(1) U.S Dollar Index Chart ::
US Dollar Index :: Dollar carry trade game prove all technical wrong from last two month.. Is The US dollar heading towards zero..?? Dollar chart, looks like inverse chart of stock market and commodity market..
Important factor fuelling this asset bubble is the weakness of the US dollar, driven by all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has keep interest rate on hold,, Investors who are shorting the US dollar to buy on a highly leveraged basis higher yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms, they are borrowing at very negative interest rates as low as negative 10 or 20 % annualized, as the fall in the US dollar leads to massive capital gains on short dollar positions. Traders are borrowing at negative 20 % rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade. Every investor who plays this risky game looks like a genius, even if they are just riding a huge bubble financed by a large negative cost of borrowing, as the total returns have been in the 50-70 % since March.. But one day this bubble will burst, leading to the biggest co-ordinate asset (like stocks, commodity) bust ever.. If factors lead the dollar to reverse and suddenly appreciate, the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. And collapse of all those risky assets like equities, commodities, emerging market asset classes and credit instruments. This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall,,
And chart pattern tells that carry trade game may be end sooner..
Dollar index moving down as 5 of C last leg and maximum target of this 5th leg in between 74.40 to 74.60.. Already treading near end of wave target.. May be any time Dollar start to move up from low as far as stay above 74.40 (time target 16th Nov to 18th Nov).. For conformation of 5th of C over when rally start to trade above 77.. Till then wait and watch and stay away form stock and commodity market.. If US Dollar fail to sustain above 74.40 then next strong support March low 70.70..
(Some part of post copy from Financial times 1st Nov post)
Important factor fuelling this asset bubble is the weakness of the US dollar, driven by all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has keep interest rate on hold,, Investors who are shorting the US dollar to buy on a highly leveraged basis higher yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms, they are borrowing at very negative interest rates as low as negative 10 or 20 % annualized, as the fall in the US dollar leads to massive capital gains on short dollar positions. Traders are borrowing at negative 20 % rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade. Every investor who plays this risky game looks like a genius, even if they are just riding a huge bubble financed by a large negative cost of borrowing, as the total returns have been in the 50-70 % since March.. But one day this bubble will burst, leading to the biggest co-ordinate asset (like stocks, commodity) bust ever.. If factors lead the dollar to reverse and suddenly appreciate, the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. And collapse of all those risky assets like equities, commodities, emerging market asset classes and credit instruments. This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall,,
And chart pattern tells that carry trade game may be end sooner..
Dollar index moving down as 5 of C last leg and maximum target of this 5th leg in between 74.40 to 74.60.. Already treading near end of wave target.. May be any time Dollar start to move up from low as far as stay above 74.40 (time target 16th Nov to 18th Nov).. For conformation of 5th of C over when rally start to trade above 77.. Till then wait and watch and stay away form stock and commodity market.. If US Dollar fail to sustain above 74.40 then next strong support March low 70.70..
(Some part of post copy from Financial times 1st Nov post)
for all other people calls please trade at your own risk