Weekly COT report Analysis + Trade Ideas

Yep, you're the king of bottom picking Wadda day, wadda day. Gap filled on Loonie and USD/JPY exploded sideways Does anyone trade this pair with any conviction? It's one damn ugly major. I never used to take much notice of it but because I'm mostly trading A/J now, I tend to keep more of an eye on it. It seems the Reserve Bank of India put the wind up the market's skirts with their rate rise. If that hadn't of happened, it may have been a more boring day.

SSI: Retail Traders Take the Opportunity to Book Profit on Short GBPUSD Positions
Friday, 19 Mar 2010 20:14 GMT
Written by John Kicklighter

FXCM Speculative Sentiment Index (SSI) Statistics:



Intraday Highlight:


GBPUSD - The ratio of long to short positions in the GBPUSD stands at 1.71 as nearly 63% of traders are long. Yesterday, the ratio was at -1.19 as 54% of open positions were short. In detail, long positions are 22.0% higher than yesterday and 28.0% stronger since last week. Short positions are 39.7% lower than yesterday and 34.9% weaker since last week. Open interest is 11.5% weaker than yesterday and 6.9% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at 1.41 as nearly 59% of traders are long. Yesterday, the ratio was at 1.25 as 55% of open positions were long. In detail, long positions are 2.1% higher than yesterday and 28.8% stronger since last week. Short positions are 10.0% lower than yesterday and 39.4% weaker since last week. Open interest is 3.3% weaker than yesterday and 4.5% below its monthly average. The SSI is a contrarian indicator and signals more EURUSD losses.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at 1.82 as nearly 65% of traders are long. Yesterday, the ratio was at 1.23 as 55% of open positions were long. In detail, long positions are 13.3% higher than yesterday and 32.8% stronger since last week. Short positions are 23.3% lower than yesterday and 18.6% weaker since last week. Open interest is 3.1% weaker than yesterday and 5.9% above its monthly average. The SSI is a contrarian indicator and signals more GBPJPY losses.

USDJPY - The ratio of long to short positions in the USDJPY stands at 1.67 as nearly 63% of traders are long. Yesterday, the ratio was at 1.77 as 64% of open positions were long. In detail, long positions are 1.0% higher than yesterday and 6.0% stronger since last week. Short positions are 6.9% higher than yesterday and 15.4% stronger since last week. Open interest is 3.1% stronger than yesterday and 1.1% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCAD - The ratio of long to short positions in the USDCAD stands at 2.71 as nearly 73% of traders are long. Yesterday, the ratio was at 2.56 as 72% of open positions were long. In detail, long positions are 11.8% lower than yesterday and 15.2% weaker since last week. Short positions are 16.7% lower than yesterday and 42.2% stronger since last week. Open interest is 13.2% weaker than yesterday and 11.4% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at 3.06 as nearly 75% of traders are long. Yesterday, the ratio was at 3.03 as 75% of open positions were long. In detail, long positions are 3.4% lower than yesterday and 0.0% weaker since last week. Short positions are 4.1% lower than yesterday and 43.3% stronger since last week. Open interest is 3.6% weaker than yesterday and 40.1% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at -1.43 as nearly 59% of traders are short. Yesterday, the ratio was at -1.74 as 63% of open positions were short. In detail, long positions are 8.2% higher than yesterday and 3.4% weaker since last week. Short positions are 10.9% lower than yesterday and 1.2% weaker since last week. Open interest is 3.9% weaker than yesterday and 5.0% below its monthly average. The SSI is a contrarian indicator and signals more AUDUSD gains.

NZDUSD - The ratio of long to short positions in the NZDUSD stands at -1.18 as nearly 54% of traders are short. Yesterday, the ratio was at -1.83 as 65% of open positions were short. In detail, long positions are 15.9% higher than yesterday and 16.7% weaker since last week. Short positions are 25.0% lower than yesterday and 10.3% stronger since last week. Open interest is 10.6% weaker than yesterday and 2.0% below its monthly average. The SSI is a contrarian indicator and signals more NZDUSD gains.

USDX Weekly

Nice strong weekly candle on USDX. About time to break out of this consolidation. Let's see if it can manage 50% fib this week.

G'day patience,
Friday was crazy, when I took long on U/Cad at 1.0070 I target the gap you mentioned , I tought you might go for it , I was waiting for the 2nd news to be released to get a better long entry when you post that gap,
and it worked well, all the people that said E/U is a round bottom should be wondering by now!! I pefer my descending scallop,
we saw some sign of correction in stocks on Fri, I think this week is a bear week

it seems G/U got some traders on its sharp fall, I missed that one

Yeah, it's looking more positive. Finally got a 4 hour candle opening and closing under my 34 EMA on A/U. Haven't had this since 25 February. As well as the descending trendline rejecting PA and the weekly doji. And I think the indices need a correction anyway.

Well they were correct as more were short. It appears they took profit on shorts and loaded up on longs yesterday afternoon.

E/U looks oversold but I've always thought that there was a possibility we could see 1.23 this year just based purely on the high being 1.4483 and the average yearly range for the last 10 years being 2161 pips. Minus 2161 pips from 1.4483 gives us 1.2322. I know it sounds a bit unreal but I've learnt to never say never in this market. I remember in 2004 the market was freaking out that the E/U hit a high of 1.3664/6 and now it just seems normal that we are ranging around this area.

CADUSD COT (inverse of U/Cad)
as I expected the side of long Loonie trade is getting more and more crowded, the large institutes added to their long CADUSD (short U/Cad) from 61,399 to 69,640 contracts, look at the Open interest record high at 180,184,

COT index (13 weeks) is 100 (bullish extreme for CADUSD, inverse for U/Cad),

to sum up I think there U/Cad is bottoming,

it is not unreal, I think when the US government remove the stimulus package and start hiking later this year the market will fall sharp, that will hit E/U the most as they are not in a position to raise rates anytime soon.

So many opinions on when they are going to start raising. Some say not even until 2011. One thing they all agree on though is that Benny + other Fed members will be giving the market plenty of notice. So I reckon any kind of hawkish rhetoric will see the E/U pummelled. Yeah, 1.23 is not so far away .... Catch ya later

U/Cad:

I think there is a bearish hidden divergence in 4H, it should be confirmed by PA later on to make us bearish for a bit longer ,I'll buy a break of R at 1.0233 otherwise I prefer to sell against R at 1.0196 (for intraday trades) and buy dip in U/Cad to build positions for a longer TF as i think we are bottoming in U/Cad

Just checked in to see whether Igrok had posted anything lately. He doesn't post much these days. Have you seen that thread? All that really technical stuff that I'm no good at I think you would find it interesting.

http://www.forexfactory.com/showthread.php?t=21887

Thanx Patience for the thread, It is a really interesting thread indeed, I added it to my favorites

G/U

the large trader added to short G/U and increased the net short positions from 63,473 to 63,987 contracts but the open interests show a decrease from the yearly high no of 148,562,

COT index is 5 which is extreme bearish, last week we saw an upward correction although less than what I expected , the structure of the chart tell me there will be another push lower before a larger upward correction

my G/U view,

A/U

my view on EURGBP

Shahab8b,
When evaluating the COT report, how come you typically only look at the large traders? are the COMMs not just as influential?

Thanks for your insight

Cheers

I explained this in the first page but I repeat it here for your convenience: " Commercial:This group consists of market participants who use the futures contracts for hedging purposes, and these commercial participants are generally exporters and importers who are hedging against currency fluctuations. "

some traders like to look at commercial but I don't because commercials are usually in the wrong side and mirror the non-commercial large traders.

my trade set up are as follows:

SELL high on E/U, G/U,A/U
BUY Dip on U/Cad and U/Chf:

based on this set up condition:
here are my pending orders:

Sell limit EURUSD at 1.3610 SL=1.3750 TP=TBD
Sell limit GBPUSD at 1.515-20 SL=1.5215 TP=TBD
Sell limit AUDUSD at .9233 and .9320 SL=.9400 TP=TBD

Buy limit USDCAD at 1.0078 SL=1.00 TP=TBD
Buy Limit USDCHF at 1.0530 SL=1.04 TP=TBD

G/U pending sell limit order

G/J;
update ; as expected