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Today, we’re opening a new bearish trade on the PowerShares DB US Dollar Bullish ETF (NYSEARCA:UUP).
Despite Monday’s rally, the market still has a high level of uncertainty, which can be seen through the current CBOE Volatility Index (INDEXCBOE:VIX) levels. Underlying fundamentals look good, but stalling interest rate trends and a likely stock-consolidation should be negatives for the dollar in the short term.
We like the prospects for UUP to bounce lower from resistance this week. The ETF’s options have very low levels of implied volatility, so we aren’t paying very much time value for these contracts, which should have very attractive upside potential if UUP falls back to its prior lows.
‘Buy to open’ the UUP March 24 Put (UUP180316P00024000) for a maximum price of $0.55.
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