COT Report Analysis - a thread on market sentiment

Trading Discussion News and Economy
3154

Nice work Mike, always good to hear thinking out loud.

Re CHF, lots of guys afraid of it, myself included. Bad enough when there is overt CB intervention, but when it is covert then that makes for an extra risk.

It is interesting that you have highlighted something that has been bothering on FX - the Euro.

In the past when analysts have written it down it somehow rebounds like the mythical phoenix, always rising from the ashes.

It’s back there again, getting written down, so is there is a light, even a glimmer of a phoenix.

Hmmm… a news article on Thursday has already been relegated on most sites.
Note the floor set on interest rates by proxy, on the second last paragraph.

(btw even the BBC have already relegated this story, it has to be searched for).

BBC News - ECB raises eurozone growth forecast to 1.5% for 2015

3155

Last time I mentioned high volume at the open, well I wonder about high volume at the close.

I highlighted the volume thinking re institutional selling into a rising price (bar).

Well today we had the opposite effect on SPY. On the close at the weekend volume was high, note on this hourly that for the last 3 hours price was falling with rising volume.

Some guys read this a bearish, it’s not, the rising volume is reflecting buy orders, the confirmation is the last hour bar - it closed close to it’s open with a volume spike .

VSA stands for volume spread analysis, meaning an analysis of volume with the spread (range) in the associated price. (I should point out that vsa per se doesn’t look at the open of a price bar.)

Anyways, that spike at the close suggested some buying to come on Monday on the S&P

3156

Hey Team
Monday’s results.
GBP: +890///+5.23
CAD: +61 ///+1.16
EUR: +154///+.89
USD: +45/// +.79
CHF: -76 ///-.05
NZD: -298///-1.6
AUD: -303///-2.01
JPY : -516///-3.96

Majors on top +2.45%

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Mike

3157

Good morning guys.

Well, I just had to jump in here. It’s approximately 0849 GMT now. And I [B]HOPE[/B] you are getting some of the USD. It is just going through the roof.
Good things come to those who wait. And I waited out yesterday’s correction with the Dollar. (Got in with them at the open, to the EUR) And this morning I got in with some USD/CAD also.

Talk to me.

Mike

3158

Good for you Mike. I’m long dollar against CAD, AUD EUR and silver so yeah I’m enjoying it.

3159

FE how is your SPX 500 going? Great call buddy.

3160

Hi Philip,

thanks. The thing is I am very sick, did not even look at the thread in the last 2-3 days I believe. I will read it all tomorrow. For this reason I closed the trade yesterday. I could not follow my trade anymore and also not think rationally. So I made a win, but it could have been larger.

No problem, I trade few setups lately but they all hit. I am quite confident, the next setup will come around the corner again. When I see it coming close we will discuss it and make money :slight_smile:

I only checked emails lately so I am also a bit behind with market action but as I said either tomorrow or on Thursday I hope I can catch up.

All the best,

FE

3161

Hey guys.
Tuesday’s results.

JPY : +743///+6.38
USD: +327///+3.74
GBP: +371///+2.55
CAD: +18 ///+.41
AUD: -90 ///-.84
NZD: -180///-1.71
CHF: -541///-5.05
EUR: -494///-5.48

Majors took it again. +2.14%

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Hope you get to feeling better FE!! Soon!!

Mike

3162

Well guys, not much point in looking at the technicals on the USDX, it’s heading to the moon it seems.

It’s up that high that most of the mt4’s cannot go back far enough.

So not trading this particular thought, but I def want to learn from it.

If it happens that retail sales are below expectation, with the IMF looking to stop the slide on Euro, could there be a voice in the wilderness calling the top on USD ?

Remember - a learning exercise only - retail sales - exports and crucially imports down big time. Consumer confidence down - so lets see if that equates to less spending.

3163

Hi Peter,

I checked the charts now to see what you meant. Actually, on many USD pairs there is still plenty of place to go from a technical point of you.

What got my attention in your post was “the IMF looking to stop the slide on Euro”. That got my attention. Why would the IMF step in and do something like that? Why is it important for them?

Take care,
FE

3164

Hi FE,

In today’s business world very few like extremes - many companies will not have planned for extremes - headlines like 12 year low are not something that would have been foreseen 12 months ago.

This is especially true for ‘global’ companies - check out what Lagarde said today in the second last paragraph, this thinking causes the last paragraph comment.

IMF’s Lagarde sees monetary policy risks | Reuters

The BIS warned back in early Dec of risks to Emerging Economies in particular, aside from USD borrowings there is an increased risk of capital flowing from these markets to the US.

Non-financial corporations from emerging market economies and capital flows

ECB has been encouraged with the Euro slide, 12 year low on USD, 7year low on GBP - but sometimes a trend can take on it’s own momentum, there will soon come a time that US exporters will begin to hurt some more.

The IMF will not have US exporters as a major concern, but the FED just might - see the falling export numbers:

3165

I do accounting for two clients whose A/Rs have have already been feeling pain from dollar strength against the CAD, AUD, and EUR. While they are bummed, they have international competitors that are happy.

-Adrian

PS. Yes there are businesses that are in such bad shape as to not only let me into the building but to allow me to get involved with their financial accounting. Cheers.

3166

Yeah, on the crosses there is plenty of TA space, but often when looking at the USD it was good practice to have a look at the USDX technical which many time would have given some guidance, especially on a shorter term perspective - but not much use nowadays:

Monthly USDX going back to 01 Sep 2005.

3167

Wednesday’s results.

NZD: +765///+6.16
USD: +411///+3.68
JPY : +322///+2.22
AUD: +154///+.70
CAD: +111///+.56
GBP: -488///-2.0
CHF: -360///-4.02
EUR: -915///-7.3

Comms up by 7.42%

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Mike

3168

My NZD longs say they like your stats. I guess it has to do something with the Statement from yesterday, I am not aware of the content just yet.

FE

3169

I have been using those 2 indicators on retail sales for a couple of years, it’s surprising how accurate they can be.

3170

Hi technical department,

I went long on S&P at 2053. Ideas? Is it a retracement or is it heading up? Reasons for and against it? My singals told me clearly up, but after I entered it I am keen to listen what others have to say.

Peter, I was not even surprised that you got the Retail Sales right. I will react strong on something when you get it finally wrong :slight_smile:

FE

3171

Hi FE,

Nah, it was the learning aspect that I felt was important - I had to do that before the action rather than the usual stuff after the fact.

You see, if little me, sitting behind a computer, could see that there was a strong likelihood of a miss, then I was wondering about the “expected” number when I saw it.

Imagine doing it by the mantra that we are all taught, the book - first home from work, rule 1 - check the upcoming calendar - aha! retail sales up tomorrow at the open … hmmm I must trade the USD, ok will set my order.

Homework - first fundamental, US economy going from strength to strength, everyone says so, the USDX heading for the moon, hmmm, the numbers tomorrow MUST be good, I’ll go long USD.

OK- it’s Fibre, (Eur/Usd) where is it at now, brilliant! it has backed off from a low spike of 1.0512 - aha! it’s so clear.

I’ll set a sell on the break of the spike or maybe a little safer, break of the round number, that’ll happen when the good numbers come out - so sell at 1.0498, that should do it.

Stop? - would I really need one, yeah, the book says so, do it right, above the last swing high - it’ll never go above 1.0630 - I mean that’s 130 pips, has to be safe.

The S&P long - looks like those guys are thinking a little like the voice in the wilderness too, is there really a rate hike coming up?

3172

There is another little voice that is slightly troubling, I mentioned imports - chart below, but also look at business confidence - what’s up Doc?

3173

Hi Peter,

sometimes I really feel like you have fun with us and you make millions in the background!

So I still wait on your opinion what is your outlook on S&P. I went long clearly only based on technicals. No single thought about an early or late rate hike expectations. No reports or EPS forecasts :slight_smile:

I have the feeling that you are getting ready for long-term USD shorting. Maybe EUR/USD?

Take care,

FE