USDU, which debuted last December, will usually feature exposure to 10 currencies but can accommodate up to 20. Currently, the fund devotes 31.3% of its weight to the euro and 19% to the Japanese yen.
Parets notes extreme bearish sentiment surrounding the greenback could be a sign the dollar is poised to pop. That negative sentiment should include the $68.7 million pulled from UUP over the past 90 days.
“The buying opportunities come when the public is too pessimistic about its prospects for gains compared to their opinion over the past year. Big sell-offs don’t happen when everyone expects it. And this data is telling us that the crowd is positioned for a big sell-off. So I’d prefer to take the other side of that,” said Parets.
PowerShares DB US Dollar Index Bullish Fund
