We’ve already mentioned the breakdown in the Commitment of Traders (COT) data. The commercials (also known as the professionals) are record short the greenback as their speculator counterparts are very bullish. The last three times we saw this picture produced three important peaks in the greenback. Two peaks occurred right away while the third took a few months.
Below, we embed a post from the Business Insider, who provides us with more evidence of bullish sentiment on the greenback.
Mind you, we aren’t bearish the US$. We’ve been constructive for months. However, we don’t see a sustained rally or an upside explosion ala 2008. Our call is for sustained bearish consolidation.