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For: Tuesday 03-30-2010

Does The Buck Stop Here?

The nearby June US dollar index looks to have finished a simple three-day bull flag pattern. This last break supported in the middle of the recent congestion area from late February. This is the obvious support for this market but a close back below 8100 would make this appear to be a simple double top pattern.

Looking at the recent “merged” market profile chart, we see Tuesday’s range remains locked between support and resistance we will look to buy put spreads on weakness and a close though support.

Aggressive traders may opt to use futures. As always please consult your personal broker at Great Pacific Trading Company to see if this trade is suitable for your account.

Trade Recommendation: On a close back below 8060 versus the June futures in the next week, Buy the June 79-77 put spread and sell the June 85 call for a debit of 15 points on a limit. Risk 70 points on the trade initially. (>$700 not including commissions and fees), Look to take profits if the market trades to the 7860 area.