Why the World Hates the Aussie

Women in Bikinis

Discretion certainly can be the better part of valor. That was the feeling that came over me last weekend when I saw the Australian dollar (FXA) plunge to a new three year low against the buck. I had been mulling over buying the Aussie around the $88 support level for the past couple of months. After all, with a synchronized global recovery in progress, and an international … [Read more...]

Lessons from the Australian dollar

Kangaroo - Car

Last month, I shot out a Trade Alert to buy the Currency Shares Australian Dollar Trust (FXA) December, 2013 $89-$91 bull call spread that turned immediately profitable. A mere four trading days later I sold out, after the (FXA) rallied an impressive $1.2, adding 0.84% to the value of my model trading portfolio. That turned out to be the absolute top of the move. This is not … [Read more...]

Ringing the Register with the Aussie


This is our 13th consecutive closing profitable position, and 19th consecutive profitable Trade Alert when you include our remaining open positions. I have only seven more winners to go before I break my old record of 25. Since I strapped on this trade last week, the (FXA) has popped a full 1 ¼ points to the upside. It’s tough to say where these options are really trading, … [Read more...]

Loading Up on Australia

Map Australien Energie

It looks like I’m Waltzing Matilda again. I am going to use the two-cent drop last night to scale into a long position in the Australian dollar. This is a dip in the (FXA) that gives up one quarter of the four-cent move off of the August 88 cent bottom. The decline was triggered by dismal employment data showing that 10,200 jobs were lost in August. Many analysts had been … [Read more...]

My Tactical View of the Market


The easy money has been made on the short side this year for a whole range of asset classes. While we will probably see lower lows from here, the risk/reward ratio for taking short positions in (SPX), (IWM), (FXE), (FXY), (GLD), (SLV), (USO), and (CU) are less favorable than they were two months ago. Of course, the ultimate arbiter will be the news play and the economic data … [Read more...]

Cross Asset Class Analysis Warned “RISK OFF” Was Coming


Last week saw a dramatic deterioration in the economic data that has been the foundation of the Great Bull Market of 2012. First, we read minutes from a Federal Reserve meeting suggesting that QE3 has been put on a back burner. Then the Department of Labor’s Friday nonfarm payroll report poured gasoline on the fire, coming in at 120,000, versus an expected 210,000. Until … [Read more...]