Get started

UUP

Currencies - UUP Bullish on the DollarIdea for UUP (S2): - Fed moving rate hike expectations forward. - August Jackson Hole meeting will see the Fed begin 'talking about tapering' (even though they have been tapering for a while), why wait until then? Smart money will move before then. - Brazil hikes rates. EM's will first race to hike rates. - Fed and ECB will have to move by EOY. - Technical Double Bottom. - Falling Wedge Reversal. - While it is early to call for a bull market in the dollar, it is showing strength, and fundamentals are bullish. Not a bad time to start a moderately bullish position. GLHF - DPT
AMEX:UUPLong
by UnknownUnicorn1043646
DXY - Dollar Squeeze into Q4Idea for DXY: - Why there may be a dollar squeeze into Q4 2021: - June 30, G-SIB banks begin stock buybacks. - Capital returned to investors nearing $200bn as estimated by Barclays. - $200 billion less of banks’ demand for reserves, Treasuries, MBS, and deposits. - "With a 5% SLR minimum at the holdco level, banks run 20-times leverage, which means that $10 billion in stock buybacks means $200 billion less of banks’ demand for reserves, Treasuries, MBS, and deposits" - Zoltan; That's 20x leverage = $4T of leveraged capital. - $1T o/n RRP usage continually drains systemic liquidity. - Zoltan: " So the sterilization of reserves begins, and so the o/n RRP facility turns from a largely passive tool that provided an interest rate floor to the deposits that large banks have been pushing away, into an active tool that “sucks” the deposits away that banks decided to retain." "And here is why the problem is similar to the repo crisis of 2019: soon we will find that while cash-rich banks can handle the outflows, some bond-heavy banks cannot. As a result, Zoltan predicts that next “we will notice that some banks (those who can not handle outflows) are borrowing advances from FHLBs, and cash-rich banks stop lending in the FX swap market as the RRP facility pulled reserves away from them and the Fed has to re-start the FX swap lines to offset.” Bottom line: whereas previously we saw Libor-OIS collapse, this key funding spread will have to widen from here, unless the Fed lowers the o/n RRP rate again back to where it was before." "the Fed turned “unlimited” quantities into “money for free” and started to sterilize reserves." "we are witnessing the dealer of last resort (DoLR) learning the art of dealing, making unforced errors" - China consumer spending as a % of GDP was only 54% last year (2011-2019 avg. of 53%) vs consumption in advanced economies averaging 70-80%. - YoY % deceleration means stagflation/deflationary positioning. - China has been the global economy driver since 2008, and were first to tighten monetary policy, so this a more accurate assessment of global economic health. - Spending problem in China fuels the demand for USD and US bonds, as they are seen as more secure than other DM/EM debt. - Previously forecasted the DXY Bounce in May: - Price is in sync with the Technicals: Predict 6000~ pips DXY squeeze into Q4. GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
Black Swan - Inflation is TransitorySpeculation for Macro: I argue that price and consumer price inflation do not influence equities as much as the dollar. Investors who are betting on stocks because of 'inflation' will be in for a shock. Yields indicate we may be entering stagflation. Economic slowdown and rising dollar will prove a stronger force than consumer price inflation. After all the Eurodollar market is the market. Not used cars, not meat, not even gas. Investors going on margin to buy stocks because of the inflation narrative are making a grave mistake. (Monetary) Inflation and QE are frauds designed to get force investors into riskier assets and distribute risk onto them. QE does not lead inflation. Credit leads inflation. QE is just a swap of reserves, so even if media is blaring that Fed is 'printing money' and 'hyperinflation' it does not leave the banking system. In fact, commercial banks hoard it all. We can see by reverse repurchase agreements that banks are stuffed with money and would rather take the overnight rate than trade it for risk. Money enters the economy through lending by the commercial banks. QE does reduce volatility by backstopping banks and guaranteeing solvencies. For a time, it forces investors into higher risk assets to search for yield. It affects investors' psychology and creates speculative bubbles by making them believe they are hedging against inflation. Jerome Powell was even mentioning the VIX in one of his interviews. They watch that. What is inflationary is credit. Investors, being deluded into complacency and invincibility, will take loans and buy more and riskier assets backed by lower quality collateral. We are not just talking about stocks either, but people will buy bigger homes, better cars, etc. More risk and more liabilities. All will be paid back. We know that the global credit impulse has peaked and China's Credit Impulse has turned negative. The Credit Cycle is reversing and debt will be called. Debtors at the front of the curve are harvesting their liabilities, and it will create a collapse in the credit bubble. Credit leads the economy. Credit is going down. Recession is coming, as indicated by yields. M2V has collapsed and is not even shown anymore. While seemingly complex, the economy is just a series of transactions. Low velocity of transactions is deflationary and signals a demand for the dollar, rather than goods or services. Furthermore, QE has a side effect of reducing the top tier collateral (US Treasuries) from the system. When the credit bubble collapses, the low quality collateral which investors have been forced into will suddenly become illiquid and bidless. The dollar actually rises with QE and the Fed Balance sheet (especially since 2008): Investors, particularly foreign sovereigns need the dollar to hedge US investments and creates more demand for it. It is the Eurodollar market that drives the price of the dollar and the global financial market. Just an aside, the Eurodollar market is all digital, it is the real Bitcoin. Sovereigns want dollars not Bitcoin. It is the Eurodollar market which drives risk-taking and currencies. QE is a tiny drop in the ocean. While certain commodities are heating up and there is a lot of 'news' about demand and supply chain shortages, I believe that commodity demand will rather decline to follow the price of the dollar, not the other way around. Shortage expectations are assuming a nation running at full capacity, but productivity is slowing and the labor market is revealing tightness. Shortages are typically followed by gluts. News follows price. Watch for big busts in 2022 similar to lumber in many commodities. It is more a speculative bubble, rather than a fundamental one. Credit leads the economy, which leads dollar demand, as banks and sovereigns hoard it because they know recession is coming. Real rates will continue to fall, offshore dollar shortages are showing, as massively leveraged businesses like Evergrande collapse, and it may only be just the beginning. It is a Lehman moment for China. With defaults, there is more forced demand for the dollar. When dollar demand rises to uncontrollable levels, there can be no more lending, and there will be a cascade of insolvencies by junk bond issuers. At this point, yields may indeed spike. The dollar will continue to rise, and the only thing that can stop it is the US defaulting on its debt. Watch for the debt ceiling, but remember that has been raised almost every year for 100 years. Technically, the dollar is in a demand zone, with a double bottom and testing resistance. Unless the debt ceiling is not raised, I doubt it will go back to 80. When dollar demand rises to uncontrollable levels, there can be no more lending, and there will be a cascade of insolvencies by junk bond issuers. Being long inflation, you are basically short the dollar right now. This cascade can happen slowly... then all at once. Fund managers are FOMOing into risk, as you can't miss a quarter by being bearish if you are managing money. Damn the consequences. When it blows up, everyone will blow up, and they will be bailed out anyway, right? You aren't in a worse position than anyone else. However, when it ends, everyone will want out, and fast. The first one out wins. My point is that credit contraction, followed by a rising dollar which is about to break out will crash this bubble. The bottom line is that there will be a collateral squeeze, as there is more that has been lent out (leverage) vs the high quality collateral that creditors desire, as indicated by margin debt at ATH... While retail believes that the opposite is happening and they willingly destroy themselves by taking on risk for collateral. What is so different from now than 08? NFTs and cryptocurrencies are similar to the CDOs of subprime mortgages. They are just highly leveraged packages of lending backed by low-quality collateral, or even nothing. The product, or ticker, might change, but they are just units of credit, which are dictated by the Credit Cycle. I've been hearing that the market can't go down until there is a blowoff top. What do you think this is? When it comes to debt, you can't just 'not pay it back'. Federal budget deficit doesn't have much to do with it. The money that is 'printed' by the Fed is just hoarded by banks, and Treasury and Fed are separate. However, more Treasury debt just means citizens pay more in taxes, as it is paid for by tax revenue as it matures. It will only increase the cost of borrowing for corporations, causing more downward pressure on the economy, which will make banks hoard even more. Again, on top of that you have default risk (watch the debt ceiling), and reduced government spending outside of debt servicing. Military, social, and economic influence will decline. China just continuously buys US debt to devalue the yuan and gain a trade surplus. Increasing the US federal deficit will increase debt servicing and decrease military spending, and in the case of a default, while China will lose revenue, they will gain share of global influence. That's the game that's being played between them, so you can't just default. What happened in Afghanistan? In the end, it's really all just a ruse for those that lead the Credit Cycle to harvest more wealth and assets. Since when did people believe markets can't go down, Fed has your back, you have to be in stocks to beat inflation. It's not different this time. There is nothing new under the sun. I guess you could say that inflation was an attempt to use credit to boost the underlying economy, which failed. The real black swan will be a deflationary shock. "Inflation is transitory." - Jerome Powell GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
17
UUP - Dollar strength. possibly as high as 26?With some of the recent tightening rhetoric and pressure on the indexes, it's not much of a surprise demand for dollars has been increasing. We have a pretty clear bullish wedge break followed by a double bottom. Give this one at least a month or two -- I feel 26 is within reach (distance on 'W' is around 24.15-25.15, so 26.15 would be the actual expectation). We are right near short term resistance here, but I feel we will break through this as upward momentum seems quite reasonable (MACD)
AMEX:UUPLong
by tacosaurus
SPX-UUP Weekend open discussion asking for a friend any thoughtsAny one would care to share his experience on UUP ETF. This ETF offers exposure to a basket of currencies relative to the U.S. dollar, decreasing in value when the trade-weighted basket strengthens and increasing when the dollar appreciates. This fund could be appropriate for investors seeking to a fund that is inversely correlated to the broad stock market or for those making a bet on a flight to quality. For investors seeking exposure to the dollar against a broad range of developed market currencies, UUP is one of the best choices out there. Top Holdings Symbol Holding % Assets N/A Government & Agency Portfolio 73.00% N/A United States Treasury Bill 16.19% CLTL Invesco Treasury Collateral ETF 10.80%
AMEX:UUP
by samitrading
GME-style Returns in a Fortnight (UUP calls)There are compelling indicators that we are on a verge of a February 2021 market correction and the USD is expected to breakout due to investors moving from equities to bonds and USD. The VIX index and 10 year bond yield have increased significantly recently. 10-year Treasury note yield TMUBMUSD10Y, 1.149% booked its largest weekly rise since June. A rising USD is another sign of impending liquidity crunch, debt implosion and stock market crash/ correction. It might mean people are demanding cash and supply is short. UUP.NYSE (consists 100% of Mar21DXH1/Dollar Index based on Invesco Product Detail Statement) is selected for the purpose of this research. It is evident from the chart that UUP has ‘predicted’ the March 2020 market crash and September and October 2020 market correction. The red flags are bullish UUP RSI rising towards the 70-80 range (a sign indicating smart money might be hedging their bets) and sustained MACD line (BLUE) movements above the MACD signal line (RED). Those two signals occur well ahead of the market crash and corrections, the RSI has 100% accuracy based on the most recent market dynamics. Moreover, February is the second worst month in the history of markets after September according to records dating back to 1928. Gamestop aftermath and Robinhood CEO testifying before Congress on February 19th might present uncertainty and trigger market sell-off. Lawmakers with stance similar to Kevin O’Leary (Democrat-Massachusetts Secretary of State) are expected to make headlines in the near future under the façade of ‘preventing little guys (retail investors) from getting hurt’ reducing retail investors margin and increasing current margin requirements (thus reducing investors firepower). COVID vaccine news have been priced in but vaccine shortage and constraints remains and investors might want to book into their profits. . Recent major indices futures are pointing down too and indicate the bullish momentum is falling. It might be a good time to hedge the market now through VIX or/ and UUP. VIX and UUP moves in the same direction but UUP calls are currently pennies with low implied volatility. UUP 19 Feb $ 26 calls are currently priced at $ 0.01, if UUP hits $26 on Feb 19, the profit and loss will be $ 4000 (on a $ 1000 investment) and $ 99,000 ($ 1000 investment) if UUP hits $ 27. opcalc.com
AMEX:UUPLong
by Trifecta_Capital_LLC
1
GME-style Returns in a Fortnight (UUP calls)There are compelling indicators that we are on a verge of a February 2021 market correction and the USD is expected to breakout due to investors moving from equities to bonds and USD. The VIX index and 10 year bond yield have increased significantly recently. 10-year Treasury note yield TMUBMUSD10Y, 1.149% booked its largest weekly rise since June. A rising USD is another sign of impending liquidity crunch, debt implosion and stock market crash/ correction. It might mean people are demanding cash and supply is short. UUP.NYSE (consists 100% of Mar21DXH1/Dollar Index based on Invesco Product Detail Statement) is selected for the purpose of this research. It is evident from the chart that UUP has ‘predicted’ the March 2020 market crash and September and October 2020 market correction. The red flags are bullish UUP RSI rising towards the 70-80 range (a sign indicating smart money might be hedging their bets) and sustained MACD line (BLUE) movements above the MACD signal line (RED). Those two signals occur well ahead of the market crash and corrections, the RSI has 100% accuracy based on the most recent market dynamics. Moreover, February is the second worst month in the history of markets after September according to records dating back to 1928. Gamestop aftermath and Robinhood CEO testifying before Congress on February 19th might present uncertainty and trigger market sell-off. Lawmakers with stance similar to Kevin O’Leary (Democrat-Massachusetts Secretary of State) are expected to make headlines in the near future under the façade of ‘preventing little guys (retail investors) from getting hurt’ reducing retail investors margin and increasing current margin requirements (thus reducing investors firepower). COVID vaccine news have been priced in but vaccine shortage and constraints remains and investors might want to book into their profits. . Recent major indices futures are pointing down too and indicate the bullish momentum is falling. It might be a good time to hedge the market now through VIX or/ and UUP. VIX and UUP moves in the same direction but UUP calls are currently pennies with low implied volatility. UUP 19 Feb $ 26 calls are currently priced at $ 0.01, if UUP hits $26 on Feb 19, the profit and loss will be $ 4000 (on a $ 1000 investment) and $ 99,000 ($ 1000 investment) if UUP hits $ 27. opcalc.com
TVC:DXYLong
by Trifecta_Capital_LLC
1
short-term bullish dollar play UUPThe dollar has bounced off its bottom trend line. After having such a long period of weakening, it is due to bounce back a bit. It is extremely rare for the dollar to not reverse the trend after an extended period of strength or weakness. It may not rally back much, but it will give you some gains in the short-term. Sell half when it hits the upper trend line and let the other half ride. There have been some contrarian calls on Wall Street for a surprisingly strong dollar. UUP is a way to play the bullish dollar. I currently have a vertical call spread expiring 2/19 with the buy-strike being $24 and the sell-strike being $26.
AMEX:UUPLong
by EBITDAtiger
TTM Squeeze says up we go!TTM Squeeze is almost never wrong when it says up, even in this major downtrend. Looking for catalysts? - Political gridlock on stimulus - No Deal Brexit - Covid 19 flaring up - Short term target is just above 25 - Longer term, if this is a bottom or should there be another liquidity crisis, this could go to 27 and beyond. Disclaimer: The above is not an investment advice. It is merely an idea and an opinion and I share it for your entertainment only. Do your own due diligence and above all, trade safely and stay safe!
AMEX:UUPLong
by adventurous51