March 14, 2015

US Dollar Update

I've been bullish on the US dollar for sometime now and have been holding the dollar ETF UUP. Fundamentally with the rest of the world debasing their currency and cutting rates its not surprising to see the tremendous run we have seen in USD. I don't know how much longer this will keep up though. How are we in the US going to raise rates when the rest of the globe is cutting? The other thing is the technical side. Looking at the dollar index it has skyrocketed and is going vertical now. This can't keep up forever. I'm happy to trim off 3/4's of my UUP position into this strength on Monday. Selling 3/4's of the position will lock in the bulk of the 10% gains it gave me. I'll have a stop loss on the remaining shares.
It's very interesting to see the continued pressure the dollar strength has put on commodities, especially oil. Oil looks poised to test the lows of the winter.

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