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Based on its strong natural resources, Argentina should, in theory, be a gold mine for investors. With arguably the third-largest shale gas reserves in the world, the Argentinean economy is only one close step behind Brazil for the top spot in South America.

So why did today an analyst quote in a NASDAQ article that on a one to 10 rating for investors, 10 being the riskiest, he would give Argentina a nine? This statement addresses one of the biggest problems with investing in an emerging market: its governance.

Argentinean president Cristina Fernandez has enacted policies that have made foreign investing in this country an uncomfortably volatile thing. Dissonance amongst varying economic growth predictions has raised suspicion of a government that could very well be laced with corruption and in potential need of reform.

In fact, it could also be possible that the Argentinean government is evading Western investment altogether, seen in their nationalization of YPF (Treasury Petroleum Fields). This move sent the only Argentina ETF down over 20 percent since mid-April (NASDAQ) and demonstrated government hostility to the free market principals.

MSCI, an investment tool and index firm, is considering the removal of Argentina from its Frontier Markets index due to the government’s aversions. What’s further unsettling is that due to their richness in mineral resources, the country hosts a few popular stocks, such as Pan American Silver and Yamana Gold. With their removal from this MSCI index, further pressure could be placed on these stocks, as well as their ETF.

Their tempting potential continues to make emerging markets alluring to investors. Its unfortunate that this potential is often overshadowed by less than stable governance, making increasing the chance of risk for investors over that of return. Do these factors make investing in emerging markets more speculation than investment?

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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I bet right about now Jamie Dimon at JP Morgan is quite pleased to have the Facebook fiasco all over the news to take some of the spotlight off his little derivatives problem. As I write this (Tuesday morning), JPM is up 5% and FB is down nearly the same amount on the day. Personally, I think there’s way too much being made of the whole Facebook IPO story – though I do think the NASDAQ system problems is an interesting story, especially after the BATS failed IPO a little while back – but admittedly the rest of the news has gotten rather stagnant. I actually begged CNBC via Twitter on Friday to talk about something, anything, but Facebook, but struggled to come up with a good alternate subject.

Naturally, there’s a blame game going on as to whose fault it is the stock has taken a dive. We can never really know how things would have turned out if the NASDAQ system had functioned properly, but that won’t prevent folks from trying to do so. Finding someone to blame, of course, is a favorite pastime these days. Traders certainly do it when they take losses. After all, it can’t be my fault I lost money on my position. It must be those evil banks, unethical brokers, or speculators gone wild (unless, of course, they are moving prices the direction I want).  Yes, I am a speculator. Obviously, I’m talking about the other speculators, though – especially the ones with computers faster than mine. Yeah, the high frequency guys. It’s all their fault! They’re preventing me from moving out of the 99% and in to the 1%. Something really needs to be done about them.

Thankfully, today we’ve returned to the on-going back and forth between European central bankers and political leaders over what to do about the mess. It’s kind of refreshing after the all-Facebook-all-the-time chatter. Everybody seems to want Greece to stay in the euro, but it looks like we won’t find out until the middle of June as to whether the Greek people share that view. You’ll notice the German rhetoric on the subject of austerity and whatnot has cooled considerably. Could that be because suddenly they aren’t doing all that great either and the weak euro that’s coming out of all this actually tends to help Germany more than most on the export side of things?

Then there’s the on-going question of whether the US can remain out of the fray and avoid too much in the way of economic damage from all the European issues. I’m moving to England in the fall to start work on a PhD, so you know I’m looking for the dollar to go on a fantastic run higher to make my greenbacks go farther. Unfortunately, the UK retained the pound rather than join the euro. The photo going around of David Cameron with arms raised celebrating Chelsea’s performance against Bayern Munich in the Champions League final on Saturday (at last an English team beat a German one in penalties!)  alongside a much less enthused Angela Merkel could just as easily represent the British feeling about having their own currency through all the mess.  I’m hoping the Bank of England decides to do more QE. That ought to sink the pound.

In the meantime, back to my charts.

Oh look! There’s a cup-and-handle setting up on the weekly USD Index chart. Maybe the markets will help me get cheaper pounds without the QE.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.

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Currensee Chief Market Analyst Shaun Downey has a new blog post over at Forex Magnates this week in which he compares the activity in the US stock market to the range of USD pairs in Forex.

…there is no escaping the overwhelming importance of the American stock market and its influence over the Dollars direction. It can sometimes feel like you are trading that and not the Dollar at all…

Last month, guest Forex blogger Tim Mazanec pondered a divergence between stock and Forex traders.

…US equities opened the week on a strong note … Currency traders are well versed though that EUR/USD has only partially kept pace as it continues to trade around the 1.50 level. This begs the question of whether or not we are starting to see a divergence between traders in the stock market and in the currency market?

Whichever way you think the market winds are blowing, it’s interesting to see both Tim and Shaun comparing data from Currensee’s social indicators with their technical and fundamental analysis.  As Shaun writes,

The Currensee social indicators of positioning also provide insight. Last months Unemployment number saw negative sentiment on the Dollar maintained, but this had changed dramatically by last weeks figure. Longs of Dollars against Yen and Canadian where in the 90’s%, which is particularly telling, when taking into the account the latter’s initial bearish move on a very positive Canadian jobs report. Positioning against the Euro and Pound was also positive for the Dollar.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.