"A stitch in time saves nine." That English proverb basically means that preparing for something today can save you from much more potential trouble later. Preparing for the serious probability of higher interest rates, a rising GDP and maybe a nicely higher stock market makes trading sense. The U.S. dollar will most likely benefit from that trio of positive economic measures. The euro will not be so fortunate.

The CurrencyShares Euro Trust ( ( FXE); $135.63 at the close Friday) has now rallied nine consecutive days, from $128+ to almost $136 today. This rally began just as the cheerleading for the former rally in the dollar (from mid-December to early January) was reaching a crescendo on CNBC's various financial programs. One can only assume the same is forthcoming for this rally in the euro.

Anything that rallies for nine consecutive days should have a short interest total that is both exhausted and small, so FXE is now likely overbought and lacking in short interest. A vacuum to the downside comes to mind, in which the volatility begins to pick up as the sellers re-emerge.

You might peruse my previous FXE spread trade (" A Speculative Play on Euro Options") for additional commentary on FXE. That successful spread, while set up for a March expiry, was closed out in about a month. I have since watched FXE in shock and awe ... until now, when I think the timing for another put spread is in order.

Consider a put spread in FXE, expiring in February, designed to profit from a downward move in the FXE ETF.

Trades: Buy to open 5 FXE February 136 puts for $2.10 and sell to open 5 FXE February 131 puts at $0.50, for a total debit of $1.60 per spread.

The total risk of the spread is the debit of $800. As always, I will monitor this trade in the comments section on this site.

At the time of publication, Raschke had no positions in the securities mentioned.

Skip is a former registered options trader and member of the Philadelphia Stock Exchange. He was an equity options analyst and broker with Paine Webber and a proprietary trader for Van Der Moolen. He served in the USMC, as well as played minor league baseball with the N.Y. Yankees organization. He is an independent stock and options market consultant.

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