The March Euro is up 37 ticks this morning at 1.4748 as I write.  The included chart shows that the Euro is still trading below its 5 and 40 day moving averages and below the uptrend line that was established back in June.  The only thing left for the Euro is to follow through to the downside on this correction.  So, after a couple of mediocre bounce days so far, I want to continue to hold our covered put write trade along with our other ratio put and call spreads.

 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 86 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.

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The March Dollar Index is down 19 ticks at 76.24 this morning as I write.  The included chart shows that the dollar still is holding the mini-breakout of the downtrend line and 40 day moving average from a few days ago.  The dollar is still holding above the 5 day moving average as well.  The only problem is that there hasn’t been any follow through yet.  The directional movement indicators are still bullish but the ADX line is still flat.  We are currently long one futures contract, and I want to continue to hold this current position without any short option and continue to use our stop order for protection.

 Followers of this letter should be long one March Dollar Index futures contract from 76.585, and be using a protective stop at 75.79 GTC. 

 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.

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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.

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The March Dollar Index is down 32 ticks at 76.31 this morning as I write.  The included chart shows that the March Dollar index is attempting to have a short covering rally.  The March Dollar Index has recently closed over the 40 day exponential moving average and the long down trend line that began back in May.  These new events along with the crossing of the directional movement indicators to the bull side prompted me to buy the March Dollar yesterday at 76.585.  For now, we are using a protective stop on this trade at 75.79 GTC, which is just under the last two days price lows.  I want to see immediate follow through to the upside over the next day or so, otherwise I will either liquidate this trade or write a call option to bring in some income.  The dollar gives the appearance that it is about to have a much needed short covering rally correction.  We shall wait and see.  Stay tuned.

 Followers of this letter should be long one March Dollar Index futures contract from 76.585, and be using a protective stop at 75.79 GTC.

 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.

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Our buy stop recommendation from this morning was filled.  We bought one March Dollar Index futures contract on our stop at 76.585.  I do not want to write a call option against that position yet.  Instead, I recommend putting in a sell stop GTC at 75.79, which is just below the lows of the past two days.  I feel that if the dollar is breaking out to the upside here, then the last two days of lows should hold.  I expect some immediate follow through. 

 By the way, if the dollar has a 5% correction from here, prices could rally to 80.00.  That would result in a $3400 gross gain for us if we decided to liquidate there.  Coincidentally, a move to 80.00 in the dollar would be close to the 200 day moving average that is sloping lower.  It is not marked on the included chart because of a lack of data, but that is where it would be.

 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.

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The March Euro is down 58 ticks at 1.4757 this morning as I write.  The included chart seems to tell the same story as the dollar index except exactly opposite.  The longer term trend of the euro is up but recently the euro has struggled and failed to follow through on any rallies to new contract highs.  Now, for the third day in a row, the euro has been in a sharp decline which has seen prices close below the rising 40 day exponential moving average for the first time in several months.  Uptrend lines since July have now been broken to the down side.  Near term, at least, it appears that there is a change occurring in the trend.  Right now, we already have a call ratio spread and a put ratio spread in our portfolio.  I want to put on a bearish trade, but I am going to do this one a little differently than what we are doing in the dollar index.  I recommend selling one March Euro at the market and then selling one March Euro (1.5100 strike) put option at around 537 points which is close to the current bid.  I am using a deep-in-the-money put to write.  That strike price is right near the contract highs.  So if prices come back and take out contract highs, then we would have to exit the trade, but this will give us a lot of protection until then in case that happens.  On the other hand, if prices go down the potential of this trade is at expiration, the March Euro is below 1.5100, we would be exercised and be force to be long a futures contract at 1.5100 which would immediately offset with our short around the current price of 1.4760 for a loss of 340 ticks.  We would also keep the 537 points of option premium, so the gross gain would be 197 ticks or $2462.50.

 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. 

 March Euro options expire in 88 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.

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The March Dollar Index is up 22.5 ticks at 76.34 this morning as I write.  The included chart shows that the longer term trend of the dollar is still down.  Near term the dollar is beginning to shows some signs of life as you can see that the dollar spiked to a new contract low, barely, on November 9^th, then rebounded and the fell to a slight new contract low again on November 25^th, the a small bounce and then another shot towards the lows again on December 1^st before rebounding to where prices are today.  Two days ago, the March Dollar Index closed above the brown 40 day exponential moving average for the first time in several months.  This combination of some mini-base building described above, and the ability to close above the 40 day average suggests that there is the potential for a good short covering rally in the dollar imminently.  Other oscillators that I look at and the MACD have turned upward as well.  Yesterday, following the day the 40 day average was breached, the dollar attempted to follow through but fell back by the close.  Today the dollar is rallying up inside of yesterday’s price range but still hasn’t been able to take out yesterday’s high and follow through.  If you draw a down trend line, down over the highs of the last few months, you will notice that that line has been broken over as of two days ago.  Fundamentally, longer term the dollar should go lower, but the near term technical’s suggest that a potential sharp short covering rally is a growing possibility.  Today, I recommend buying the March Dollar Index with a buy stop at 76.58, which is just over yesterday’s price high.  This means that if prices can’t take out yesterday’s highs, we won’t buy anything.  If we are filled on this order, I will probably write an at or in-the-money call option against the position.  Stay tuned.

 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.

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The March Dollar index is up 4 ticks at 76.33 this morning as I write.  The included chart shows that the dollar had a sharp reversal rally day on Friday following the better than expected employment report.  The longer term trend of the dollar is still down, but it appears that a near term correction may be underway.  Stay tuned over the next several days for a possible trade idea.  I need to see this bounce develop some more, for more clarity.

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.

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The March Euro is down 35 ticks at 1.4787 this morning following Friday’s sharp drop.  The included chart shows that the Euro has made an abrupt downside reversal as of Friday.  The chart also shows that the bottom side of the upward channel that the Euro has been following since July is coming under pressure.  Also note that the brown 40 day exponential moving average was broken on the close on Friday.  That is first time that that has happened since August.  So is this a major change in direction or just a short to intermediate term correction?  My other technical indicators are beginning to show signs of rolling over to the down side, so this week seems to be a critical near term week for the Euro.   We will hold on to our current trades for now.

On Friday, our December ratio call spread expired.  We originally put that spread on for a gross credit of 8 ticks or $100 which is now ours to keep as a profit.

 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. 

 March Euro options expire in 89 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.

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The March Euro is down 20 ticks at 1.5074 this morning as I write 15 minutes before the monthly employment report for November is released.  The included chart shows that the overall trend is upward, but prices seem to have stalled over the past week with a lack of momentum.  This market needs some news to be a catalyst for further movement.  The directional movement indicators are slightly bullish and the ADX line is meandering sideways confirming the current lack of momentum.

 Followers of this letter should also be long one December Euro (158.00 strike) call option from 32 ticks and short 2 December Euro (160.00 strike) call options from 20 ticks each for a combined credit of 8 ticks or $100 gross.  Option expiration is today!

 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. 

 March Euro options expire in 91 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.

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