COT Report Analysis - a thread on market sentiment - Page 3
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  1. #21
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    Hi Dunstan,

    thanks for the answer. Actually I use the same report with same link as you do. But now I see which values you use. That was actually my problem because if you write "Light Sweet" or "Crude oil" in the search box with the link, then there are more light sweets or crude oil hits. I wasnt sure if I used the right one.

    Your writing is interesting about options since I never traded options and it is good to look into it a bit. I will first master COT, have enough to do still and then I can will look after these futures However I think I will only look for opportunities to buy.

    Have a grood trading week!

  2. #22
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    Quote Originally Posted by ForExchange View Post
    Hi Dunstan,

    thanks for the answer. Actually I use the same report with same link as you do. But now I see which values you use. That was actually my problem because if you write "Light Sweet" or "Crude oil" in the search box with the link, then there are more light sweets or crude oil hits. I wasnt sure if I used the right one.

    Your writing is interesting about options since I never traded options and it is good to look into it a bit. I will first master COT, have enough to do still and then I can will look after these futures However I think I will only look for opportunities to buy.

    Have a grood trading week!
    No problem, it was my pleasure! Just let me know if you have any questions.

    I also wish you a great trading week!
    All the best,
    Dunstan

  3. #23
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    Hi everyone,

    before looking at the new COT Report, lets take a look how the trades from last week worked:

    NZD/CAD short at 0.9200: -67 pips, stop loss activated at -50 pips
    USD/MXN short at 12.8525: stop loss would be activated
    CAD/CHF long at 0.8245 (this week started at 0.8257): -87 pips from the beginning (this week: -75)

    Well, we can say it was not my week. The CAD got a large hit and both CAD trades were going the wrong direction. With NZD/CAD I had a tight stop loss and I am out.

    USD/MXN: it is hard to say how I would have finished this trade. As I mentioned earlier I do not know this pair, I was only watching the action and did not participate. I think though that the break of the channel (Forexunlimited wrote about the technical bias of this pair) would have activated the stop loss. Here is the question of MXN really weakens or it was only a breakout because the sentiment is still bullish for MXN with 84.31% non-commercial total long positions in the new COT Report.

    CHF/CAD: I have to rethink this pair the next week. The fact is that CAD is still bearish from the non-commercial point of view but the long positions for CHF also dropped which means the pair looks more balanced at this time. I will stay for at least 1 week in the trade.

    Soon I post the findings of the new COT Report.

  4. #24
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    Take into consideration for last weeks' action, that it was the first week of the month where key reports were published which always create a huge volatility in the market:

    Now here are my findings for the following week:

    AUD: although it does not look to be completely in an extreme position, 61.68% non-commercials are long, AUD had gained hundreds of pips since February and Fundamentals are not helping AUD either. I think latest in a couple of weeks, AUD will be turning to the downside. I will look at it closely to get in at the right time.

    GBP: although the Pound gained again this week, 64.10% of non-commercials are already long, looking at the Cotbase.com graph and interpreting the news it looks like GBP is loosing its steam. Just like the AUD, it might not yet been in a turning point but it this will come soon to the downside!

    CAD: as you might know, I am bullish on CAD and I am also in a long trade vs. the CHF. My bullish bias stays with CAD, maybe I should change the setup though and not trading against CHF but against another currency. Non-commercial net long positions are 37.05%, fundamentals were not great this week but I think CAD can rebalance and will gain some pips again.

    EUR: people got quite negative on the EUR within 5 weeks of time. Of course it is logical as the currency lost almost 400 pips vs. USD. 38.78% of non-commercials are long and the interest rate cut does not help the currency either. I rather stay away from this currency. COT makes slowly a signal to buy, on the other side my fundamental bias is more to sell.

    JPY: if I am getting really bullish on a pair, it is the JPY. Only 12.65% of the non-speculators are net long, so it is getting to a COT extreme. USD/JPY is in a tight range since half a year. On my opinion it is only a matter of time when JPY breaks out and get strength. And for this time I do not think that we have to wait long!

    CHF: it looks a lot more balanced as last time. It is still not really bullish though, and as I said I will stay in my CHF short trade but might change it in a week.

    USD: just like the last months, the USD is producing all kinds of mixed reports, quite balanced currency without clear directions. I do not see good trading opportunities tor the currency.

    NZD: I would compare the NZD to GBP and to AUD. It has a long period of strengthening behind it and it looks like steam is lost and the downside starts. What is different to AUD and GBP though the NZD started already the downward movement in my opinion about a month ago. It retraces of course and still show strength however 82.14% net long positions of non-commercials show that there are not too many possibilities to grow and the decline will most likely come/is already in decline.

    BRL: this week we have to travel to Brasil for an exotic currency setup. The BRL has a net long position of non-commercials of 75.07% and open interest raised about 20% this week. This shows that volatility and action is about to come!

    Instead of giving tipps to exact currency pairs this week, I rather tell my medium- and long-term view on the different currency:

    Bullish: CAD and JPY
    Bearish: AUD, NZD and GBP.
    Neutral (including currencies with slightly bullish and slightly bearish): USD, EUR and CHF.


    I wish good luck to you all and I am interested about your opinion what your medium- to long term bias is on the currencies!
    Last edited by ForExchange; 06-08-2014 at 09:35 AM.

  5. #25
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    Hi everyone,

    the new COT Report did not come out yet, but the values and conclusions from last week can be already analysed. I guess I can say that everything was going fine until the NZD rate hike and BOE Speech from Mr. Carney last night. Both of the were market mover, the question is how long.

    On the long term I still have a bearish bias both on GBP and NZD however I have to say this week they gained against my expectations, mostly because of the mentioned fundamental reasons.

    AUD showed a mixed picture this week. Just like CAD, which was gaining nice against some of the currencies but was consolidating against the stronger currencies. I think it is a great indication that CAD is getting stronger in the long-term.

    If someone is looking for a completely mix picture of a currency then the JPY is the right choice. Gaining, losing and consolidating against its counterparts in the same week.

    EUR is mostly bearish as expected and CHF is going down with it.

    The USD is not producing good reports and is losing the whole week against most of its counterparts.

    Lets see what the new report brings to us tonight!

  6. #26
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    COT Report 13.06.2014.

    Yesterday I wrote how I found the market action last week based on currencies movement. So, lets see what the COT Report tells us this week. Very important that the percentile factors will always show the non-commercial speculators:

    AUD: 64.70% long shows that AUD is losing steam slowly. There were positive Chinese data out there this week, however AUD could only gain on weak currencies like the USD.

    CAD: now the CAD looks more and more extreme as only 35.77% of the non-commercials are long on the pair. The strength of the CAD can be most seen that it was probably the only pair not losing much against NZD and GBP last week!

    CHF: 43.19% of the people are long which is quite balanced. Charts tell us that CHF lost against most of its counterparts, this has a lot to do with weak EUR and that SNB would like to keep its rate steady with EUR, which means if EUR weakens, CHF weakens too!

    GBP and NZD: GBP has 63.31% long and NZD has 85.19% long. There is a reason why I have both of these currencies together. I think in the long term they will both lose values as most of the traders are already long on these pairs, especially on NZD. Especially the NZD, which is almost in a COT extreme. It is important to say though that it might take some time still as both of the currencies got very bullish fundamentals the end of the week (rate hike for NZD and earlier rake hike possibility for GBP). And in this moment it is also very important to mention that the COT report shows the situation until Tuesday evening which is a 3 day relay to our current standing. And as both currencies gained a lot int he last days, we can assume that they are actually on a more COT extreme then what the report shows.

    EUR: it is a tough situation with the EURO. The Fundamentals are clearly bearish for me and sentiment is also bearish with only 30.23% long from non-commercials. However exactly this 30.23% shows in the sentiment that very many people are already short and on cotbase.com it can be seen by EURO that the currency is already in an extreme short position.

    JPY: if last week the currency was bullish, then it comes to an extrem position slowly with only 11.22% long positions! Against some currencies it is close to an extreme COT situation (AUD, NZD and GBP) while against some others it started already its journey to strengthening (USD, EUR, CAD and CHF).

    USD: no clear tendency. It is ranging (CHF) against some of its counterparts, but gains (EUR) or loses (GBP) as well.

    Open interest: there is a quite large open interest compared to last week for the following 3 currencies: GBP, JPY and AUD. This indicates that we have to have special attention for these currencies!

    As I look into this report every week more in details, combining it with fundamentals and entering based on technical signals, it looks like a great strategy!

    The CAD/CHF trade that I took earlier made a very nice movement this week so I will definitely stay in this trade.
    Last edited by ForExchange; 06-20-2014 at 05:07 PM.

  7. #27
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    So, the analysis of the COT Report comes from me only on Sunday or Monday, today I look how my forecasts of the currencies worked out from last week.

    The CAD/CHF trade is doing great and I will stay in it for a longer time.

    AUD: just like I thought, the AUD is weak, only gained vs the EUR and shows weakness.

    CAD: as you might know I am very bullish on CAD. This last week CAD gained on all of the majors, it had to do though a lot with the very positive report readings today.

    CHF: usually CHF does not get as much attention as this week. It had to do with the SNB statement and CHF gained vs the majors besides vs CAD. I was bearish on CHF and my bias stays bearish, but I will watch out to change my bias if needed.

    GBP and NZD: I put these two currencies in one category last week and I do the same this week. GBP issued negative fundamentals this week, but two hawkish currencies like GBP and NZD should have shown a better weak than it did. As I wrote, I am bearish on the currencies and despite rate hikes, the currencies did not gain this week or they showed a very mixed picture. I think it is a confirmation that a trend reversal might come very soon. In case you are bullish on these currencies than in some pair there is a retracement now so it could be a good entry point for you.

    EUR: as my fundamental bias is short with EUR but COT gave more a bullish signal I stayed away trading this currency. Looking at the performance against the majors, the picture is quite mix and no real tendency could be observed. I am excited what the new COT report will show us!

    JPY: based on the COT report I got most disappointment from the JPY. It has been extreme bearish and a trend reversal is expected quite soon. JPY however either lost vs majors stayed in a range but did not gain against its counterparts. It has a lot to do with the bearish BOJ statement but still…

    USD: now for the Greenback I wrote that there is no clear tendency at all. This mixed bias stayed for the past week and we can make the conclusion as USD was either ranging or losing against other counter currencies. A clear tendency still cannot be seen. The FOMC statement did not sound like very optimistic though…

    That’s it guys for the movement of the 8 major currencies for the past week. Altogether I am satisfied with the analysis; I did not get the right picture for JPY and have to pay more attention for CHF movements.

    Have a nice weekend!
    Last edited by ForExchange; 06-23-2014 at 02:33 PM.

  8. #28
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    It is already Monday so it is important to see the COT report analysis from last Friday. Please do not forget that the percentile factors in the analysis mean the non-commercial large positions.

    AUD: based on the COT report and on Cotbase.com the AUD looks quite weak, and shows a mixed picture among the majors. 64.20% are already long so I would either short the currency or stay away from it.

    GBP: the pound showed a mixed picture and could not gain much even though the rate hike announcement. 67.73% are long so the reversal should come sometime soon.

    CAD: I am still most bullish on CAD and it gives me good result against other major currencies. Still only 38.12% are bullish so there is plenty of space for improvement and strength. Interesting is that large speculators are still bearish while small speculators are very bullish on this pair. We do not see very often such a great difference between these two groups as at the moment.

    EUR: based on the report the currency gained some strength since last week. Both large and small speculators are very bearish and it is on quite an extreme level based on the cotbase.com table which means we should buy the currency. However fundamentals are bearish so this mixed result makes this currency difficult to trade based on the market sentiment and fundamental reasons. On a long term I will still have a bearish view on this currency.

    JPY: I am expecting the Yen for trend reversals every week as only 17.19% are long on the currency. The weak fundamentals do not let though the currency to gain strength. The currency is stuck in a range in most pairs; I am still more bullish than bearish on it.

    CHF: the Swiss Franc had some gains last week and more than half of large speculators are long on it (56.50%). The currency still gives a mixed bias and as the Franc would like to have a relatively stable rate with the EUR and the EUR is weakening so CHF might be weakening in the long run too.

    USD Index: USD lost against many currencies and it is not a surprise if we look at the fundamentals and speeches from the Fed. I also do not expect any difference in the upcoming weeks.

    NZD: probably this currency is the most interesting this week. There is a huge sentiment change for NZD! A week before 85.19% was long and this week longs are only 54.71%. This is especially interesting because NZD has the highest interest rate and further rate hikes are expected.

    Gold, Silver and Crude oil: as you might know, commodities are very dependent on geopolitical risk. As Iraq and Syria are basically in war, the price of gold and silver rose right away. As Iraq has a large oil production it affects the price of crude oil as well and as production has problems at the moment it helped to increase the price of oil. All 3 commodities were bullish last week and this might stay like this in such a geopolitical situation.

    My current analysis shows the following results:

    Bullish: CAD
    Neutral or slightly bullish/bearish: CHF, USD, JPY
    Bearish: AUD, NZD, GBP and EUR.


    Let’s see what happens this week!

  9. #29
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    HI
    thank you guys for the useful info.
    Cheers

  10. #30
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    Hi ForExchange,
    Thanks for very useful analysis, I am doing fundamental trading and also considering stronger/weaker economic factors to open positions.

    The GBP is still looking strong, I would expect it to move even higher, as long as the interest rate outlook is positive.

    The AUD may still hang that high for some time, especially after the recent China PMI. Commodities (including iron ore) are rising, and aussie will pick up at some point.

    Good luck,
    CxInvestor,
    Funamental Trader

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