COT Report Analysis - a thread on market sentiment

[MikeWolski]

Hey guys.
Here’s what happened last week.

CAD: +738--------------------Came back from the last 2 weeks of major weakness. Surprising.
AUD: +552--------------------Coming back from much weakness. ‘Underdog’ made some strides.
USD: +229--------------------Still stronger than most overall. Strongest Major.
GBP: +208--------------------Showed strength.
CHF: -163---------------------Middle of the road.
EUR: -406---------------------Continuing with the weak trend.
JPY : -569---------------------Finally coming down. Safe haven status not happened this week.
NZD: -590---------------------Took a big hit this week. But strongest on Friday. Their either hot or cold.

Comms made +700 pips over Majors.

I think the whole point here is to see what happened, and then look back at the COT report and see if there was any correlations. I remember it being everyone pretty much bearish against the USD. So I guess that could be called true. This week was dominated mostly by the Comms. But USD did dominate on Wed. And is the strongest Major still.
This is only one week. But if I remember, the previous week was the same, all bearish against the USD also.
Wait…I think the GBP was neutral and less bearish also.

Just trying to make some connections. But I guess there will be an edge if you took the USD opportunities, (buying on dips).

Mike

[BBalazs]

Hey guys!

I have two instruments for you which worth some attention in my opinion.

I’ll start off with Silver, since it is more popular.

Do you remember my historical study of the relationship between Silver and Willco?

We came to the conclusion, that almost every-time Willco reached extreme readings (+90%), Silver soon rallied. The signal was more reliable when COT Index flashed extreme signals at the same time Willco did.

Well, guess what I have in my database? Extreme Willco combined with extreme COT Index.

It’s not exactly a setup you get everyday, so keep an eye out! :33:

I’m still a bit puzzled by the high OI readings. :34: It’s okay though, we saw that there were times when Silver bottomed out on high OI.

I’m looking for entry signals around $17.00 - $16.50

[BBalazs]

Copper

I’ve been closely following this instrument since last week.

COT INDEX + Willco Extremes.

Open Interest increasing, as well as Commercial longs. There is a slight increase in shorts.

I’d like to see a $290.00 touch (Support Zone) before going long.

[Nebula9]

Are you going long on silver BB ?

From what I know gold drives the silver price. Gold and dollar are inversely correlated. Gold is currently resting on a weekly support level. We don’t know where it will head afterwards or if dollar rally is overextended. Though gold is considered a commodity it usually tends to trend in the other direction of CRB index as its also seen an alternative to paper currencies.

Lets narrow it down , dollar has been in a rally and S&P500 has been on a great run while bond yields rise and price falls as recent business data in China and EU showed mild improvement. Investors rotate out of defensive segments into riskier segments such as S&P500. Gold does better in both deflationary and inflationary times. We’ve often heard investors buying gold to hedge against inflation. I assume we’re in neither of the two but in a disinflationary period where there’s no inflationary pressure - due to falling oil price. What does this all mean for gold ? An alternative to paper currency, a safe haven ? Isn’t there a better place to park your cash than gold given all this ? S&P and dollar index ? Well it isn’t that easy to reach a conclusion on a matter such as this, but we might be able to get a better clue from FOMC meeting and other key datas scheduled next week. EU stress test results are due on Sunday. Market may open with gaps specs speculating on the final outcomes.

I won’t be trading next week as Philip has suggested. Its going to be a one big mess. We’ll see…

And one last thought to ponder on if gold breaks down the weekly support, I wonder how silver will react ? Have they found a bottom or is there more to come ‘decline’ ?

I’ll delve into this more in the coming weeks with more visuals, ratios and such. I think intermarket analysis can be a great support to COT signals. What do you guys think ?

Good weekends guys!

[BBalazs]

Are you going long on silver BB ?

From what I know gold drives the silver price. Gold and dollar are inversely correlated. Gold is currently resting on a weekly support level. We don’t know where it will head afterwards or if dollar rally is overextended. Though gold is considered a commodity it usually tends to trend in the other direction of CRB index as its also seen an alternative to paper currencies.

Lets narrow it down , dollar has been in a rally and S&P500 has been on a great run while bond yields rise and price falls as recent business data in China and EU showed mild improvement. Investors rotate out of defensive segments into riskier segments such as S&P500. Gold does better in both deflationary and inflationary times. We’ve often heard investors buying gold to hedge against inflation. I assume we’re in neither of the two but in a disinflationary period where there’s no inflationary pressure - due to falling oil price. What does this all mean for gold ? An alternative to paper currency, a safe haven ? Isn’t there a better place to park your cash than gold given all this ? S&P and dollar index ? Well it isn’t that easy to reach a conclusion on a matter such as this, but we might be able to get a better clue from FOMC meeting and other key datas scheduled next week. EU stress test results are due on Sunday. Market may open with gaps specs speculating on the final outcomes.

I won’t be trading next week as Philip has suggested. Its going to be a one big mess. We’ll see…

And one last thought to ponder on if gold breaks down the weekly support, I wonder how silver will react ? Have they found a bottom or is there more to come ‘decline’ ?

I’ll delve into this more in the coming weeks with more visuals, ratios and such. I think intermarket analysis can be a great support to COT signals. What do you guys think ?

Good weekends guys!

“We don’t know where it will head afterwards or if dollar rally is overextended.” - If we were to know the future, I probably would type this from my yacht

All I know is Silver usually rallied when COT Index and Willco reached extreme readings

[peterma]

Rookie,

As you say Gold and Silver rise and fall together, only the rate of rise/fall (ratio) differs. In the past year they have fallen together twice. In Mar/Apr/May they fell with Silver falling faster, then June/July that was undone, the important thing to note is that Silver ‘caught up’ the difference, i.e. it rose more than Gold to ‘catch up’.

Same thing earlier this year, same again last year in the opposite direction.

Therefore it is reasonable to estimate that should Gold begin to rise then Silver will not only do likewise but will be the better buy.

http://stockcharts.com/freecharts/perf.php?$SILVER,$GOLD&n=200&O=011000

Like you say if Gold comes into the equation then also the USD, the CRB, including Copper.

The other good news is that is there a sign of ‘support’ on gold, it has made a double bottom on the daily, is this a bounce for real or that of a dead cat?

Hard to tell, I’ll have a look at Gold Miners ETF (GDX)

http://stockcharts.com/freecharts/perf.php?GDX,$GOLD&n=200&O=011000

Good alert BB, though I think if I’m going to buy Silver I’ll wait until I see what the yellow stuff does first.

When it is up then the power of the commercials will help propel Silver to ‘catch up’ the difference.

[ForExchange]

Hi guys,

and here comes the new COT analysis, this weekend for Sweet Crude Oil US. So, I try to use the knowledge from BBs tutorial for 3 purposes: to have a higher quality analysis, to get more efficient and also with practice to get faster in the process. I will attach all my findings with the charts. Keep in mind that I do not have a comment everywhere. To know more about why, read what I say to BB.

Hi BB,

Ok, the first analysis is ready but I need still help. Although I read the COT books, I never analyzed some of the indicators.

I used earlier Net Positions, COT Index, Open Interest and checked sometimes the Movement Index. This means I do not have experience with Willco and CP/OI. It would be good if you checked these charts and write 1-2 sentences what you see from the numbers. I do not really know what is a high or low reading for these two indicators. You can also tell me if you agree with the further statements. I think in the beginning I need a bit help with evaluating until I get really fit.

Further question: The excel charts did not automatically took the data from the newly calculated formulas. These formulas I copied from silver worked perfectly for the numbers and calculations but not for the charts. I had to give all values again for all 6 charts. I do not know if this is normal or do you have a solution? This problem was annoying because if I wanted to change the chart, for every value it jumped back to the original silver chart so I had to click for every single value between the different excel sheets.

I see that we have calculated the Non-Commercial Movement Index but we do not show it in the chart. Is there a reason for it?

Lets see what I did:

Net Positions

Nothing important to mention

COT Index

That is a strange chart. If it is right though then nothing important to be seen. We care about data above 80 and under 20.

Commerical Movement Index

The current value is 8; as far as I know we only look readings above and under 40/-40.

Willco

Waiting what BB has to say.

Ok, as I can only attach 5 pictures, the last two indicators are together:
CP/OI and Open Interest

For the first, again I need BB to say something. OI in continuously decreasing; does low OI suggest a trend reversal?

Conclusion: too many indicators suggest that we will not see any big reversal in the next week.

Hope it was a good first try,
FE

[BBalazs]

@ForExchange

Hi guys,

and here comes the new COT analysis, this weekend for Sweet Crude Oil US. So, I try to use the knowledge from BBs tutorial for 3 purposes: to have a higher quality analysis, to get more efficient and also with practice to get faster in the process. I will attach all my findings with the charts. Keep in mind that I do not have a comment everywhere. To know more about why, read what I say to BB.

Hi BB,

Ok, the first analysis is ready but I need still help. Although I read the COT books, I never analyzed some of the indicators.

I used earlier Net Positions, COT Index, Open Interest and checked sometimes the Movement Index. This means I do not have experience with Willco and CP/OI. It would be good if you checked these charts and write 1-2 sentences what you see from the numbers. I do not really know what is a high or low reading for these two indicators. You can also tell me if you agree with the further statements. I think in the beginning I need a bit help with evaluating until I get really fit.

Further question: The excel charts did not automatically took the data from the newly calculated formulas. These formulas I copied from silver worked perfectly for the numbers and calculations but not for the charts. I had to give all values again for all 6 charts. I do not know if this is normal or do you have a solution? This problem was annoying because if I wanted to change the chart, for every value it jumped back to the original silver chart so I had to click for every single value between the different excel sheets.

I see that we have calculated the Non-Commercial Movement Index but we do not show it in the chart. Is there a reason for it?

Lets see what I did:

Net Positions


Nothing important to mention

COT Index


That is a strange chart. If it is right though then nothing important to be seen. We care about data above 80 and under 20.

Commerical Movement Index


The current value is 8; as far as I know we only look readings above and under 40/-40.

Willco


Waiting what BB has to say.

Ok, as I can only attach 5 pictures, the last two indicators are together:
CP/OI and Open Interest


For the first, again I need BB to say something. OI in continuously decreasing; does low OI suggest a trend reversal?

Conclusion: too many indicators suggest that we will not see any big reversal in the next week.

Hope it was a good first try,
FE

Nice charts, I see you are doing great on your own!

Willco: I see the current value reached 100%. That means that Commercials are more bullish than they were anytime in the last X years (1,5) relative to OI.

It would be nice to have a historical chart with Willco attached to see how responsive this instrument is to extreme readings.

CP/OI: It shows how much (in %) does Commercial entities own of the overall OI (long/short). Current CL/OI is around 47%, which means that the longs of the Commercials are 47%, while the rest is distributed among Funds and Nonreportables.

OI: Decreasing OI = Less contracts. Again, it would be helpful to have a historical chart to see whether the instrument shows tendency to bottom out on low OI readings. Since it is a must for Commercials to be in the markets (hedging), low OI usually means pure Hedger market. Markets usually bottom out on low values, although before I initiate a trade based on that, I’d like to see some evidence. That’s why I’m making the studies.

Unfortunately, Excel is not smart enough to remember complicated charts I usually have to select the data for each chart (except for MI, Willco, CP/OI) again when I refresh the database. But, if you won’t assign dates and axis labels to the chart, you won’t have to struggle through the procedure again.

[ForExchange]

Nice charts, I see you are doing great on your own!

[B]Willco[/B]: I see the current value reached 100%. That means that Commercials are more bullish than they were anytime in the last X years (1,5) relative to OI.

[I]It would be nice to have a historical chart with Willco attached to see how responsive this instrument is to extreme readings.[/I]

[B]CP/OI[/B]: It shows how much (in %) does Commercial entities own of the overall OI (long/short). Current CL/OI is around 47%, which means that the longs of the Commercials are 47%, while the rest is distributed among Funds and Nonreportables.

[B]OI[/B]: Decreasing OI = Less contracts. Again, it would be helpful to have a historical chart to see whether the instrument shows tendency to bottom out on low OI readings. Since it is a must for Commercials to be in the markets (hedging), low OI usually means pure Hedger market. Markets usually bottom out on low values, although before I initiate a trade based on that, I’d like to see some evidence. That’s why I’m making the studies.

Unfortunately, Excel is not smart enough to remember complicated charts I usually have to select the data for each chart (except for MI, Willco, CP/OI) again when I refresh the database. But, if you won’t assign dates and axis labels to the chart, you won’t have to struggle through the procedure again.

Ok thanks!

How still a question on CP/OI. I understood the part you explained, what I do not know what are the exact values we are looking for. Is a 60% high, or a 30% low? I just do not know what this indicator tells.

Off the topic: which broker do you have? I might want to trade gasoline but cannot do it at my broker. So I thought maybe I should open another account somewhere, where I can trade everything.

[Nebula9]

COT data - 21/Oct/14 :44:

The commdolls
AUD, NZD and CAD

Non commercials: Specs have added to their net positions /shorts/ on AUD and CAD except for NZD while reducing their longs across the board. Specs have been net sellers of commdolls for the 3-4th consecutive week.

It looks like the tide has finally turned around for the commdolls specs had been net buyers of commdolls for a whole year almost!. However with the possibility of global slowdown and declining oil prices central banks around the world Fed and BoE to be more specific might hold off from raising rates. Its going to be a tough play for the remainder of the year for paper currencies if things don’t go well for the dollar. And if gold is to rally , Peter has mentioned there was a double bottom forming on daily chart commdolls just might get their chance at another rally with gold leading the other commodites CRB index. We’ll see what happens. It going to be an interesting play

Commercials: Commercials on the other hand have added to their net positions /longs/ across the board while increasing their longs at the same time across the board. They have been net buyers of commdolls for the 4th consecutive week now. AUD up from 0.8768 to 0.8802. CAD up from 1.1193 to 1.1243. NZD up from 0.7849 to 0.794 against dollar respectively.

The majors
GBP and EUR

Non commercials: Specs have added to their net position /shorts/ on both GBP and EUR for the 3-4th consecutive week now. Specs have also decreased their longs on pound.

Commercials: Commercials however have been adding to their net positions /longs/ for the 3rd consecutive week on both euro and pound. They have been net buyers of EUR and GBP for over a month now. EUR went up from 1.2669 to 1.2766, GBP up from 1.6055 to 1.612 against dollar respectively.

The safe havens
JPY and CHF

Non commercials: Specs have added to their net position /shorts/ on franc and reduced their net position /shorts/ on yen by quite a bit while increasing their longs on yen and reducing their franc longs. Its worth noting that specs have been reducing their yen net longs for the 4th consecutive week. The plunge in yen net longs between 14th Oct - 21st Oct was pretty big down from 101,147 to 71,738.

Commercials: Commercials have been selling off the bigger portion of their yen net longs and reduced their net position /longs/ on franc while cutting off their longs at the same time. Franc down to 0.9460 from 0.9556, yen down to 106.903 from 108.1665. Commercials are still net buyers of franc and yen.

Conclusion

AUD - bearish
CAD - bearish
NZD - bearish
EUR - bearish
GBP - neutral to slightly bearish
CHF - bearish
JPY - bearish to slightly neutral

[Nebula9]

Hey guys.
Here’s what happened last week.

CAD: +738--------------------Came back from the last 2 weeks of major weakness. Surprising.
AUD: +552--------------------Coming back from much weakness. ‘Underdog’ made some strides.
USD: +229--------------------Still stronger than most overall. Strongest Major.
GBP: +208--------------------Showed strength.
CHF: -163---------------------Middle of the road.
EUR: -406---------------------Continuing with the weak trend.
JPY : -569---------------------Finally coming down. Safe haven status not happened this week.
NZD: -590---------------------Took a big hit this week. But strongest on Friday. Their either hot or cold.

Comms made +700 pips over Majors.

I think the whole point here is to see what happened, and then look back at the COT report and see if there was any correlations. I remember it being everyone pretty much bearish against the USD. So I guess that could be called true. This week was dominated mostly by the Comms. But USD did dominate on Wed. And is the strongest Major still.
This is only one week. But if I remember, the previous week was the same, all bearish against the USD also.
Wait…I think the GBP was neutral and less bearish also.

Just trying to make some connections. But I guess there will be an edge if you took the USD opportunities, (buying on dips).

Mike

Hey Mike!

I actually liked this one :13:. Think I’m learning to combine all of this what we do in making my decision on which pairs I should trade for the week ahead. Looking at your weekly stats. I’m thinking it might be a good play to go short on AUDUSD, and long on USDCAD. Specs are now net sellers of all commdolls. And AUD, CAD has had their turns while NZD might go in for some correction next week , so does EUR and JPY. But its not as straight forward so to speak, since NZD and AUD go hand in hand especially against USD. I said I won’t be taking any trades. But if I spot some potential setups I just might go in, of course I want to hear out FOMC minutes of meeting, probably not a good idea to go in prior that. What do you think ?

[Nebula9]

Hi [B]Peter,[/B]

If Gold miners ETF was falling gold bottoming on daily support could indeed be a beginning of a rally or a reversal ? I remember Murphy had a paragraph or a whole chapter dedicated to ETFs I only read it once, so I haven’t fully digested everything just yet, I will go over once or twice. If you didn’t bring intermarket analysis and Murphys book into our discussion I wouldn’t have had the chance to delve into this ‘new world’ thank you Peter! Oh and one last thing, do you use free charts on stockschart or do you pay a subscription I was thinking the latter but what do you think ? Is it worth it ? I actually had little to no knowledge about ETFs until I came across Murphys book , and to be honest I thought to myself I had to trade ETFs can’t be missing out on ETFs, from what I understood you can pretty much trade anything with it and I find it to be more of like a flexible and better version of mutual fund. Do you trade ETFs by the way ? I’m thinking of looking more into it…

And [B]BB[/B] I agree with Peter, before I go long on silver I will keep an eye on gold. You might actually have a good trade out of Willco and COT index extremes overlapping, however this could only be a correction rather than a reversal should gold continue to decline. if thats going to be the case you don’t want to hold your silver position long term. The overlapping extremes of Willco and COT index, has it worked on other instruments besides silver? Great study by the BB!. I haven’t done with mine just yet. Well I’ve got a long way. Hopefully by the end of next week I will be done on few instruments, then we can delve into some in depth studies. I’m excited!

Good job [B]FE[/B]! your charts look impressive just like BBs :-)). You might want to look into ETFs , Murphy has introduced few ETF brokers in his book intermarket analysis and there’s a whole chapter dedicated just to ETFs. I also don’t have much to trade with my broker except for currencies, indexes and few commodities.

And one last question for [B]BB[/B] and [B]FE[/B] quote ‘Conclusion: too many indicators suggest that we will not see any big reversal in the next week.’ should this mean we can go along with the current trend ? I haven’t seen an oil chart but we all are aware that oil is in a free fall - OPEC meeting scheduled next month 27th and there’s a rumour oil price could plunge even further and it all depends on Saudi Arabia’s stance on their oil price. Enough justification to short oil ?

[BBalazs]

Ok thanks!

How still a question on CP/OI. I understood the part you explained, what I do not know what are the exact values we are looking for. Is a 60% high, or a 30% low? I just do not know what this indicator tells.

Off the topic: which broker do you have? I might want to trade gasoline but cannot do it at my broker. So I thought maybe I should open another account somewhere, where I can trade everything.

CP/OI: That depends on the instrument. According to Williams, 60% is a good rule of thumb for extreme values.

You can see the importance of historical studies when it comes to COT. Markets are different, therefore our approach should vary.

I’m with DFMarkets for 2 years now. I never had a problem with them. Once, I got stopped out from a position when I set my SL level. I wrote an e-mail to my account manager, they admitted they mistake and put me back into position. Apart from that, everything was fine. They offer a lot of CFDs on Equities, ETFs, Futures, Indices.

[ForExchange]

Hi [B]Peter,[/B]

If Gold miners ETF was falling gold bottoming on daily support could indeed be a beginning of a rally or a reversal ? I remember Murphy had a paragraph or a whole chapter dedicated to ETFs I only read it once, so I haven’t fully digested everything just yet, I will go over once or twice. If you didn’t bring intermarket analysis and Murphys book into our discussion I wouldn’t have had the chance to delve into this ‘new world’ thank you Peter! Oh and one last thing, do you use free charts on stockschart or do you pay a subscription I was thinking the latter but what do you think ? Is it worth it ? I actually had little to no knowledge about ETFs until I came across Murphys book , and to be honest I thought to myself I had to trade ETFs can’t be missing out on ETFs, from what I understood you can pretty much trade anything with it and I find it to be more of like a flexible and better version of mutual fund. Do you trade ETFs by the way ? I’m thinking of looking more into it…

And [B]BB[/B] I agree with Peter, before I go long on silver I will keep an eye on gold. You might actually have a good trade out of Willco and COT index extremes overlapping, however this could only be a correction rather than a reversal should gold continue to decline. if thats going to be the case you don’t want to hold your silver position long term. The overlapping extremes of Willco and COT index, has it worked on other instruments besides silver? Great study by the BB!. I haven’t done with mine just yet. Well I’ve got a long way. Hopefully by the end of next week I will be done on few instruments, then we can delve into some in depth studies. I’m excited!

Good job [B]FE[/B]! your charts look impressive just like BBs :-)). You might want to look into ETFs , Murphy has introduced few ETF brokers in his book intermarket analysis and there’s a whole chapter dedicated just to ETFs. I also don’t have much to trade with my broker except for currencies, indexes and few commodities.

And one last question for [B]BB[/B] and [B]FE[/B] quote ‘Conclusion: too many indicators suggest that we will not see any big reversal in the next week.’ should this mean we can go along with the current trend ? I haven’t seen an oil chart but we all are aware that oil is in a free fall - OPEC meeting scheduled next month 27th and there’s a rumour oil price could plunge even further and it all depends on Saudi Arabia’s stance on their oil price. Enough justification to short oil ?

Hi [B]rookie[/B],

when I read Murphys book, then I can tell you if I want to look into ETFs. (surely I will say: How could I miss this out until now?!). This time will come soon, but not yet. Other tasks are important but the intermarket topic sheduled in. I did not deal with ETF and have no knowledge on it. And because I did not read the book, I also do not know which brokers Murphy suggested. However as far as I know, the book is not new anymore and his intermarket realations are surely great to learn, in the fast changing business environment I do not know how valid his suggestions are about brokers after some years.

About crude: your idea might well be good but I am not confident going short on such levels. Even if we are far away from an extreme yet. On EUR it is similar situation but I dealt more with it and have no problem of going short. Oil is something different, I have to learn commodities better to make such move. I think this boat is gone for me. If I went short on the top or near the top then I would not close my trade now and wait for the extreme. I would not be scared after making huge wins. That would be different.

[B]BB[/B],

thanks for the broker suggestion and talking about the importance of historical charts. As I do not have such indicators in my charting, should I make a print screen about my weekly chart and try to put the indicator under it with another print screen? This looks like not only a lot of work but somehow if the difference between candles in my chart and in the charting platform is not the same then it brings us nothing. How do you combine the price chart with your excel chart? This discussion is interesting as I feel extra strength every day. I make the steps soon to make ready to be able to trade all commodities. Then I will only sit and wait for the right spot to jump in.

Wow boys what a journey we have ahead of us!

FE

[BBalazs]

@rookie39

Hi Peter,

If Gold miners ETF was falling gold bottoming on daily support could indeed be a beginning of a rally or a reversal ? I remember Murphy had a paragraph or a whole chapter dedicated to ETFs I only read it once, so I haven’t fully digested everything just yet, I will go over once or twice. If you didn’t bring intermarket analysis and Murphys book into our discussion I wouldn’t have had the chance to delve into this ‘new world’ thank you Peter! Oh and one last thing, do you use free charts on stockschart or do you pay a subscription I was thinking the latter but what do you think ? Is it worth it ? I actually had little to no knowledge about ETFs until I came across Murphys book , and to be honest I thought to myself I had to trade ETFs can’t be missing out on ETFs, from what I understood you can pretty much trade anything with it and I find it to be more of like a flexible and better version of mutual fund. Do you trade ETFs by the way ? I’m thinking of looking more into it…

And BB I agree with Peter, before I go long on silver I will keep an eye on gold. You might actually have a good trade out of Willco and COT index extremes overlapping, however this could only be a correction rather than a reversal should gold continue to decline. if thats going to be the case you don’t want to hold your silver position long term. The overlapping extremes of Willco and COT index, has it worked on other instruments besides silver? Great study by the BB!. I haven’t done with mine just yet. Well I’ve got a long way. Hopefully by the end of next week I will be done on few instruments, then we can delve into some in depth studies. I’m excited!

Good job FE! your charts look impressive just like BBs :-)). You might want to look into ETFs , Murphy has introduced few ETF brokers in his book intermarket analysis and there’s a whole chapter dedicated just to ETFs. I also don’t have much to trade with my broker except for currencies, indexes and few commodities.

And one last question for BB and FE quote ‘Conclusion: too many indicators suggest that we will not see any big reversal in the next week.’ should this mean we can go along with the current trend ? I haven’t seen an oil chart but we all are aware that oil is in a free fall - OPEC meeting scheduled next month 27th and there’s a rumour oil price could plunge even further and it all depends on Saudi Arabia’s stance on their oil price. Enough justification to short oil ?

I’m not in the long position yet. I still need some evidence from TA to buy Silver. All I’m saying is that we are in a situation, where the current trend might reverse (according to historical studies).

It might be a correction, that’s true. It might not. Time will tell.

[MikeWolski]

Hey guys.
I have something to add. I think it’s important.
I know+ you all are not trading this week (for the most part).
But here is some facts. It’s the end of the month, last week upon us. And we should remember what happens. Big money (specs mostly) are gonna square up accounts. We’ve talked about this, and we always have Peter fill in his knowledge. The last week of the month sort of gets skewed. And I think it mostly involves the extremes of the month coming back around. Peter mentioned this to us.
Well, I have some facts. This is the total pips accrued so far. Is interesting.

JPY: +1073
AUD: +409
NZD: +358
CHF: +149
USD: -29
EUR: -191
CAD: -290
GBP: -1479

The purpose here is to look at HOW strong and weak they are. This is the most notable points I got.

[B]JPY[/B] is (was) really strong. Remember the risk off period? Well, they have come down last week big time. And the week before they just started to come down. But now we see that they can potentially come down so much more.
[B]GBP[/B] is (was) really weak. And just this past week they have started to boost up some. Before that they were on the losing side of it all.
[B]CAD[/B] was losing a whole lot the first few weeks. But just last week they came back from the dead. The question is are they gonna continue?
[B]AUD[/B] has been climbing up since the beginning of the month. They were just behind CAD last week.
[B]USD[/B] has the same story as AUD. This month began as a big drop (correction) and has risen in the last 2 weeks.
[B]NZD[/B] …I don’t know about them. Facts are they started out with proving everybody wrong, that they will tank. That was the first 2 weeks. (remember we all lost a lot with them?) But just last week they FINALLY did drop off. So, it does look like the flow with them is down, (if it will continue).

So guys…that’s what I got. Those are facts. And if we step back and look at the numbers, for end of month play, it looks like GBP to go up, and JPY to go down.

Peter…talk to us, again.

Mike

[ForExchange]

Two questions BB:

1. Did you manage on the weekend to make a Currency Cross Analysis?

2. As Briese and Williams both suggests, we also use in our database 3 years of COT data. You mentioned however that you might extend your database back until 2008 (I think you mentioned this year). Now, if we only use 3 years of data for our of the analysis (for the rest we use 1 year data) then why do you need a database back until 2008?

FE

[peterma]

ETF’s are a ‘window’ to look into the market, they give a view of investors’ actions and sentiment.

Before the advent of ETF’s most investors would have to go to the futures market, now they simply invest in an ETF, as simple for them as buying shares in a company - this is why they have become so popular.

I do not trade them, I use them for analysis. I take the view that investors are usually well informed, and if, for example, I see that they are investing heavily in a gold miners ETF, then I suspect that they believe that the value of gold will rise. That by itself is only a heads up, so then I go digging (for gold:)) to see if there is anything else.

John Murphy’s book on inter-market is relatively new in that it references up to 2012. He doesn’t recommend any brokers, he is associated with Stcckcharts.com and posts there from time to time.

I do not pay any subscription to that site I just use the free charts, they are handy for end of day analysis.

The only site that I have subscribed to in the past was Cotbase, it’s ok for learning, but I’d say you will learn equally as much on this thread.

I do buy the seasonal report from MRCI - it’s useful from time to time, they seem to put a lot of effort into their work, unsurprisingly there is little difference from one year’s report to the next.

That’s the only thing I buy, aside from the odd book here and there, most of which are good for entertainment only.

[PhilipPirrip]

Hey guys.
I have something to add. I think it’s important.
I know+ you all are not trading this week (for the most part).
But here is some facts. It’s the end of the month, last week upon us. And we should remember what happens. Big money (specs mostly) are gonna square up accounts. We’ve talked about this, and we always have Peter fill in his knowledge. The last week of the month sort of gets skewed. And I think it mostly involves the extremes of the month coming back around. Peter mentioned this to us.
Well, I have some facts. This is the total pips accrued so far. Is interesting.

JPY: +1073
AUD: +409
NZD: +358
CHF: +149
USD: -29
EUR: -191
CAD: -290
GBP: -1479

The purpose here is to look at HOW strong and weak they are. This is the most notable points I got.

[B]JPY[/B] is (was) really strong. Remember the risk off period? Well, they have come down last week big time. And the week before they just started to come down. But now we see that they can potentially come down so much more.
[B]GBP[/B] is (was) really weak. And just this past week they have started to boost up some. Before that they were on the losing side of it all.
[B]CAD[/B] was losing a whole lot the first few weeks. But just last week they came back from the dead. The question is are they gonna continue?
[B]AUD[/B] has been climbing up since the beginning of the month. They were just behind CAD last week.
[B]USD[/B] has the same story as AUD. This month began as a big drop (correction) and has risen in the last 2 weeks.
[B]NZD[/B] …I don’t know about them. Facts are they started out with proving everybody wrong, that they will tank. That was the first 2 weeks. (remember we all lost a lot with them?) But just last week they FINALLY did drop off. So, it does look like the flow with them is down, (if it will continue).

So guys…that’s what I got. Those are facts. And if we step back and look at the numbers, for end of month play, it looks like GBP to go up, and JPY to go down.

Peter…talk to us, again.

Mike

I actually like this idea a lot Mike. We can observe together what will happen at the end of this week with the currencies you mentioned. I want to thank you also for reminding us about the end of month fix, I wasn’t going to trade for a completely different reason. Now I’m closing my positions just in case.

One thing you can try to do is back test the idea. Go back to September for example and do your tally. You will have strongest currency and weakest currency, record what you see happen to them at the final week of September. You do it over other months and you will start to see a trend, that trend will be what to expect from the end of month fix.

[peterma]

Hi Guys,

There is an aspect to the market that I don’t think has been discussed here. I fits with Willco insofar that Williams introduces Willco and how he used it to become bearish on Silver when Silver and Gold was reaching new heights during the first Gulf war.

Having shown how Willco set the stage, he needed something else.

There is an old saying about the market open - basically it says that public orders are met during the open, orders that are caused by various media including talking heads. (I will not use the slang that is common, “public money” will suffice).

The thinking is that after those orders are filled the professional money orders take over.

Williams spoke of this many years ago, he figured he could create an index to capture this phenomenon.
He called it ProGo Professional, he used this after Willco set the stage.

His reasoning is that the public see the market in a window of time, usually during the close. Professionals see the market during market hours, right to the close.

A current example of this was the FTSE past week. The headline news on BBC was ‘FTSE falls on Tesco woes’.

The story was correct at time of writing in the London morning. Various UK media had been reporting bad news on Tesco, the market did sell off that morning.

The reality was that the Tesco news passed, the FTSE finished up for the day, up when the professional money orders came into play.

Page 109 on his COT book are the details.