Reply #4: daily dollar watch [View All]

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 82.85 Change +0.82 (+1.00%)

Major Headlines - Previous Session

http://futures.fxstreet.com/Futures/content/100400/content.asp?menu=indices&dia=10122004

Stocks fought back Thursday afternoon, recovering from steeper morning declines, after National Semiconductor issued higher earnings and President Bush said tax hikes won't be necessary to reform Social Security. But positive earnings news in the early afternoon from fellow chipmaker National Semiconductor tempered the impact and the chip sector was able to trim its losses. The chip sector's direction tends to be tied in closely with that of the Nasdaq.

Also adding support: late morning comments from President Bush promising that his administration would not boost payroll taxes as part of the plan to overhaul Social Security.

National Semiconductor Corp., said yesterday that quarterly profit rose, helped by a one-time gain and a tax benefit, and it forecast a smaller-than-usual sales decline in the current quarter. Excluding specials the company earned 18 cents a share. For the current fiscal third quarter ending in February, the company expects revenue to be flat or down 1-2% from the second quarter, with a similar gross profit margin. That is better than the company's average drop of around 4 percent in the period. Analysts on average had been expecting earnings of 15 cents a share For the current quarter, analysts were expecting revenue of $449.3 million and earnings of 15 cents. National Semiconductor shares rose 4.12%, reversing losses from earlier in the day

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DOLLAR INDEX OPTIONS STRATEGY

http://futures.fxstreet.com/Futures/content/101170/content.asp?menu=currencies

The correction in the Dollar index that I have been calling for has finally come, and as expected we have seen a nasty shake out in the currencies and the metals on a minor move in the dollar. This correction may be a quick one as the more violent a correction is the less it needs to be prolonged. In fact if you look at historical charts of any market you can see in most cases where there was a sharp correction the markets more often than not reverse and resume the previous trend with almost as much speed as the correction. This can be attributed to the fact that once the weak hands are "washed out" the "strong hands" want to get the market back to making new highs as soon as possible before too many weak hands regain the confidence to jump back in. Then once the market makes new highs again, the weak hands feel they have missed the move and begin to chase the market higher. Once they are all in and their buying subsides the market corrects again and the cycle starts over. Any experienced traders have surely seen this at least a few times in their own trading. This trade uses a short term call option to try to profit from this "dead cat bounce" and longer term puts to profit from the continuation of the trend of a weakening Dollar. But since we are long both calls and puts we really don't care which way it goes as long as it goes one way or another.



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Great 'toon of the Dumsfeld!

Have a Great Day Marketeers!