By Lawrence G. McMillan
The U.S. Dollar has been getting a lot of press lately as it has nearly gone parabolic with a huge rally on top of an already long-term rally. Optimism is rampant, and bears are cowed. This is likely a good time to lay out a plan for a trade on the short side. The feature article discusses this phenomenon, and shows how one’s attitude about hard assets might have a different viewpoint, depending on your currency.
Our market opinion is on page 6. When $SPX broke down earlier this week, that was bearish, but now some oversold buy signals are already starting to appear.
On page 7, there is a conditional trade in Boeing (BA) as well as a conditional VXX/SPY put hedge. Also, the article that begins on page 12 and is continued on page 7 discusses why we want to use VXX puts instead of $VIX puts in this strategy.
We continue our strategy of event-driven straddle buying with a recommendation in WSM, on page 9.■
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