Loading ...Something is Amiss
Awry , mistaken , erroneous ,rotten and just plain wrong
UUP is the US Dollar ETF right ?
well it just made a new high BUT The Dollar Did not.
How can this “divergence ” be ?
UUP “Holdings” are exactly what makes up the Dollar Index.
Swiss franc Swiss franc -3.60%
Swedish krona Swedish krona -4.20%
Canadian dollar Canadian dollar -9.10%
British pound British pound -11.90%
Japanese yen Japanese yen -13.60%
euro euro -57.60%
Perf Chart…to show % move in the last 2 years
Give me a minute. I’ll post my view of UUP…
Fully, IMO this positive divergence is from the market-action component of the ETF — Investors have been correctly anticipating the strengthening dollar and bidding UUP up.
> The dollar is going up, no question. Way up. <
– – – – – – – – – – – – – – – – – – – – – – – – –
My December chart of the UDN (inverse dollar) in reversal mode:
https://goldtadise.com/?p=453120
I agree . I think the Dollar is going Up …..not necessarily WAY up but trending up at the least
I still don’t get the argument that the Dollar will crash in this enviornment
This is really quite simple.
If you believe in a Dollar Crash…You believe the Euro will Soar !
The Euro with all its warts and problems and lest we forget NEGATIVE rates.
I am not certain of anything in this market BUT I am certain the Euro CANNOT Soar .
As far as UUP….I am not sure it works like that but maybe
I thought these ETFs have to track the underlying ( USDX) regardless of how much buying there is.
Not sure.
Fully, If ETFs didn’t have Bid and Ask prices, then yes the price would directly track the underlying index.
ETF prices are additionally influenced by supply and demand of the bid-ask market.
I have often tracked the % difference between an ETF and its Index for positive or negative divergences.
………………………………
To confirm, I found this: “market price of the ETF is determined by the value of the fund’s holdings as well as supply and demand in the market place for the ETF.”
https://www.ishares.com/ch/individual/en/education/etf-pricing-and-valuations?switchLocale=y&siteEntryPassthrough=true
The last time UUP outperformed $USD by this much was in late 2008.
You may have uncovered something quite significant here, Fully.
Perhaps it’s later than we think!
Time to start building the Big Short?
Great Sleuthing Alfa !
I had no idea UUP could legitimately diverge from the DX
And no idea of the potential significance.
No big Short form me…its hazardous …with these huge short covering rallies
BUT why not just buy some UUP and watch it go UUP
🙂
I have thought of UUP from time to time, but its average volume is only 398K. I don’t touch anything without 5M av. vol. b/c I use market orders.
Well, coincidentally I did start building SH today, convinced by some behind-the-scenes things, like comparative volume analysis and watching ‘whales’ take huge bites, etc. I’ll step this up to SDS when S&P starts dropping hard. If it does start to go against me in a big way, I’ll hedge temporarily with TQQQ. That’s today’s plan, I could change it tomorrow on a dime of course, lol. 🙂