Will The Dollar Index Rally? Tracking a Leveraged ETF for the Euro

by The Smarter Wallet on July 23, 2010

It’s time for an update on the investment markets. I’ve got a set of new INO.com investment videos that may be of interest to market traders. Before we get to introducing these videos, I’d like to mention that the trading tool used to analyze recent market events is the INO tool called MarketClub. I’ve previously reviewed the MarketClub trading system here, but you can certainly see it in action in the videos below.

To try out this trading system, you can sign up for a free 2 week trial through this link. For other INO services, you can also sign up for a free trend analysis subscription and get access to free trading videos here.

Will The Dollar Index Rally? Tracking a Leveraged ETF for the Euro

Here are some short videos for your viewing pleasure:

Video 1: Is the Dollar Index (USDX) about to rally? The USDX is a measure of the dollar’s value against a basket of other currencies.

It is a weighted geometric mean of the dollar’s value compared with the following currencies:

  • Swiss Franc (CHF) 3.6% weight
  • Swedish Krona (SEK), 4.2% weight
  • Canadian Dollar (CAD), 9.1% weight
  • Pound Sterling (GBP), 11.9% weight
  • Japanese Yen (JPY), 13.6% weight
  • Euro (EUR), 57.6% weight

Using Fibonacci retracement methods, Adam Hewison (INO.com’s expert trader) shows us that this index may recover. While there are some mixed signals in technical analysis indicators that show a shakiness in the USDX, the expectation here is that it will go back up.

Video 2: A look at the Proshares UltraShort Euro (EUO). This is a leveraged ETF that lets you go short the Euro and long the US Dollar when you take a position in it. As a leveraged ETF, it gives you twice the leverage and movement made by its benchmark. If you suspect that the Euro will be declining further, then this is an investment you can look into. More about the weak Euro here.

Video 3: Is the Euro on shaky ground? Recently the Euro has experienced a rally. This summer, we are seeing a rise in the Euro, which you can view via the EURUSD chart. Again, using Fibonacci retracement methods, the signals show that the Euro vs Dollar relationship is headed towards a one to one parity.

Video 4: Technical trend indicators turning negative for the Euro. INO.com’s trading signals (called Trading Triangles) are flashing red for the Euro. We’re looking for a one to one ratio between the Euro and the US Dollar. This may be an opportunity to go short on the EURUSD.

Video 5: Death cross pattern in the S & P 500 chart. An interesting pattern emerges when you review the S & P 500 Daily Candlestick chart. When the 50 day moving average (DMA) is plotted against the 200 day moving average, a death cross pattern becomes evident. The 50 DMA fell below the 200 DMA in early July and this sort of thing could signify another downtrend for the market.

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{ 2 comments… read them below or add one }

1 Tina Calderone December 21, 2010 at 10:38 pm

I have recently retired…it has been almost 2 years. I am thoroughly confused about what to do. I have some money with Black Rock through a Financial Planner. I have rolled over my 401k to an IRA with Fidelity.

I recently received a sum of money and not sure where to put it so that I can make money but still be cautious. Everyone tells me something else.

Index Fund, Annuity, ETF which I think is risky. Please Help!
Tina Calderone

2 The Smarter Wallet December 22, 2010 at 10:07 pm

I would start with a highly diversified index fund.

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