy signal two days ago in the crude oil market with our Trade Triangle technology. For those of you who don't like to trade in the futures market, I wanted to bring three stocks to your attention today that are acting very well. All 3 stocks are in the oil patch and all three have our 3 Trade Triangles in strong upward trends.

OCEANEERING INTERNATIONAL INC (OII) Oceaneering is a global oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deep water applications.

FMC TECHNOLOGIES INC (FTI) FMC Technologies, Inc. is a leading global provider of technology solutions for the energy industry. Named by FORTUNE® Magazine as the World's Most Admired Oil and Gas Equipment, Service Company in 2012, the Company has approximately 18,400 employees and operates 30 production facilities in 16 countries.

GULFPORT ENERGY CORP (GPOR) Gulfport Energy Corp is a value-driven, growth oriented oil and gas exploration and production company. Operating areas include targeted exploration and exploitation in areas with known major oil resources such as Southern Louisiana and the Permian Basin. In addition, Gulfport has also acquired acreage positions in the Niobrara Formation of Western Colorado and the Utica Shale of Eastern Ohio.

Potential Chaos Ahead
March 28th - Cyprus banks reopen
May 19th - Debt Ceiling Suspension Expires

Have a great trading day,

Adam Hewison
Co-Creator, MarketClub

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Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.

7 thoughts on “Today's Video Update: The Banks in Cyprus Reopen Tomorrow, Now That's a Scary Thought

  1. From what I experienced in the mortgage banking business over the past 6 years. All it takes is just one little thing to start the snow ball rolling down hill. In 2006 it was one mortgage bank out west that had a extremely high rate of defaults that were caused by sub-prime loans and the next thing you know the value in all the cdo's, suv's etc went down hill and started the snow ball rolling. the rest is history or is it still history in the making?

    1. Nothing, as long my savings are below 100,000 Euros. If you own more on a single bank, then check how strong the bank is, and if needed, distribute the savings on other banks, depending on the sort of assets.

      1. OK, let's see if everybody else in southern Europe agrees with you.

        But assuming the small depositors do, what about those with more than 100,000 euros? A run on the bank from the big depositors would surely have profound effects . . .

        1. It would have a dramatic effect, but they would not run to the bank like the small depositors. Their problem is more delicate. They have different ways.

  2. It might have an impact on the Euro as stated by you, agree. A kind of loss of confidence.

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