The March Dollar Index is down 37.5 ticks at 77.895 this morning as I write.  The included chart shows that the March Dollar is beginning to struggle within its current rally.  So, is this the end of the dollar correction before the next bear leg begins or is this just light volume trading ahead of the New Year’s holiday.  The directional movement indicators are still bullish but narrowing rapidly and the ADX line is beginning to slope back downward.  This is not a good sign for the would be bulls in the near term.  I think that it is time to tighten up our trade now.  Today, I recommend raising our protective stop on our long March Dollar Index futures contract from 77.15 up to 77.65 which is just below the lows for this week.  I also recommend raising our price to buy back the short March Dollar 79.00 call from 80 ticks up to 90 ticks.  As the day goes on today, I may change some of these prices, so stay tuned.  I am looking for the sidelines today!!

 Followers of this letter should be long one March Dollar Index futures contract from 76.585, and be using a protective stop at 77.65 GTC. 

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

There are 64 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.