Saturday, December 5, 2009

How come so much volume in UUP (Dollar Bullish?)

This is just a quick thought about UUP (Proshare Bullish US Dollars

Last week, I started to create a position in UUP , as I thought that the Dollar was really undervalued compared to other major currencies (certainly such as the Euro)... Even I admit, the media & wise analysts are just telling everybody that they see no bottom or no support for the dollars... the main reason being "no sight of interest rate increase by the FED"...

But, this is what I did & what I'll try to look in the future...

I recommend to have a serious look at the UUP chart.

What does it tell?
Dollar is in a downtrend.. Good... 


But... What about every upticks in this downtrend?... 
They are supported by "heavy volume"...just look at the chart...


Why..
Don't ask me embarrassing questions.


So, what to do?


I'd build a position in UUP.. & the more I see "volume in upticks", the more I'd be inclined to add on this position...


Of course, I see 1,5$/1Euro as a temporary support...If not, then 1,6 could historically be...


Also, what's the correlation Dollars/Gold? 
Gold had quite a run.. and is temporarily overbought... So, I could really see a test of the 1000 support.. what do you think?... and at the meantime, the US$ becoming stronger...
UUP @ 22,5 is approximately the 50DMA.. Now, what next?... the market will tell pretty soon.. & we better follow if we want to position ourselves for the move...



Just my usual humble thoughts off course... let me know yours...

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