COT: The precious data ignored

British pound still weak ?


My few reasons to keep shorting rallies for the coming week. For the level to short, only the price will tell me where to short, market is too dynamic to have a predetermined level to short

S&p500 sentiment

Bullish reading for the past sessions, its screaming for correction. Will the market breathe?


Souce : ndr.com

Crude bounce before falling more?

Crude oil long/short Matrix




Selling remains, but based on what operators are doing, we could expect a bounce in crude before further sell off

Playing with COT datas part 1



Playing with COT datas, inversing them, changing them, can give good results. I'll tweak them more and see what i can find

Playing with COT datas part 2



Green and red are good signals, red sell with tops, green buy with bottom. So far, so good, Smart Money is being smart

Blue are bad signals, first one is strong sell on signal on bottom, second one strong buy signal on top, Smart Money is being dumb

Positions are lighter and lighter, watch out for some clean and steep moves soon.

Daily sentiment index



Nothing changed, equities and vix overloaded

Playing with COT part 3



More fall coming for EURO ?

I'd need to backtest it for the past 10/15 years and see how it goes

Historical datas EUR



Lets have a look at the leverage funds, short side only.
They tend to be very wrong on top/bottom, but they can be right depending where the price stands.

Chart speaks for itself so i won't explain its correlation, or its good indication of a direction.

Lately ? shorts are being accumulated, strongly, and price is barely moving.
2 options to trade :
-Price will go down heavily, shorts will accumulate more, reversal up will occur later then
-Price will retrace up, leverage funds will clear their shorts, it will be time to short the market.

Overall its still bearish, bounces should be sold, until COT tell us operators went wrong, so they'll reverse the positions

Looks like more fall coming. Yearly chart indicates this.

What are your blue/red boxes ?

thanks

Playing with COT datas part 4



Extreme areas to buy and sell for crude oil.

What are the extreme ?
80/20 ? 7 signals
70/30 ? 8 signals
60/40 ? 12 signals

If you put same efforts in reading and analysing Open Interest and Volume charts of Futures and Weekly Options (Futures mainly) you can have immediate actionable knowledge . You can easily day-trade any optionable instrument (with maximum Implied volatility 15%) stress-free and without using stop-loss. EurUsd volaility is less than 10%.

If you are a buyer of options, your risk is capped. Weekly option buying suits a trader who is expecting a big move (in case of Eurusd 80 pips at least) . The advantage is higher gamma (acceleration of speed) and delta (speed) and less time to expiry (less distance to price).

The disadvantage is as a buyer you pay more for time decay (almost twice) per day than for monthly options.

Attached Image (click to enlarge)

But I don't consider it as a disadvantage because I am being compensated by the exchange helping me greatly multiply the power of my starting capital without me having any margin facility with the broker or me paying any borrowing fee.

If I have the skills to be right 70% of the time, it is possible to turn relatively small amounts of capital into significant profits.

Selling weekly options is also good business for a trader since the seller will be able to sell 4 weekly (one month) options but get twice the usual monthly option premium.

Attached Image (click to enlarge)

It is win-win for all. By increasing the frequency of option expirys, the exchanges earn more fees, brokers get more brokerage and buyers like me get opportunity to do day-trade relatively stress-free and without single binary stop loss. I normally invest the money equivalent to stop loss value into buying of options.

The skill of buying comes from regular practice like you are preparing for rehearsals.

The skill to sell comes from astute money management and having sufficient capital. Focus will be on how to maximise turnover of limited option premiums earned and controlling risk by varying lots the way you handle drawdowns.

GBP chart


Chart says all. A high reading to 100% leads to a fall in prices. Will it repeat itself ?

Wheat extreme longs and shorts

Above/below 80% is starting to get extreme

Chart below shows Wheat with extreme longs topping 100% or nearing it


Chart below shows Wheat with extreme shorts topping 100% or nearing it

Sugar extreme longs and shorts

Above/below 80% is starting to get extreme

Chart below shows Sugar with extreme longs topping 100% or nearing it


Chart below shows Sugar with extreme shorts topping 100% or nearing it

Coffee extreme longs and shorts

Above/below 80% is starting to get extreme

Chart below shows Coffee with extreme longs topping 100% or nearing it


Chart below shows Coffee with extreme shorts topping 100% or nearing it

Those are yearly boxes. And shadowing weekly candles.

Wheat commodity extreme positionning

From 2006 until today (jan 2020)


Around 0% = Neutral
From 20% to 40% weak sell
From 40% to 60% strong sell
From 60% and beyond extreme sell

From -20% to -40% weak buy
From -40% to -60% strong buy
From -60% and beyond extreme buy

Will USD soar?

Attached Image

From the assets managers, whenever they are going extreme, bad things happen.

Live cattle's success and failure


The above charts represent the producers. They usually have the skills to finds tops and bottoms.
From these 2 charts, we can see its true. Producers have strong positions whenever a top/bottom occurs.
Lets have a look at the red and black circles. Its very unusual for the longs producers to increase their positions on top of a move. They do it at bottom. When they do it on top, its a failure. The same happens for the short producers. Increasing shorts on a bottom of a move is a sign of a classic failure
Now the black circles are the good ones. They increase their longs on bottom, they increase their shorts on top. Classic success




The same goes for the money managers. They are wrong on top/bottom when they increase too much their positions.
They are mostly wrong, but they are right for us because they give us the right direction.
I tend to "ignore" when they are right, or i look at the producers and see what they do.

Lately what to do ? Money managers haven't reached any extreme levels (above 80%) both longs and shorts
Producers are reaching extreme levels, both longs and shorts. We give more credits for the shorts as we are rising and reaching a top. Maybe the long producers are totally wrong.
We could be in for a retracement down for the moment