The market gives second chances. Successful investors know this.
As Rodney pointed out above, the fundamental problems facing Europe have not materially changed since last summer. This has made the euro/U.S. dollar exchange rate volatile. For those who added UUP to their portfolios in October, this volatility hasn’t been too bad. We’re still positive, partially because we didn’t follow the herd and we didn’t buy at the top of a rally.
In September, the dollar made a strong upward breakout from a bottom formation. We waited patiently until October, when the dollar took a breath and pulled back. Fibonacci retracements gave us a means of measuring the pullback and finding a favorable entry price (blue circle in the chart below).
After another strong rally in November/December, the dollar is pulling back again. This gives us the same opportunity we had last October… and a 2nd chance to buy the U.S. dollar at an attractive price (red circle).
U.S. Dollar (UUP) Enters “Sweet Spot”
Buy Zone a 2nd Time
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