The March Dollar Index is down 27 ticks at 77.96 this morning as I write.  The included chart shows that the dollar is now having its first pull back from the sharp rally over the past month.  So, does the dollar have another rally leg coming or is this all there is for the dollar correction inside the secular bear market?  The directional movement indicators are bullish and the ADX line is still edging higher.  Until proven otherwise, I would have to say that this is a pullback inside of an intermediate term rally in the dollar, meaning that there is probably another rally leg to come.  Notice that the green 200 day exponential moving average is beginning to show up on the chart, today at 79.933.  I recommend holding our protective stop right where it is for now.

 Followers of this letter should be long one March Dollar Index futures contract from 76.585, and be using a protective stop at 77.15 GTC. 

You should also be short one March Dollar Index (79.00 strike) call option from 130 ticks or $1300 gross.

There are 71 days left until the March Dollar index options expire.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.