The March Euro is up 56 ticks at 1.4733 this morning as I write.  The included chart shows that the March Euro appears to be breaking down into a much needed correction of the long uptrend that has been in place for several months.  Over the past couple of days, the March Euro has closed below the 40 day exponential moving average and the rising uptrend line coming up since June.  These are two things that haven’t happened in the Euro for several months.  This to me suggests a near term change in direction.  The directional movement indicators are bearish and the ADX line is beginning to rise!  Yesterday, we sold short one March Euro futures contract at 1.4769 and also sold one March Euro (1.5100 strike) put option for 535 ticks.  This gives our short futures position protection all the way back up to near the contract highs.  If, at expiration on March 5^th, the Euro closes below 1.5100, then the option will be exercised and our futures gross loss will be $4137.50 but we will also keep the premium of 535 ticks or $6687.50 gross.  The overall result would be a $2550.00 gross gain.  If the euro corrects sharply in the near term and then begins to finds support, then I would be looking to take a smaller profit early.

 Followers should also be long one March Euro (1.3850 strike) put from 121 ticks and short 2 March Euro (1.3400 strike) put options from 67 ticks each for an overall credit of 13 ticks or $162.50 gross.

You should also be long one March Euro (1.5750 strike) call option at 134 ticks and short 2 March Euro (1.6100 strike) calls at 75 ticks each or $937.50 each. 

You should also be short one March Euro futures contract form 1.4769, and short one March Euro (1.5100 strike) put at 535 ticks, or $6687.50.

 March Euro options expire in 87 days.

 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.