TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES. 

OPTIONS PLAY: THE CANADIAN DOLLAR IS ON THE MOVE

The Canadian Dollar has been in an a tremendous rally recently in my opinion, due to the recent fall of the USD Index as rhe "risk-off" trade seems to be back on.

MY ANALYSIS 

Fundamentally, the USD Dollar Index and the Canadian Dollar typically have an iverse relationship. Meaning they have a tendancy to move in the opposite direction of each other. Lately with the "risk-off" trade on, the Canadian Dollar has been moving higher and the USD Index has been moving lower. This has been the case, in my opinion due to the fact that sovereign debt issues in the Euro-Zone have been somewhat quite.

Technically, from my stand point, I see USD INDEX FUTURES in a SUPER TREND lower as the market trades below both the 9 day SIMPLE MOVING AVERAGE and the 20 day SIMPLE MOVING AVERAGE as the 9 has crossed under the 20 and both SMA's are pointing down on steep angles. See daily chart below.

Additional charts, studies, and commentary can be found at http://markethead.com/2.0/free_trial.asp?rid=McKinney

Technically, this daily chart below depicts the inverse relationship between both the USD Dollar Index Futures and the Canadian Dollar Futures. In my opinion, it is clear that they move in opposite directions based on this daily chart. See the USD Index Futures vs. the Canadian Dollar Futures daily chart below.

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Technically, I in my opinion, I see the Canadian Dollar Futures just starting to give what could be the start of an upward SUPER-TREND on this weekly chart. We have the 9 day SIMPLE MOVING AVERAGE just crossing over the 20 day SIMPLE MOVING AVERAGE. Before I get the buy signal I would wait for the 20 period SIMPLE MOVING AVERAGE (the green line) to start to point on an upward angle. The I would have a SUPER-TREND higher on the weekly chart as well as the daily. See weekly chart below.

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Technically, the inverse relationship between the USD Index Futures and the Canadian Dollar Futures are also depicted on this weekly chart as well. Notice that they, for the most part, move in the opposite direction of each other. See weekly chart below of the USD Index Futures vs. the Canadian Dollar Futures.

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OPTIONS PLAY

THE OPTION PLAYS HERE COULD POTENTIALLY BE BUYING CANADIAN DOLLAR FUTURES CALLS OR CALL SPREADS.

When buying calls or call spreads we also look to buy, in a 3 to 1 ratio, a put for protection in case the market makes a MAJOR move against us.

EMAIL ME FOR SPECIFICS ON STRIKES, MONTHS, PREMIUM, AND RISK.

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FREE QUOTE- "Only The Good The Die Young" -Billy Joel

Before you place any of these trades in your account you should call or email me with your phone number for a detailed explanation of the strategies and the risks involved at 312-277-0115 or  mmckinney@zaner.com. 

For past trade ideas go to: http://mmckinneyfutures.com/  

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A LITTLE.