Monday Monetary Movement – Are We There Yet – Dollar 100 Edition
Go Dollar, go!
As you can see on the chart, we had a blow-off spike down to 96 on Election Eve but, since then – it's been a rocket to 100 for the Dollar which is now up 5% since early October and really 3% of it came in November, after our first pullback from 99.
Goldman Sachs has finally caught up to our long Dollar (/DX) premise and we're still sitting on 4 longs at 95 on the Dec 31st contracts (DXX6) with a goal of hitting 100 (but we'll take 99.50 for $4,500 per contact gains for the holidays). We're expecting a bit of a repeat of last October's action and, until then, we'll just need to be patient. As I was saying to our Members yesterday, we don't know WHEN enough people will realize we're right to move the Dollar higher but we do know it won't take much of a catalyst to get it going – a Fed hike next week would be a good start.
If you are futures challenged, the Dollar ETF (UUP) is a nice way to play, now $24.64 and you can buy the Jan $24 calls for 0.85 and sell the $25 calls for 0.35 for net 0.50 on the $1 spread which is already 0.64 in the money so, if UUP stays flat through January expirations, you make 28% but the potential is 100% gain if up moves up just 2% to $25 – that's nice leverage!
So that's at 99.50 for gains of $4,500 per contact in less than two months and those…