The March Dollar Index is virtually unchanged this morning at 75.000 as we await this morning’s monthly employment reports for November.  The included chart shows that the longer term trend for the dollar is still down but over the past week, prices have not made any progress to the downside.  The directional movement indicators are bearish and the ADX line continues to edge lower.  The ADX line suggests that there is no real momentum in either direction at this time.  I recommend standing aside in the dollar to wait for corrections to attempt to get short the dollar.

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 1.5085 this morning as I write.  The included chart shows that the euro is still mounting a challenge on its recent contract highs in the 1.5135 area.  The overall pattern still shows that the Euro is still in a strong uptrend although currently struggling with its recent price highs.  The directional movement indicators are bullish but the ADX line is low and flat.  Just as in the case of the dollar index, I believe that this is not a good time to try to enter the euro because the risk is too high for the expected reward.  In the case of the Euro, we do have option positions on that could take advantage of further price moves. 

 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 in 1 day.

 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 92 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 23.5 ticks at 74.81 this morning as I write.  The included chart shows that the dollar is trading just off its contract lows that are located at 74.545.  The observed trend is down.  The directional movement indicators are bearish and the ADX line continues to slide lower suggesting that this is still a reluctant downtrend.  The risk reward to entering the dollar right now is bad.  The risk would be way too high, so I continue to recommend standing aside in the dollar.  It would be nice to get a sharp short covering rally and then some sort of topping pattern in which to get short in the dollar.  To get in right now on the short side of the dollar, would be just chasing a market that seemingly, the whole world is already in, at this time.

 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 5 ticks at 1.5083 this morning as I write.  The included chart shows that the euro continues to be in a longer term uptrend.  The directional movement indicators are bullish and the ADX line is drifting lower to sideways.  I would expect that the euro will eventually test its all time highs made last year in the 1.6000 area.  I recommend holding our current positions as is for now.

 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 in 2 days.

 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 93 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 3.5 points at 74.80 this morning as I write.  The included chart shows that the dollar is in a strong down trend and prices are near their contract lows that were made a week ago at 74.545.  So far, this trend down in the dollar is still orderly but one gets the sense that a capitulation break down is possible at any time.  If and when that ever happens is when the possibility of more interbank intervention may occur.  Otherwise, as long as the dollar falls at a slow rate, other countries seem to be willing to tolerate that trend.  As long as that orderly downtrend in the dollar continues, then commodities priced in dollars, should continue to rise in price.  The directional movement indicators are bearish and the ADX line is going sideways.  For now, I am flat in the dollar index.

 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 81 ticks at 1.5065 this morning as I write.  The included chart shows that the Euro is trying to challenge its contract highs made a week ago in the 1.5135 area.  The directional movement indicators are bullish but the ADX line is edging lower.  There is some Bollinger band resistance in the area of the contract highs.  I would expect the Euro to struggle trying to get past the contact highs in the near term.  I recommend holding current positions as is.

 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 in 3 days.

 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 94 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 36 ticks at 74.925 this morning as I write.  The included chart shows that the dollar index continues in its long term downtrend.  The contract lows made a week ago was at 74.545.  The directional movement indicators are bearish but the ADX line continues to edge lower.  There is some good Bollinger band support near the contract lows.  That along with the non-trend confirming ADX suggests that we should continue to stand aside in the dollar for now.

 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 188 ticks from Wednesday’s close at 1.4940 this morning as I write.  The huge spike down is a result of yesterday’s announcement by Dubai that they want to delay making payments on about $60 billion owed to 70 international banks.  This sudden announcement has given rise to a lot of panic trading as investors fear the repercussions at the banks that are involved.  I see that most, if not all of the individual banks involved have less than $2 billion in exposure to Dubai.  That seems a trivial amount considering what those same banks have written off and gone through over the past year.  But on a day when volume is always light, prices can swing all over the place.  My experience is to take advantage and liquidate the positions that are making any wind fall profits but refrain from putting on too many new positions until the smoke clears from this news.  We don’t know what other news, if any, is lurching behind the door.

 On Wednesday, we were successful in buying one March Euro (1.5750 strike) call option at 134 ticks or $1675 gross, and selling 2 March Euro (1.6100 strike) calls at 75 ticks each or $937.50 each.  The overall total gross credit received to do this trade was $200.  So, if in 98 days when these options expire, if the March Euro never makes it to 1.5750 then the options will expire worthless and we will keep the $200 they paid us up front.  The maximum gain would be if, at expiration, the March Euro closes at 1.6100, then the gross gain could be as much as $4375.  The risk on this trade as is the case on any ratio call spread is if the March Euro, in this case, rallies to a through the 1.6100 area too soon.  In that case the risk could be unlimited unless we liquidate the position.  My strategy would be to liquidate the trade if the euro traded up to the area of 1.6100 too soon without a lot of time value lost.  The best way for us to profit on this trade is if the euro trends up toward 1.6100 over the next 98 days.  So, this downward price action today does not hurt this trade at all and just uses up time value which will help this position in the long run.

 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 in 7 days.

 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 98 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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As a result of the Dubai news yesterday, today the March Dollar Index is up 94.5 ticks from Wednesday’s close at 75.605 as I write.  The included chart shows that during electronic trade yesterday, the dollar rallied sharply on the news the Dubai wants to delay payments on more than $60 billion owed to 70 international banks over the next six months.  So markets are nervous in the low volume holiday trade both here and in the Middle East where they are celebrating some religious holidays.

So, what does the chart say?  So far, the chart shows that the overall trend of the dollar is still down.  This overnight price spike in the dollar is already selling off. No significant previous highs were taken out.   I recommend standing aside in the dollar index until the smoke clears.  Light volume days are great for taking profits on crazy market swings but may not be good days to enter anything new.  We have no idea on how this Dubai news will evolve or if the $60 billion figure is accurate either.

 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 94 ticks at 1.5059 this morning as I write.  The included chart shows that the euro is attempting to break out to the upside in price.  The directional movement indicators are turning more bullish and the ADX line is flattening from a declining trend.  The euro needs to close at new contract highs and then follow through to the upside in the coming days for the bulls to be happy.  We shall see.  With the Thanksgiving holiday upon us, expect the volume to be fairly light between now and this weekend.  The Friday following Thanksgiving is historically the lowest volume day of the year.

I wouldn’t be surprised to eventually see the Euro rally to its all time highs at 1.6000 made last year.

For today, I recommend buying one March Euro (1.5750 strike) call option and sell 2 March Euro (1.6100 strike) call options at a credit of 15 ticks or $187.50 gross.  March Euro options expire in 100 days.  In this trade, if filled; if prices never reach 1.5750 by the expiration date, then these options will expire worthless and we will keep the $187.50 gross.  The maximum gain would be if prices finish right at the upper strike price of 1.6100 at expiration, which would result in a gain of about $4375 gross.  The risk on this trade would be if the Euro spikes up to and through the upper strike price of 1.6100 too soon without much time value eroded.  The euro would have to go to new all time highs to hit our upper strike price.  We would need to exit the trade possibly with a loss, if prices spiked to the upper strike price too soon.

 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 in 9 days.

 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.  March Euro options expire in 100 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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