PowerShares DB US Dollar Index Bullish Fund: Get Your Bottom Dollar

I recently noticed what I considered bottoming action in the DX futures index, but didn't want trade the futures contract on it. What to do? I bought the The PowerShares Deutsch Bank Long US Dollar Futures Index Bullish Fund (UUP).

UUP is a recently introduced and little known ETF. The index is comprised of long futures contracts. The ETF is designed specifically to replicate being long the US dollar against the Euro, the Yen, The British Pound, The Canadian Dollar, The Swedish Krona and the Swiss Franc.

Volume is not very big presently but adequate - 300,000 shares on 12/14. Volatility is minimal. A swing of 50 cents is rare ( so far ).

Higher than expected inflation numbers have heightened fears of less aggressive Fed rate cuts, spiked the dollar and put pressure on commodities that trade in the dollar. Take a look at Gold.

The substantial decline in the dollar from June to November has priced in the subprime debacle and our low rates compared to the rest of the world. Over time, as usual, the housing market will bottom (it may have already) and our economy will get stronger. And so will the dollar and the UUP index.

Disclosure: none