While a $97.6 billion inflow into equity exchange-traded funds since election day might qualify "long equities" as being the most crowded trade right now, however, that would be missing THE most crowded trade on the planet right now:
The US Dollar. Have a look at a chart of the two largest currency crosses (EUR/USD and USD/JPY) and see what has happened in the last 6 weeks; while the euro has nearly fallen from over 1.10 to parity the Japanese has completely fallen apart to the tune of ~15% against the greenback:
When USD/JPY rises it means that US$1 buys more yen, the move from ~103 to nearly 120 since early November is the largest move in such a short period of time for the USD/JPY pair.
While the fundamental case for these dollar moves is substantial, whenever everyone is entirely convinced that a given market must move a certain direction it's time to begin thinking about what could go wrong - What could go wrong with all this dollar bullishness in 2017?
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