Sold DXM8 for a loss of $615.00

I sold the Dollar Index position Friday at 72.79 due to the unemployment surprise and the comments by ECB President Jean- Claude Trichet saying he was going to raise rates next month. The market tanked and my reasons for going long were promptly proven wrong by the price action.

I originally went long because I assumed that the ECB would worry about slowing growth in EU, especially in the PIGS countries, than slightly higher inflation. All the US numbers had been coming in above expectations and I presumed that the FED would be the one worrying about inflation instead of economic growth. These two mentioned scenarios were to lead to a narrowing in the interest rate differentials between the EU and US. Sentiment was also shifting from extremely dollar bearish to neutral in the media.

I also thought that the 7 year drop in the Dollar Index was getting long in the tooth. Lots of new foreign currency ETFs have come out for the retail investor to hedge there dollars. When the retail investor is finally catching wind something is awry it usually means the trend has fully run its course for the time being. I also assumed all the reasons to hate the dollar were out in the open and the market had discounted all the negative information possible.

Trade synopsis: Bought DXM8 73.405, Sold DXM8 72.290, for a loss of $615.00