COT: The precious data ignored

Hello,

I could try during the week end.
Can you make a short list maybe ? would be easier for me

Thanks

Orange juice failed set up and how to get out

Below i'll show how a failed setup could have been avoided or at least less damaged than predicted by the COT report.
The ideal pattern is whenever there are extreme reading its time to load longs or shorts. But sometimes it doesn't work

The thing is to ALWAYS ALWAYS check every big market participants, check the pattern, what they have done in the past.


Classic buying setup, worked for 2/3 weeks then failed. Holding it for months would have been a loss.
How to avoid it ? If you bought it, its good to know where/when to exit. With the COT report there is no where, there is a when.
"When" could be when the spread went near 0. At a loss, but loss lower than where are the prices now


Now look at the chart above. Big anomaly !! Swap dealers are rarely into the market, they sell from time to time. Cautious
Either don't trade orange juice because its a thin market, or just watch out deeply whenever there are spikes in the short swap dealers. It could mean big orders have been done and they want a lower price in the future.

Overall i recommand buying Orange juice for the long run. Nothing else. But i don't trade it

Thank you. I will send you all the popular instruments symbols.

Yes please make a list so i can have a look. Maybe i'm missing some good trades in those markets.

For example i know S&P/Nasdaq are awful regarding COT report. Hard to trade based on it

If you enjoy day trading and just want to trade options for intrinsic value increase rather than the premium then weekly options provide far better opportunities than spot trading of fx and any other such instruments.

Weekly options are only good for traders who have definite view on how strongly and quickly the price will move in favoured direction. Choosing the day or a day before the expiration will be ideal for this kind of trading.

If you can hit 26 of 52 weekly options , each for 200%. I have posted my actual trades on FF but there is no interest in options here, so I stopped posting those trades in my journal.

https://www.forexfactory.com/showthr...3#post12317043

I am just gathering all data and just posting the pictures for your information. I will short list symbols after checking volume, liquidity and daily trading range. I intend to trade at least 20 instruments of weekly options if they meet my trading range on the last day or one day before the expiry.

Buying options depending on the strike price, duration and implied volatility provides gives a good run for your company for getting leverage from the exchange from 100 to 1000 times leverage with no stress given by my margin calls. OTM options of delta 10 to 20 gives huge leverage. I trade ITM for day trading because I don't have to worry for stop loss and in most cases my leverage comes up to 50 times for ITM.

You can buy Deep In the Money options (.85% delta) for positional trading without worrying about losing theta.The main issue is contract values of CME for SELLER BUT NOT FOR BUYERS.

If you buy an 0TM option for 10 points (equivalent to $12.5 per point or $125 on a $125,00 fx contract) , the exchange is giving you a leverage of 1,000 times without you putting up any margin with your broker or bearing any leverage or overnight swap costs. Besides you can have unlimited stop loss for the two days.
These are niche areas and a trader with even $125 can trade fx options. Options trading needs a lot of patience and practice. It is a rare skill that stays with your life and generates passive income for you .

Daily sentiment index


Source : daily-futures

Lots of assets to watch out over the next weeks.

We'll have interesting weeks ahead

Is Australian dollar bottoming ?


Here above are the open positions from the market participants.
I like to look at the big increase or decrease in positions.
I'll just talk about the open long from the dealers, and open shorts from the asset managers
Long dealers increased their positions from 30% to 41%, a big and fast increase as prices went down.
Short asset managers increased their positions from 22% to 36%, the highest level in more than 3 years. Aren't they too bearish that its time to close their shorts?

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This chart above represents the spread between asset managers and money managers.
Its not perfect for a signal, but we can see there is a net decrease in the spread. I give it more credit when its near a bottom. In 2017 it didn't work well because low spread appeared near the tops.
We have very low spread right now, which is near a bottom, if you are still shorts, watch out


This daily price of AUD relative to this oscillator shows exteme levels to long & shorts the AUD. Maybe another lows before taking off


This H4 price of AUD relative to this oscillator shows exteme levels to long & shorts the AUD.
H4 shows a potential bounce here, its extreme selling

CHF in the process of falling ?

For this analysis below, i'll be using USDCHF instead of the CHF index (its just inverted, nothing more)


Looking at the chart above, we see different open positions from the biggest market participants
Open shorts are increasing strongly, near the high over the past 3 years. Something to consider, while longs are falling strong.
From a money manager's view, their shorts are falling, same for asset managers, they don't believe in any fall in CHF (rise USDCHF), and we know they are wrong at top/bottom.
By looking at the positionning, CHF should fall, any rises in price (fall in USDCHF) will be meet by stronger positionning.


The spread between longs and shorts dealers have been hitting the negative side. It can go deeper into negative, but if you are short USDCHF, its time to cover some, like it happened in the past


The spread between the Asset managers and dealers show the same thing as the dealers only. It shows positionning is overstretched and correction up could happen.


Lets have a look at the long asset managers only. Whenever they are very long CHF, prices reverses (USDCHF rise, aka CHF falls). Watch out.


Technically, the daily doesn't look like a good setup, its in the middle, but we have bullish divergence


On the H4 side, its closer to a rejection, than a bounce.
Buying here is too risky. Its better to wait for a dip during the next weeks, before going up

Investing in Bitcoin, key are small traders?

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By having a look at the short side of the small traders, we can see they could be the key to invest in Bitcoins.
They accumulate shorts on the way up (green boxes) , while when they dump their short (red boxes) prices rise

JPY trade

3 charts speak for themselves

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Crossing COT datas for the EUR (EUR/CHF/JPY crossing datas)



It shows a different picture than shorting EUR now....and based on what JPY & CHF this current right could be the right one.

Dollar idea

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This thread is pure gold. Excellent analysis kuroro001!

Thanks mate, thanks for appreciating my work

Current Commodities Positionning (CCP)

short #sugar (SB)
short #cocoa (CC)
long #gas (NG)
short #wheat (ZW)

neutral #corn (ZC) / no bias / awaiting signal
neutral #soybean (ZS) / short bias / weakening awaiting long signal
neutral #coffee (KC) / short bias / weakening
neutral #live cattle (LE) / long bias
neutral #crude oil (CL) / short bias / weakening
neutral #copper (HG) / short bias / still strong
neutral #platinium (PL) / short bias / weak
neutral #cotton (CT) / long bias weakening /awaiting short signal

Is Spx COT irrelevant ?

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2 charts above, i have made the s&p chart using the vix datas.
One is regarding the short side of the money managers, the other is regarding the short side of the assets managers.

Both charts say all.
Its not perfect at all, timing is everything. But it shows when its time to take profits on its longs/shorts and whenever its time to think about shorting rallies/buying dips.

Lately it clearly shows market is way overstretched. A deep correction can happen anytime soon.

Daily sentiment



Dollar / Euro / CHF watch out

Coffee dead cat bounce?


Regarding the current positionning, the open longs from the producers (more like consumers here) were telling us a bounce were about to occur. They were increasing their longs as we went down. But if we look at the open short from the producers, they are still heavily loaded. Covering their shorts will lead us to new lows most likely.
I want you to have a look at the money managers, the short side. They are trend followers, usually they increase their positions as it goes one way or another.
During that bounce they increased their shorts, which is unusual unless they know something we don't. My guess is they could be right, make the coffee prices go lower, they'll increase their shorts even more...before reversing again.
A price of bean below 100 dollars is very worrisome for the producers. That's why it usually doesn't last too long below.


Here is a map of the market participant. Before the bounce occured, every participants were cooling off their positions. Producers are still very loaded with shorts overall, while money managers just went short. But we want extreme positions from them. Shorting rallies is still the strategy.


By just having a look at the short side of the money managers, their positions is still near nothing even though we are at the lows. They haven't been following the short move. They have just started to increase them this week. The could be right for some weeks, until they go extreme, then price reversal

Natural gas bounce?


Here is all the positions from all important market participants. Lets have a look at the most relevant part.
1/ The open longs from producers, they keep increasing. Most likely, consumers start to hedge, they may think a rise a coming. As we go down, they'll hedge even more at this point.
2/ The open shorts from the money managers, on its high, it doesn't decrease at all, position look extreme
3/ The open long from the money managers are decreasing now, they are giving up on the upside. Good news for longs?


Here is a map of the natural gas positionning. 2 things to notice :
1/ The spread of the producers is going higher, nearing positive over the past weeks.
2/ The spread of the money managers are going bigger each week. Caution ahead


This last chart only represent the short side of the money managers. As mentionned above, its going extreme. Shorting this market is being dangerous for a positionning and risk/reward side

Cocoa top soon ?


Here is all the positions from all important market participants. Lets have a look at the most relevant part.
1/ The open longs from producers, they keep decreasing. Most likely, consumers don't hedge, they may think a fall is coming. As we go down, they will start to hedge longs
2/ The open long from the money managers are at their highs over the past 3 years. Cocoa money managers are very optimistic


Here is a map of the natural gas positionning. A few things to notice :
1/ The spread of the producers is increasing on the negative side, its getting extreme, but can go more extreme.
2/ The spread of the money managers are going bigger each week, highest in 3 years, caution.
3/ The spread of the swap dealers, are going very low. Longs are dead for them


This last chart only represent the short side of the money managers. Its going lower, its like they don't see any fall, which is very dangerous