USD; Over Bearish to Over Bullish & I Cover the World

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  • Post category:Currencies

Over the last year the public has gone from hating the USD to becoming very warm to it. From Sentimentrader here is the Public Opinion reading once again. It had spiked to over bullish although not as extreme as it could be, and since recoiled. Sentiment has long since ceased being USD’s ally. I wonder if the ongoing Trade War theater is putting Uncle Buck out of whack and eventually off sides.

Commercial Hedgers appear to still have some room to increase net shorts before an overtly dangerous situation develops for USD. But again, it’s not favorable from a contrary perspective.

From comes this view of the Commitments of various entities. Generally, at a turning point the green and blue lines are the ones that would prove to be dumber money. The red ones will be right at turning points.

This did not hurt the case for taking a profit on my only short position, which was against the World (ex-US) iShares ACWX. I did it more because though bear trending, it can take another up swing within that. That’s the impression I got from the daily chart, anyway. As we’ve been noting each week in NFTRH, the World has been very anti-USD lately. There is a divergence here with the World declining (vs. US) and inverse USD going sideways (as nominal USD does the same). I am not sure who’s diverging who, but taking a profit seemed like the thing to do until things are clearer.

As a side note and as mentioned in NFTRH 516, if silver’s ridiculous CoT manifests in its out performance to gold and USD fades, the 2 Horsemen will have ridden to a macro change, but probably not the kind bears would hope for. We got into this in a massive Market Internals & Indicators segment with long-term Interest rates being right there in the mix as well. Typical of me, too much to say and well beyond a simple public post. So I’ll clip it here but note that you probably should have open minds out there in blog reader land.

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