U.S. Dollar IndexUpdated Dollars, Gold, and Something Else...
Something inTERe
TING is unfolding and you heard it here first. It involves the dollar, gold, and... drum roll...
...the W r e c k i n g B a l l
I'll save that one for last. Like any good thesis, it will evolve as new data comes in.
For now let's look at some data.
We can see from the Commitment of Traders report that both Asset Managers and Leveraged Speculators are reducing longs and increasing shorts on the D X Y. Asset Managers, being the more conservative investors, are decidedly betting on further weakness while Leveraged Speculators are pretty much split even.
"U.S. DOLLAR INDEX - ICE FUTURES U.S."
-------------------------
Date: 2020-11-17
Open Interest: 29413
-------------------------
Asset Managers / Institutions
Long: 5255 -887 change
Short: 9148 332 change
Spreading: 931 -3 change
-------------------------
Leveraged Funds
Long: 9509 -763 change
Short: 8709 407 change
Spreading: 1401 -731 change
Looking at the charts we see this bearish momentum playing out, however, the technicals are a bit overextended and I am keeping an eye out for something like a dead cat bounce in the next few weeks, followed by a plummet into the abyss.
This same pattern would inversely reflect in nearly every market but let's just look at Gold for now.
If this plays out we can expect a sucker rally from the weekly 50 EMA, followed by an ugly move to test the next fibonacci level down. This is where I would start aggressively adding to my core positions.
As of Nov 19 2020, US Investor Sentiment, % Bull-Bear Spread is at 17.99%, compared to 30.96% last week and 15.90% last year. This is higher than the long term average of 7.29%.
This data signals that investors were much too bullish on the overall market are beginning to become more bearish.
THE WRECKING BALL REVEALED
Many are calling for the market bubble to pop but it just keeps trucking along. As we enjoy that sweet bubble bliss, that truck is driving off road into the Wild West and if you know anything about history, you know that the rest of the world is not so bubbly.
This theory is a purely speculative shot in the dark but...
1. If the dollar does plummet, you better believe that oil is going to ROCKET like Kim Jong-un's 36th birthday present
2. Saudis are trouble, or the U.S. is. It's hard to tell. Probably both.
The global economy is vulnerable to high oil prices which is part of the reason the U.S. wants to control Saudi Arabia. It could very well be part of the reason why U.S. oil producers "shoot themselves in the foot" *wink wink*, intentionally driving down prices by over producing. Fact is that inflation is basically a national security threat with the current debt levels and it's very unlikely the powers that be are not heavily involved in the oil sector.
Fun fact: 80% of Saudi Arabia's exports are oil. When economy's get squeezed, you can be sure a reaction will follow. Aggressive retaliatory action would certainly drive oil prices to the moon and with a plummeting dollar, this would be a perfect storm. The global economy would implode, the bubbles all pop, and we won't be able to finish watching Peaky Blinders on Netflix.
Keeping at least 1 eye on this.
Trading is risky. Don't do it and don't listen to me.
Long:
Crypto: BTC, ETH
Bullion: Gold, Silver
Equities: Commodities, International Dividend and Growth stocks
"All religion is a foolish answer to a foolish question." - Thomas Shelby
TING is unfolding and you heard it here first. It involves the dollar, gold, and... drum roll......the W r e c k i n g B a l l
I'll save that one for last. Like any good thesis, it will evolve as new data comes in.
For now let's look at some data.
We can see from the Commitment of Traders report that both Asset Managers and Leveraged Speculators are reducing longs and increasing shorts on the D X Y. Asset Managers, being the more conservative investors, are decidedly betting on further weakness while Leveraged Speculators are pretty much split even.
"U.S. DOLLAR INDEX - ICE FUTURES U.S."
-------------------------
Date: 2020-11-17
Open Interest: 29413
-------------------------
Asset Managers / Institutions
Long: 5255 -887 change
Short: 9148 332 change
Spreading: 931 -3 change
-------------------------
Leveraged Funds
Long: 9509 -763 change
Short: 8709 407 change
Spreading: 1401 -731 change
Looking at the charts we see this bearish momentum playing out, however, the technicals are a bit overextended and I am keeping an eye out for something like a dead cat bounce in the next few weeks, followed by a plummet into the abyss.
This same pattern would inversely reflect in nearly every market but let's just look at Gold for now.
If this plays out we can expect a sucker rally from the weekly 50 EMA, followed by an ugly move to test the next fibonacci level down. This is where I would start aggressively adding to my core positions.
As of Nov 19 2020, US Investor Sentiment, % Bull-Bear Spread is at 17.99%, compared to 30.96% last week and 15.90% last year. This is higher than the long term average of 7.29%.
This data signals that investors were much too bullish on the overall market are beginning to become more bearish.
THE WRECKING BALL REVEALED
Many are calling for the market bubble to pop but it just keeps trucking along. As we enjoy that sweet bubble bliss, that truck is driving off road into the Wild West and if you know anything about history, you know that the rest of the world is not so bubbly.
This theory is a purely speculative shot in the dark but...
1. If the dollar does plummet, you better believe that oil is going to ROCKET like Kim Jong-un's 36th birthday present
2. Saudis are trouble, or the U.S. is. It's hard to tell. Probably both.
The global economy is vulnerable to high oil prices which is part of the reason the U.S. wants to control Saudi Arabia. It could very well be part of the reason why U.S. oil producers "shoot themselves in the foot" *wink wink*, intentionally driving down prices by over producing. Fact is that inflation is basically a national security threat with the current debt levels and it's very unlikely the powers that be are not heavily involved in the oil sector.
Fun fact: 80% of Saudi Arabia's exports are oil. When economy's get squeezed, you can be sure a reaction will follow. Aggressive retaliatory action would certainly drive oil prices to the moon and with a plummeting dollar, this would be a perfect storm. The global economy would implode, the bubbles all pop, and we won't be able to finish watching Peaky Blinders on Netflix.
Keeping at least 1 eye on this.
Trading is risky. Don't do it and don't listen to me.
Long:
Crypto: BTC, ETH
Bullion: Gold, Silver
Equities: Commodities, International Dividend and Growth stocks
"All religion is a foolish answer to a foolish question." - Thomas Shelby
Note
Using the fib extension on Oil we can find the best entry and sell targets.1. First impulsive leg up (marked by high volume)
2. Measure first high to next low
Prices stalled out perfectly at the fib around 46.19
Now can wait for an opportunity to buy with the next fib target at 49.91
Note
Recent CoT report shows Hedge Funds increasing shorts dramatically last week which explains this recent push down. But everyone is starting to slowly scale into longs...Short covering rally likely to follow soon.
"U.S. DOLLAR INDEX - ICE FUTURES U.S."
-------------------------
Date: 2020-11-24
Open Interest: 31913
-------------------------
Asset Managers / Institutions
Long: 5390 135 change
Short: 9270 122 change
Spreading: 953 22 change
-------------------------
Leveraged Funds
Long: 9882 373 change
Short: 10521 1812 change
Spreading: 1661 260 change
-------------------------
Note
The bottom could be in for the D X Y. 
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.