NOW WHAT? - I've talked a lot about the way things trade into end of year and the tendency for markets to trade in the direction of the trend. And one again, this is what we've been seeing as 2016 winds down, with the US Dollar extending or looking to extend its run against many currencies. But what I haven't talked a lot about this year is taking advantage of such runs in the final hours of the year. The point here is that while it is normal to see trends push in the light end of year trade, it's also normal to see sharp reversals once the market returns to fuller trade in the New Year.
THE TRADE - So with that said, this also sets up the opportunity to positions for reversals in these final sessions of 2016. Of course, it's a big IF, but IF we see the Euro or Pound drop dramatically today or tomorrow, I will happily look to fade these moves and play either the Euro or Pound to the long side as I look for the market to fill that move when fuller trade resumes next week. Again, it's important to remember that we first need to see that major drop in EURUSD or GBPUSD or another currency against the Buck before getting involved. But I am on alert and will be looking for such a position between now and the yearly close on Friday. Stand by.