COT Report Analysis - a thread on market sentiment - Page 148
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  1. #1471
    Join Date
    Dec 2013
    Location
    bangkok
    Posts
    826
    Hey guys!

    I just took a quick glance over weekly gold chart and apparently gold is resting on a major support level. From what I've read weekly support levels are usually pretty serious and there sure was some buyers that had been eyeing for this level for some long positions... wonder how far gold will go ?

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    Oh why did I jump on dollar longs that quick!

    Silly me for thinking I've got it....

    Intermarket correlation looks like a reliable tool to gauge dollar strength. As for silver it has already broke through weekly support and heading down. Well its about time for gold to catch up with its buddy.....
    Last edited by rookie39; 10-08-2014 at 06:17 PM.

  2. #1472
    Join Date
    Jul 2014
    Location
    Indonesia
    Posts
    108
    Hi Rookie,

    I think it's too early to say. The way I understand silver & gold relationship is that the ratio between them will favor gold. I'm not sure about which following which, but the kind of trades I can make out of this relationship is to short silver when silver price is way over or getting too close to gold.

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    Nb: on second thought, it'd be better to see the ratio in histogram chart rather than the line chart.
    Last edited by flows; 10-08-2014 at 08:21 PM. Reason: Adding chart

  3. #1473
    Join Date
    Sep 2013
    Location
    USA. Pittsburgh, Pa.
    Posts
    963
    Hey guys.
    We have a Wednesday here.

    NZD: +7 -0 0///+5 -0 0
    EUR: +4 -1 2///+2 -1 0
    CHF: +4 -1 2///+1 -1 1
    CAD: +3 -2 2///+2 -1 2
    GBP: +3 -2 2///+1 -1 1
    AUD: +2 -5 0///+2 -3 0
    USD: +0 -6 1///+0 -3 0
    JPY : +0 -6 1///+0 -3 0

    Well Comms took this one. +5

    So for the week the back and forth looks like this.

    Monday: C +12
    Tuesday: M +6
    Wednes: C +5

    And once again the NZD has struck again, being on top. They have absolutely either been on top or bottom, and has been alternating 8 straight trading days now.

    Well, I'm taking a major hit guys. When I got home I got out of the NZD/USD and NZD/JPY trades. Losing big time.
    But, I'm in on the AUD/JPY. Going up. That only now. I'm gonna stick with that one for a while.

    Talk to you in the morning.

    00 GMT shot
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  4. #1474
    Join Date
    Oct 2014
    Location
    Hungary
    Posts
    356
    As promised here's my take on Gold. But before we get busy analyzing, I'd like to present the way I go on about my trading. So, I learned the ropes from Steve Briese and Larry Williams. I'm sure you've read their books. Since I don't trust in charting services, I constructed the indicators presented in Williams' books by myself. I use an Excel sheet and it looks something like this.

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    There's nothing fancy there, only the basic tools.
    - Commercial & Non-Commercial Net positions for the last 3 years.
    - COT Comm & Non- Comm Index (3 years)
    - COT Comm Movement Index
    - Comm Long & Short + Open Interest chart.
    - Comm Long & Short / OI chart
    - Willco Indicator (1,5 years) (was pretty difficult to figure out the formula)

    Okay, enough of my method. Let's get to work.

    Gold

    It's pretty obvious that we are at a major support zone. The price hit the 1180 level 3 times so far, each hit met with less Commercial buying & Non-Commercial selling.

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    Since Funds are fueling the moves, that means that they still have some bullets to spare to take the trend lower.

    The COT Index readings are below extreme levels on both sides (10 ; 90)

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    Same with Movement Index.

    It's important to note that overall OI has been declining in 2014. Low OI readings are usually symptoms of a bottom. Commercials have been buying heavily into the decline, increasing their longs compared to OI from 35% to 40 % while reducing their shorts from 65% to 50%. (Bullish sign again)

    If we take a look at Willco (CP / OI Index), it tells us that Commercials are favoring the long side (net 75% long compared to the last 1,5 years).

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    Bottom line is: I'm staying flat since COT Index remains neutral. That means that the Funds can take the price below that level.
    Last edited by BBalazs; 10-09-2014 at 03:15 AM. Reason: Wrong picture for COT Index

  5. #1475
    Join Date
    Oct 2014
    Location
    Hungary
    Posts
    356
    Quote Originally Posted by ForExchange View Post
    Hi BBalazs,

    welcome in the thread. We analyse the COT report on the weekend, share the results, discuss it and post trade ideas for the upcoming week. We manage our trades and discuss the news and our running trades during the week.

    In case you stay with us, there is always some work going on so you will be busy :-),

    FE
    Sweet! Glad to be the part of the team

  6. #1476
    Join Date
    Dec 2013
    Location
    bangkok
    Posts
    826
    Welcome to the team Balaz!

    Your analysis and charts alike do look fancy to me ;p. But I like how you constructed your own indicator on excel from scratch. FE should have something to say on that. But first off allow me to take you through what we do here briefly.

    FE /the captain/ and I analyse COT report on a weekly basis, FE covers specs and I do the comparison specs and commercials and occasional fundamental write ups. Mike brings on the stats along with majors and comm split. Philip is working on developing a system for crosses. Flows has joined in recently.

    And last but not least we've got Peter, he's the wise one we all look up to him. When he posts something you make sure to write it down on your note and keep it with you. You'll know what I mean. We cover from COT data , fundamentals to intermarket correlation. Quite a lot actually. And the rest I'll leave it for you.

  7. #1477
    Join Date
    Sep 2013
    Location
    USA. Pittsburgh, Pa.
    Posts
    963
    Good morning fellas.
    BB.....welcome!
    Wow. Looks like you've done your homework. I'm impressed.
    Stick around. Would love to hear your opinions on what's going on in the market. What do you watch? Anything in particular? How far out is your scope on the market? Do you see the big picture, with the different indices and market correlations, or are you zoomed in on something particular, like the commodities?

    Talk to us.


    Again welcome!


    Mike

  8. #1478
    Join Date
    Sep 2013
    Location
    USA. Pittsburgh, Pa.
    Posts
    963
    Hey Doc Rookie!

    Talk to me. What do you think on the AUD/JPY? I remember we mentioned about the AUD not too long ago.
    I think they are the underdog that just could be on the comeback now. Especially after the bad news that just came out for them. And their on the way up! That tells me something.

    What do you think?


    Mike

  9. #1479
    Join Date
    May 2014
    Posts
    971
    Quote Originally Posted by flows View Post
    Hi Rookie,

    I think it's too early to say. The way I understand silver & gold relationship is that the ratio between them will favor gold. I'm not sure about which following which, but the kind of trades I can make out of this relationship is to short silver when silver price is way over or getting too close to gold.

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    Nb: on second thought, it'd be better to see the ratio in histogram chart rather than the line chart.
    I like that idea flows, can you keep an eye on that ratio for us from time to time?

    Rookie it is a very strong support level. from an intermarket perspective, FE and Peterma would know better, its a ripe time to buy gold with the weakness seen in dollar as well as the bounce in Euro. It is the biggest bounce since May. AUD is also going up.

  10. #1480
    Join Date
    Dec 2013
    Location
    bangkok
    Posts
    826
    Afternoon guys!

    I was planning to take a day off today. But I couldn't resist checking our thread. Well here I am. I better post something. No write ups for today but few coming tomorrow including this thursdays FOMC minutes of meeting.

    I have closed my NZDUSD, AUDUSD and EURUSD with a loss again. Stay strong guys! Mike! we're going to get through this. I have been thinking a lot.

    I was watching this film called catch a trader, that shows how hedge funds trade with 'inside news'. These guys aren't even looking at gartleys, or any other fancy indicators. They simply place a long order thats worth of millions right before the positive news at a bargain price and double or even triple the amount in a matter of minutes or even seconds. How do they know ? Crystall ball ? intuition ? They get inside news. I know its unfair. But thats how it is.

    I'm not sure if hedge funds trade currencies but in currency trading there're banks and institutions on the other side playing against us, the fact that banks have control over short term price makes things even harder than it already is. No wonder why its hard for a retail trader to stay in the game with consistent profit. For an outsider it seems like a battle that can't be won.

    And I've realized after all this what we do is probably the smartest way to play along with the big guys. From now on I will be keeping track of every annoucement from central banks, minutes of meetings on my note. I'll be posting them here regularly and I'll try to be on time. We knew Fed officials were getting concerned about strong dollar, and how latest payrolls data really meant. But we've looked past all this well I certainly did and opened couple of long dollar trades.

    Look at EURUSD guys, euro has been ignoring bad data and keeps climbing up, I'm thinking its probably the banks that are marking euro higher to entice the retailers to give more momentum and once they like what they see 'the price' they go short wiping out the retailers that were fooled and went long.

    While I do think COT data is crucial it still is few days old, and while there won't be any drastic change from week to week on COT positioning. A lot happens during the week, like banks or instutions coming in marking the price up or down. I think we need to shift our attention to the latter , and try to find ways to figure out when banks or instituitions are buying or selling. Then we're more than halfway to get there. Very close.

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