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Trade of the Day: PowerShares DB US Dollar Bullish ETF (UUP)

John Jagerson and Wade Hansen

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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.

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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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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

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