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    Brave New World: Is huge shorting of dollar a reversal signal?

    Synopsis

    Either we are on the cusp of near-term reversal or we will have some sideways correction.

    Ritesh Jain

    Independent Market Expert, Mumbai

    He is a trend watcher, Global Macro investor and Blogger at worldoutofwhack.com. He has over 20 years of experience in financial markets, bonds, equities, gold, and derivatives. He muses about global macro investment opportunities, economics, business, and financial issues.

    Ritesh Jain, a Dalal Street veteran, trend watcher and Global Macro Investor, captures global macro investment opportunities and economic, business and financial trends with charts and commentaries in this space.

    Silver miners are not confirming this move or miners are going to bolt out of gate next.
    U1ET CONTRIBUTORS

    Historically speaking, Chinese M1 is key for cyclical plays.
    U2ET CONTRIBUTORS

    Q3 GDP estimate from evercore is already at 20%.
    U3ET CONTRIBUTORS

    US Treasury is borrowing most of the money only at shorter end. This is strange because at these interest rates, they should be borrowing at longer end. Maybe they know there is no demand.
    U4ET CONTRIBUTORS

    US 10-year real yields hit a new low of negative 1.1%.
    U5ET CONTRIBUTORS

    Everybody is negative and short US dollar. Either we are on the cusp of near-term reversal or we will have some sideways correction.
    U6ET CONTRIBUTORS

    The bulk of the US dollar devaluation happens in negative real rates environment.
    U7ET CONTRIBUTORS

    The percentage of us manufacturing industries in decline has peaked - this typically happens at the end of recessions-variant perceptions.
    U8ET CONTRIBUTORS

    We are at -0.90% on real yield and the correlation with gold is striking. I think we are headed for -3 to -4% on real rates over next few years.
    U9ET CONTRIBUTORS

    Aud/Yen is known as the biggest carry trade in the world. It is flirting with a breakout, which would add to bullish case for commodities.
    U10ET CONTRIBUTORS

    Most significant data point in today's ISM & Markit PMI surveys is the sharp rise in ISM new orders vs inventory spread. This piece of data is consistent with high 50's print in the composite reading before year's end. The Atlanta Fed is already predicting a 20% jump in 3rd quarter US GDP.
    U11ET CONTRIBUTORS

    Keep an eye on ‘payroll tax” cuts because effective corporate taxes will only go up from here. This has major positive ramifications for “blue collar” workers.
    U12ET CONTRIBUTORS

    HNI/family office gold holding as % of assets.
    U13ET CONTRIBUTORS

    We are at 2.7% allocation compared to a high of 9.3% allocation in 2011.

    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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    The Economic Times