CoT data (Futures) is issued every Friday (3:30 PM EST) wherein the consolidated data is from Tuesday to Tuesday only. The three days before the release date are not included. It means there is a three-day lag between the report and the actual positioning of traders. This is an eternity by short-term investing standards, and by the time the new report is issued, it has already missed a large amount of trading activity. Think of it as illegal insider information received early by Michael Corleone (CFTC) but then he shared it only to the public after three days. ; )─
The CoT data is an essential tool for gauging current and future sentiment in the Futures or Forex market. It is highly advisable not to use CoT data alone when it comes to your trading decision. For me, the report is not designed as a market entry tool, because the market can be near-term bullish in a long-term downtrend. Although, it can be used to confirm the mid/long term fundamental bias in a given market.
Though there is never one report─data/information or tool that can give you certainty about where prices are headed in the future, the CoT data does allow the small investors a way to see what larger traders are doing and to possibly position their positions accordingly. Such as, if there is a large manage money shorts interest in EUR Futures, that is often an indication that a rally may be coming because the market is overly pessimistic and saturated with shorts - so you may want to take a long position (on normal market conditions).
Futures data offer a proxy for volume but represent only a small fraction of the currency market. Also, inter-market relationships govern currency price action.
Since Frank Sinatra sings in his own way, my chart sing... I did it, my way
2
.. Bears are really in charge of the market for the week, despite the strong support levels they stand to face on the way.. We currently have a rising wedge and a rising channel on daily, which I expect us to break below today.. I think we will see 1.1203 this week...
, TR 1.2152/59
