Sold the euro. Good trade. Still short.

091219fxeThough not into hype or chest beating (except when about to grab a jungle vine and swing with Jane) the euro trade deserves to be recalled.  We bought UUP which is a way to play it — more or less like taking a shower in a raincoat.  Had this been done in the FX markets ….

Stopping this market is like stopping a moving train.  Probably the best way for the general investor is dropping the stop to 2% over each new high as it is made.  If you were into real time then setting Basing Points on hourly bars with a 2% filter would be a fun thing to do.  If agile and staring at the screen you might even do a tighter stop than that.

Of theoretical and academic interest, note the clean out or flushing action — the bull trap at the top.  Pretty clever.

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