Gold went up, so now AUD is going up. Gold is going down, AUD will soon follow.
BB can you please say what is with Copper?
Thanks
I wish it was in my hands, but again I have nothing new from my report this week.
The trend remains. Dollar strength, all other currencies down. Stock markets up and commodities down.
COT report for currency futures - 28 Oct 2014
Hope youâre all having a great weekend! :44:
The commdolls
AUD, NZD and CAD
Non commercials: Specs have added to their NZD and AUD net shorts for the 2nd and 4th consecutive week but reduced their CAD net shorts by 129. Specs still remain net sellers of commdolls since they changed their net position from positive to negative since 4 weeks ago. Current commdolls net shorts are far from all time extremes.
Commercials: Commercials bought more NZD and sold some of their AUD and CAD net longs last week. Commercials still remain net buyers of commdolls. AUD up from 0.8802 to 0.8817, CAD up from 1.1243 to 1.26, NZD up from 0.794 to 0.7941 respectively against dollar.
The majors
EUR and GBP
Non commercials: Specs have added to their EUR and GBP net shorts for the 5th and 4th consecutive weeks. EUR net shorts currently standing at 165,707, and GBP at -6,247 both far from all time extremes.
Commercials: Commercials bought more EUR and sold some their pound net longs while reducing their long positions. Commercials still remain net buyers of GBP and EUR. GBP went up to 1.615 from 1.612, EUR down to 1.276 from 1.2766 respectively against dollar.
The safe havens
JPY and CHF
Non commercials: Specs have reduced their JPY net shorts last week, and they have steadily decreasing their yen shorts for the 5th consecutive week. But had added to their CHF net shorts for the 4th consecutive week. Specs still remain net sellers of yen and franc. Specs yen net short is far from all time extremes. Franc net short is currently standing at 20,283 and all time net short extreme is 33,301.
Commercials: Commercials bought more franc and sold some of their yen net longs last week. They still remain net buyers of CHF and JPY. CHF down to 0.9453 from 0.9460, JPY up to 107.19 from 106.903 respectively against dollar.
Conclusion
AUD - bearish
NZD - bearish
CAD - bearish
EUR - bearish
GBP - bearish
CHF - bearish
JPY - bearish
[B]Last weeks running total///Months end total
JPY : +1073///AUD : +1199
AUD: +409////USD : +942
NZD: +358////CAD : +431
CHF: +149////NZD : +318
USD: -29//////CHF : +152
EUR: -191/////EUR : -509
CAD: -290/////GBP : -1130
GBP: -1479////JPY : -1403[/B]
I have been liking the way you present your stats lately Mike. I specially like this comparison. I think this one alone tells a lot and again couild be used as confirmation.
My conclusion is GBP , EUR and CHF remained pretty much at the bottom comparing the two last weeks and month end total while commdolls along with USD managed to climb back up. Looking back youâve spotted the same scenario in your Sept stats. I think much of its due to EUR weakness and now its dragging down GBP. Where else do we see strength ? USD absolutely, and commdolls just donât give up donât they ? They were very resilient even against dollar when dollar was dominating back few weeks ago. But when you think about inverse relationship between CRB and Dollar index it is kind of contradicting. But intermarket analysis is again not always black and white. And thereâs always an explanation.
What FE said was true, while commodity is falling now along with gold breaking down major support its interesting to see how commdolls have managed to stay resiliient still. I think first off, they have been doing reasonably well even during economic downturns and still are even amid commodity fall. And then thereâs interest rate differentials. On top of what I have just wrote above I think its a good enough reason for investors to rely towards commdolls more or so than the dollar as they could be skeptic and wary of dollar strenght for whatever reason that it may be but Iâm sure its fundamental. In any case by now I think weâve had enough experience to conclude that even if commdolls were to head for a downturn it will be slow and steady unlike EUR and JPY.
Youâve almost convinced me on silver BB. Great analysis. Do you have 200SMA plotted on your chart ? If thats 200SMA I see that price is still well below it could just be a correction until price breaks above 200SMA. Still its a nice long way up, money to be made.
Price action and everything else speaks for a bullish sign , Iâm wondering if its just a correction or a complete reversal. I however still doubt that its the latter. Should it be then I expect gold ETF to rise followed up with gold futures rise before silver reversal. Please post your silver findings as I will be keeping a close eye on silver to put this theory into practice.
Thatâs a 89 SMA. I noticed it works relatively good on the Weekly chart as a trend indicator. Iâd stick with the correction if I had to choose 
Copper
COT Index
The index retreated to more modest readings from the previous extremes.
Open Interest
That is an interesting situation we got here. Price is dropping, while Open Interest is increasing. Commercials are adding to their longs as well as to their short positions.
Longs - 53% -> 53%
Shorts - 31% -> 35%
CP/OI Index (Willco)
The indicator just left the extreme zone.
Looking at the chart, I canât say that Iâm particularly bullish. Iâm watching 2 areas as a possible long zone, the $290.00 level and the descending support line on the Weekly chart.
Hi BB,
I did not want to post anything today, only read. Still, something got my attention so I wanted to clear it. Why do you say by OI that price is dropping and OI is increasing? I do not see it that way. I think they were both rising.
Price was only falling in the last 3 days which is not included in the report. This means in the next report we will be most likely heading again to the extreme levels because price is falling and commercials will be buying.
I agree with you entry points.
FE
Thank you BBalazs, that makes sense.
Matthew
I mean the big picture. Price has been dropping from $325.00 Actually, OI has dropped this week.
S&P 500 Consolidated COT analysis
As I promised, hereâs the analysis of the S&P 500 Consolidated. Consolidated means that the report includes the S&P 500 and E-Mini S&P 500
Net Positions
I find this chart particularly interesting.
Notice how bullish the Commercials are, despite the fact that prices were rallying.
COT Index
It tells us very little. Because we are using 3 years look-back period, the indicator has no chance to reach extreme readings.
In times like this, we have to be a little flexible. I have marked with purple the zone I consider extreme.
Open Interest
I donât have a chart attached because of the whipsaw effect.
CP/OI
Longs & shorts are being added.
CP/OI Index (Willco)
The indicator screams âBUY!â.
Conclusion: To be honest, Iâm suspicious about this market. I certainly would not hold it for long-term. It is fascinating to see the capitulation of the Commercials. According to Steve Briese, this phenomenon is extremely rare. On top of that, have you looked at the âJaws of Deathâ, that is evident on the chart of Bonds and S&P 500?
As you may be well aware, Bond prices lead the S&P 500. Bonds are falling, while S&P 500 rising. Seems like a terrific sell opportunity is just around the corner. :35:
Now that I review my post, Iâm not sure that we are looking at bond prices. It might be bond yields. A question: What are we looking at? TradingView does not clarify it unfortunately.
TYX is treasury yields. So prices of bonds are going up with S&P which is the normal.
Yep, thatâs what I thought. Thanks for the heads-up I leave the post unedited to make sure nobody falls into the same trap.
Hereâs a program I found. It lets you to download data from yahoo finance on any instrument into an excel sheet. Some of you might find it interesting: Importing Historical Stock Prices from Yahoo into Excel
Hi guys,
Did someone take a look at the RUB? I thought to make a COT analysis however, without the analysis it looks like already a very extreme situation. The USD/RUB gives an incredible carry trade for shorting at, if we get it right, it would be really amazing! Of course I do not want to short now, would look like suicide, however when we do it the right time, then it can be very very rewarding for a swing trade.
FE
Often when price is making all time lows or highs our natural instinct is to fade, thatâs how we are wired.
Some years ago in Monte Carlo, a run was made on black, it came out over 25 times in a row.
So the assembled crowd faded the move, they bet heavily on Red, they reasoned that red was âdueâ.
Of course they lost, it became known as the âMonte Carlo Fallacyâ.
We do the same all the time, you will see -âbuy low, sell highâ as being the secret of success in the market.
Earlier this year, when GBP/USD was around 6500 I saw a trader sell, his words were âwell what goes up mustâŚâ
So it is with the current S&P, it feels as if it is âoverboughtâ or âoverextendedâ, which it may well be. It is in such circumstances that we utilize all means to look for any pull backs. I was very keen to watch the index this incoming week to see if it followed the Transports to a new high, failure and I would have been looking for red, as it is all sectors have made the new high.
So then I think what advice does the investor now receive, will he be encouraged to buy and invest or will he be nervous.
Sometimes itâs helpful to view the market as trying to second guess the guy with the money, the investor, will do.
(Lol, the S&P will probably fall 1000 tics tomorrow morning)
I actually did. There is no signal to buy Ruble yet. 6 months COT index is 100. 6 months Willco is at 93.16
As I said there is no buy signal.
I remember Mike shared a good article months back about the mystery man who moves the Japanese market; a day traded who traded I think $20,000 to millions and millions. His advice was to buy when people are buying and sell when people are selling. It resonated when you discussed the Monte Carlo fallacy.
Yeah, cannot remember the trader, but I suspect it was Wyckoff, anyways the trader was an apprentice, learning from one of the older guys.
Price was going higher and higher, the apprentice could see his master still buying - when will you stop he asked.
âWhen it reaches the moonâ was the reply.
Most of the old traders apply this philosophy, ask Williams about buying low and heâll scream.
It happens that if you google the Monte Carlo Fallacy, up comes⌠weâll not go there Philip, itâll open up a giant debate about gambling