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.
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.
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.
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 ?
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 ?
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.
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.
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).
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.
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.
Did you manage on the weekend to make a Currency Cross Analysis?
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?
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.
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.
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.
Last week, I examined how accurate were Commercials picking tops and bottoms in Silver with the help of Willco.
If you saw the study, you probably came to the same conclusion as I did. Commercial entities were right on the money most of the time. It is important to keep in mind, that they are usually early arrivals to the party.
This week, my victim is the chart of Gold from 2000 to 2013.
It takes no trained eyes to see, Hedgers did a great job picking bottoms in the roaring uptrend. Unfortunately, they were not as reliable with the tops.
All in all, I count 5 instances when they were just dead wrong (black circles).
Out of curiosity, I attached the chart of Open Interest.
Seems like the market is a better buy (sell) when the OI is low (high).
Now, the three indicators together.
Conclusion: Gold is quite responsive to Willco (especially in the direction of the dominant trend).
Next, I will investigate the relationship between Gold and the S&P 500 using the COT report.
Guys, I need some help. I want to create the WillSpread Indicator, but I’m having a hard time understanding the method. (Williams’ book, page 171).
[I]“Let’s start by looking at the relationship between gold and the dollar index, specifically the U.S. dollar. What seems to be going on is that gold can rally only so far above the U.S. dollar before it takes a tumble. It is difficult to see this relationship by looking at charts, but it is quite easy to see when you look at the spread relationship between these markets. The relationship that I like to look at is arrived at by taking the spread between these two markets, on a weekly basis, then compiling a 3-week moving average of the spread and a 21-week moving average of the spread. In order to see the “push-pull” of the spread, I then subtract the 3-week moving average from the 21-week moving average. Dividing that answer by 100 results in a uniform ratio; thus all points in time can be looked at on a consistent scale.”[/I]
So, from what I understand, we need the chart of $ (index?) and Gold. We then calculate the spread (formula below).
After that, we create a 3 and 21 weeks MA of the spreads.
Then we substract the 3 week MA (spread) from the 21 MA and divide the result by 100. That should leave us with a scale (if we plot them on a chart).
If anybody has some experience in spread calculation or understands the formula better than I do, please help me out In the meantime, I’ll try out my version and see what can I dig up.
I wrote once an email that we post every single thing that is in our mind and that no one can follow anymore what is going on in the thread because of the huge number of posts. Then I have also written that our posts has nothing to do with the purpose of the thread. Now I have to post again.
I know everyone is doing the tutorial, but still, the “strict but easy going attitude” has changed a bit. Everyone does work in the background but probably got scared of posting. Well, I tell you what. I like that it is a bit calm so I can catch up with all my work because if we post too much, we will only get there slowly. However if everyone is depressed and no posts are coming at all then [I]we will never get there[/I]. So do your work, also on topic, but some fun still has to be there.
You only have one trial! No matter that it is a game, experience matters so I am only interested for the first trial! I made [B]51[/B]. I made a hole in one on the tenth, and I was probably celebrating too much, because for some reason I just got a penalty on eleventh, before even I have started it… Thirteenth was my drawdown with a score of 7 (including 3 penalties).
So lets see who is the online Tiger Woods and I want to see from all of you the results within 24 hours!
I also do not understand the explanation but I thought to do a little research for you so maybe I can find how to create it. Unfortunately google only has definitions or MT4 indicator links.
So I went to Williams’ site. Of course he does not make the tutorial to show it how to create it, but there is also only WillGo.
There is of course also no explanation but if you try to make the same chart with learning by doing, you can always check if your indicator looks the same and once you get the same result then you have it
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.
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…
