Weekly COT report Analysis + Trade Ideas

If you lost money last month, don't fret, the hedge funds did too

Hedge Funds Post Biggest Monthly Losses Since Lehman Aftershock

June 1 (Bloomberg) -- John Paulson, Louis Bacon and Andreas Halvorsen navigated the global market turmoil of 2008 with little or no damage. They weren’t as successful last month as the Dow Jones Industrial average had its worst May since 1940.

Hedge funds lost an average of 2.7 percent through May 27, according to the HFRX Global Hedge Fund Index, as the sovereign debt crisis in Europe triggered declines in stocks, the euro and commodities, and the gap in yields between U.S. short-term and long-term debt narrowed. It was the biggest decline since November 2008, when hedge funds lost 3 percent in the wake of Lehman Brothers Holdings Inc.’s bankruptcy two months earlier.

Almost every strategy lost money in May, according to Hedge Fund Research Inc. in Chicago, as the Dow index of 30 big stocks sank 7.6 percent including dividends amid speculation that Greece’s debt problems would spread to nations such as Spain and Portugal. Some of the best-known funds saw their gains for this year erased.

“Attempting to manage risk in an environment where everything that could go wrong does go wrong seems like a fruitless endeavor,” said Brad Balter, who runs Balter Capital Management LLC, a Boston firm that invests in hedge funds for clients. “The only defense that seems to work in months like these is being in cash.”

Paulson’s Advantage fund dropped 6.9 percent through May 21, dragging it to a year-to-date loss of 3.3 percent, according to investors with knowledge of the results, who asked not to be named because the information is private. Halvorsen’s Viking Global fund fell 3.4 percent in the same span and 2.9 percent for the year. Bacon’s Moore Global declined 7.7 percent as of May 20 and 4.8 percent in 2010, investors said.

To read further: http://www.bloomberg.com/apps/news?p...d=adVl0mzlTekk

Thanks for the reading Patience. It makes me feel good as I had one of my best months ever in trading in May.

Hello Geppyg,

I am also having problems posting into the 600 Pips a Month with Shahab and GeppyG as it says that I am not authorized.

Could you please look into this

Thank you,

Bouzies

Shahab,

Do we stop comming around here no more ( Tom Petty ) or continue on both threads...........

De nada. Well done on your May profits. Now the trick is keeping it I had a pretty good month as well but it does make it even better when I see the super smart hedge funds finding it difficult. I would have been really peeved if May had wiped out all my profits for the year (like some of those hedge funds).

Thought I may as well post the sentiment index for those who like to have a gander. Nothing too telling here except those traders are back shorting the Loonie again. Open interest has also dropped across the board. Probably a smart move leading up to ADP and Bernanke's speech on Thursday with NFP and G20 meeting on Friday.

SSI: Retail Traders Fight USDCAD Slump as 1.04 Range Gives, Broader Market Holds Steady
Wednesday, 02 Jun 2010 19:10 GMT
Written by John Kicklighter

FXCM Speculative Sentiment Index (SSI) Statistics:



SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at 1.06 as nearly 51% of traders are long. Yesterday, the ratio was at -1.11 as 53% of open positions were short. In detail, long positions are 7.1% higher than yesterday and 3.2% weaker since last week. Short positions are 8.5% lower than yesterday and 27.5% stronger since last week. Open interest is 1.1% weaker than yesterday and 4.5% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD losses.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.06 as nearly 51% of traders are short. Yesterday, the ratio was at -1.42 as 59% of open positions were short. In detail, long positions are 6.1% higher than yesterday and 8.2% weaker since last week. Short positions are 21.1% lower than yesterday and 12.3% stronger since last week. Open interest is 9.9% weaker than yesterday and 0.1% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at 1.06 as nearly 51% of traders are long. Yesterday, the ratio was at 1.12 as 53% of open positions were long. In detail, long positions are 0.0% lower than yesterday and 8.8% weaker since last week. Short positions are 5.7% higher than yesterday and 17.2% stronger since last week. Open interest is 2.7% stronger than yesterday and 0.5% 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 1.36 as nearly 58% of traders are long. Yesterday, the ratio was at 1.83 as 65% of open positions were long. In detail, long positions are 13.6% lower than yesterday and 28.0% weaker since last week. Short positions are 15.6% higher than yesterday and 27.6% stronger since last week. Open interest is 3.3% weaker than yesterday and 10.3% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at -1.34 as nearly 57% of traders are short. Yesterday, the ratio was at -1.42 as 59% of open positions were short. In detail, long positions are 0.4% higher than yesterday and 10.4% weaker since last week. Short positions are 4.7% lower than yesterday and 11.8% weaker since last week. Open interest is 2.6% weaker than yesterday and 12.1% below its monthly average. The SSI is a contrarian indicator and signals more USDCHF gains.

USDCAD - The ratio of long to short positions in the USDCAD stands at 1.94 as nearly 66% of traders are long. Yesterday, the ratio was at 1.28 as 56% of open positions were long. In detail, long positions are 29.7% higher than yesterday and 49.6% stronger since last week. Short positions are 14.8% lower than yesterday and 14.7% weaker since last week. Open interest is 10.2% stronger than yesterday and 7.4% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at 1.07 as nearly 52% of traders are long. Yesterday, the ratio was at 1.11 as 53% of open positions were long. In detail, long positions are 1.1% lower than yesterday and 7.5% stronger since last week. Short positions are 3.2% higher than yesterday and 25.5% stronger since last week. Open interest is 0.9% stronger than yesterday and 0.7% below its monthly average. The SSI is a contrarian indicator and signals more AUDUSD losses.

NZDUSD - The ratio of long to short positions in the NZDUSD stands at -1.10 as nearly 52% of traders are short. Yesterday, the ratio was at 1.49 as 60% of open positions were long. In detail, long positions are 10.6% lower than yesterday and 28.0% weaker since last week. Short positions are 45.9% higher than yesterday and 25.2% stronger since last week. Open interest is 12.1% stronger than yesterday and 6.0% below its monthly average. The SSI is a contrarian indicator and signals more NZDUSD gains.

USDX 4 Hour - Are we gonna get a break out this Friday?

As we moved that thread to Trading Journal ,I'll post here too, but mainly COT, for trade ideas visit the new thread.

Hi Patience, thanks for the SSI,
As you pointed out U/Cad short seems promising

Hi Shahab - it does but I've vowed not to trade that pair for a while. Looks like it is going to be an exciting week. After posting that ascending triangle on USDX 4 hour, I flicked through my charts and see Jurik has alerted me to a buy possibility on E/U weekly chart (is the worm finally turning?) If the low for the week is already in at 1.2110 and it does average weekly range of 344 pips (last 26 weeks), we could see 1.2450 this week. Hmmmm .....

U/CHF Short Entry @ 1.1531
Reason: Daily chart CCI divergence

Just entered EUR/U, Long @ 1.2294
Reason: Daily chart CCI divergence

Where is the SL level?

On my daily chart trades, always the following

SL: 30 points
TP: 30 points

Thanks as ever Patience.

Will yo ucontinue to post Sentiment details on this thread? It is in a similar vein to COT positioning? Cheers.

Sure, no problem, I can post it when I'm around. There is something wrong with the charts with this morning's reading so I can only post the statistics. I read the statistics anyway of the currencies I'm interested in rather than looking at the charts. It's a problem on FXCM's end - looks like they didn't load them properly or something.

The traders are liking the short trade on NZD/USD. As they are not so short on AUD/USD, this usually translates into more losses for AUD/NZD. It's not a cross I usually look at much but now I'll look at a chart and see if I like it - the 5.5 pip spread isn't that tempting though.

SSI: Retail Traders Fight to Keep NZDUSD Rally Below the 20-Day SMA, Shorts Jump 61%
Thursday, 03 Jun 2010 08:58 GMT
Written by Michael Wright

FXCM Speculative Sentiment Index (SSI) Statistics:

Intraday Highlight:

NZDUSD - The ratio of long to short positions in the NZDUSD stands at -1.74 as nearly 64% of traders are short. Yesterday, the ratio was at -1.13 as 53% of open positions were short. In detail, long positions are 4.2% higher than yesterday and 2.3% stronger since last week. Short positions are 60.5% higher than yesterday and 21.0% stronger since last week. Open interest is 34.1% stronger than yesterday and 155.6% above its monthly average. The SSI is a contrarian indicator and signals more NZDUSD gains.

SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.06 as nearly 51% of traders are short. Yesterday, the ratio was at 1.01 as 50% of open positions were long. In detail, long positions are 0.8% lower than yesterday and 12.1% stronger since last week. Short positions are 5.8% higher than yesterday and 4.0% weaker since last week. Open interest is 2.5% stronger than yesterday and 116.5% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.16 as nearly 54% of traders are short. Yesterday, the ratio was at -1.08 as 52% of open positions were short. In detail, long positions are 1.7% lower than yesterday and 0.7% weaker since last week. Short positions are 5.7% higher than yesterday and 8.9% stronger since last week. Open interest is 2.1% stronger than yesterday and 106.2% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at 1.03 as nearly 51% of traders are long. Yesterday, the ratio was at 1.04 as 51% of open positions were long. In detail, long positions are 1.3% higher than yesterday and 5.5% stronger since last week. Short positions are 2.0% higher than yesterday and 7.3% stronger since last week. Open interest is 1.6% stronger than yesterday and 107.6% 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 1.29 as nearly 56% of traders are long. Yesterday, the ratio was at 1.39 as 58% of open positions were long. In detail, long positions are 1.3% lower than yesterday and 16.3% weaker since last week. Short positions are 6.5% higher than yesterday and 4.8% stronger since last week. Open interest is 1.9% stronger than yesterday and 91.9% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at -1.23 as nearly 55% of traders are short. Yesterday, the ratio was at -1.05 as 51% of open positions were short. In detail, long positions are 11.2% lower than yesterday and 2.2% weaker since last week. Short positions are 4.5% higher than yesterday and 5.8% stronger since last week. Open interest is 3.1% weaker than yesterday and 91.9% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF gains.

USDCAD - The ratio of long to short positions in the USDCAD stands at 1.86 as nearly 65% of traders are long. Yesterday, the ratio was at 2.05 as 67% of open positions were long. In detail, long positions are 6.3% lower than yesterday and 22.0% stronger since last week. Short positions are 3.3% higher than yesterday and 5.2% stronger since last week. Open interest is 3.1% weaker than yesterday and 124.0% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at -1.10 as nearly 52% of traders are short. Yesterday, the ratio was at 1.08 as 52% of open positions were long. In detail, long positions are 3.4% lower than yesterday and 7.0% stronger since last week. Short positions are 14.9% higher than yesterday and 11.5% weaker since last week. Open interest is 5.4% stronger than yesterday and 120.8% above its monthly average. The SSI is a contrarian indicator and signals more AUDUSD gains

Nice one Patience

I only trade europe $ majors too. FWIW I had a look at BarCap's BARX today, good fills direct from barcap, excellent software/charts, spreads good: EU 0.8pips, GU 1.4pips, Uchf 1.6pips. cheers

That's interesting. Have not come across Barclays platform before. Will take a look at some stage. I trade mostly with Oanda and I think they are great. Really fast execution when I'm doing my ninja trades (compared to my FXCM tradestation platform). I thought 5.5 pips was a little hefty for AUD/NZD and that's Oanda. I've just logged into my FX Solutions platform and the spread is 20. They are so ridiculous. That account is a throw back to my early FX days - used to be IFX Markets - I might place a trade once in a blue moon with them. How they get new clients with spreads like that is beyond me. Need to withdraw that money and shut that one down.

Well looking sad and drab out there. If the E/U has now put in the high for the week then we could be looking at 1.20 tomorrow. Ho, ho, ho. Had a false breakdown overnight from my ascending triangle on USDX 4 hour but it has now returned into it. And as for that AUD/NZD it's done a range of about 50 pips today. Can't wait to trade that one - so volatile

HI Shahab,
I am currently studying two important days of 10th and 11th June ( astrologycally). Movement of the market on these two days will be substantial. On initial studies 10th of june looks like a big drop on the dow, and 11th a reversal, but I am still in the initial stages of the study.

In the past some members did not want to see anything to do with things other than technical charts.
If you dont mind I can keep posting my findings here, otherwise I can ask members who are interested to email me directly and I can send them the results.

Good Luck

Hi there,
So we will be heading down on 10th, right? We should be loading shorts then,do you think it gets much higher before the drop?

Regarding what you mentioned, please continue posting here.That's good to know about other approaches beside the charts.

btw,let us know when you find out more about the drop.

Thanks Shahab,
Yes I think a good drop is due on 10th June. I will post my suggestions on DOW shorts soon. Also its time to start shorting the USD/Yen from now anyway it wouldnt hurt.
Astrologically, this is a quiet period, things going sideways, until the 10th, But knowing that we have the NFP in US this could prove to be wrong, we will wait and see.
I am trying to establish the source of trouble for the 10th. Due to some planetary positions, Airline industry is going to be in turmoil. Another industry that is in trouble as well is the resources (through to end of December). Distruption in communication is also on the cards during next 2 weeks, which means computer and internet problems. Putting all these together I would think that there will be atleast one air disaster probably around middle east (asia). You will also see downfall of some major airlines. So for those trading shares, I would start to look into shorting airlibes operating out of Asia and Europe. Unfortunately I dont know much about listed airlines in that region.
Coming back to the source of trouble, most probably some news out of Middle east or Asia will affect the market, but I will confirm later.

I will be studying the charts (astrological) from tonight through to Monday (which is Sunday night your time) and will post the results then.
I will try my best to justify my findings with technical analysis as well.

Thanks once again for letting me speak out my findings on your thread.

Roll up, roll up, the NFP circus is in town - a once a month event not to be missed! If you dare to trade, throw small soldiers out there protected by big barricades. Sentiment readings mean ning on days like today but this is how your brothers and sisters are positioned for the big top event. Let's hope the elephant doesn't squash them.

Keep it green

SSI: NZDUSD Ratio Flips Following 41% Jump in Shorts
Friday, 04 Jun 2010 10:13 GMT
Written by Michael Wright

FXCM Speculative Sentiment Index (SSI) Statistics:




SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at 1.38 as nearly 58% of traders are long. Yesterday, the ratio was at 1.53 as 60% of open positions were long. In detail, long positions are 2.8% lower than yesterday and 21.5% stronger since last week. Short positions are 7.3% higher than yesterday and 11.6% stronger since last week. Open interest is 1.2% stronger than yesterday and 109.3% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD losses.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.10 as nearly 52% of traders are short. Yesterday, the ratio was at 1.01 as 50% of open positions were long. In detail, long positions are 5.3% lower than yesterday and 1.4% weaker since last week. Short positions are 6.1% higher than yesterday and 37.9% stronger since last week. Open interest is 0.4% stronger than yesterday and 111.4% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at -1.03 as nearly 51% of traders are short. Yesterday, the ratio was at 1.05 as 51% of open positions were long. In detail, long positions are 3.1% lower than yesterday and 16.3% weaker since last week. Short positions are 5.1% higher than yesterday and 46.6% stronger since last week. Open interest is 0.9% stronger than yesterday and 103.6% above its monthly average. The SSI is a contrarian indicator and signals more GBPJPY gains.

USDJPY - The ratio of long to short positions in the USDJPY stands at 1.19 as nearly 54% of traders are long. Yesterday, the ratio was at 1.21 as 55% of open positions were long. In detail, long positions are 2.2% higher than yesterday and 13.0% weaker since last week. Short positions are 3.8% higher than yesterday and 23.1% stronger since last week. Open interest is 2.9% stronger than yesterday and 96.4% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at -1.04 as nearly 51% of traders are short. Yesterday, the ratio was at -1.30 as 57% of open positions were short. In detail, long positions are 17.8% higher than yesterday and 36.8% stronger since last week. Short positions are 6.1% lower than yesterday and 3.9% weaker since last week. Open interest is 4.3% stronger than yesterday and 99.0% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF gains.

USDCAD - The ratio of long to short positions in the USDCAD stands at 1.69 as nearly 63% of traders are long. Yesterday, the ratio was at 1.68 as 63% of open positions were long. In detail, long positions are 0.6% lower than yesterday and 16.7% stronger since last week. Short positions are 1.1% lower than yesterday and 8.2% stronger since last week. Open interest is 0.8% weaker than yesterday and 113.4% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at -1.05 as nearly 51% of traders are short. Yesterday, the ratio was at -1.02 as 51% of open positions were short. In detail, long positions are 8.8% higher than yesterday and 14.6% stronger since last week. Short positions are 11.1% higher than yesterday and 10.2% stronger since last week. Open interest is 10.0% stronger than yesterday and 120.0% above 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 -1.33 as nearly 57% of traders are short. Yesterday, the ratio was at 1.16 as 54% of open positions were long. In detail, long positions are 8.9% lower than yesterday and 9.8% weaker since last week. Short positions are 40.6% higher than yesterday and 15.4% stronger since last week. Open interest is 14.0% stronger than yesterday and 118.9% above its monthly average. The SSI is a contrarian indicator and signals more NZDUSD gains.