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

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.

Historically speaking, Chinese M1 is key for cyclical plays.

Q3 GDP estimate from evercore is already at 20%.

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.

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

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

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

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

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.

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.

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.

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.

HNI/family office gold holding as % of assets.

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