Latest CFTC Release Dated April 8, 2008:
Discuss Trader Sentiment and Positioning at the DailyFX Forum
The COT Index is the percentile of the difference between net speculative positioning and net commercial positioning measured over the last 52 weeks. A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming. The readings are for the actual currency, not the currency pair. For example, a reading of 100 on the Canadian Dollar suggests that the Canadian Dollar is close to a top (USDCAD close to a bottom).
Readings of 95 and higher as well as 5 and lower are in boldfaced red type to indicate potential market extremes. The last 4 weeks of the COT Index are shown because it is just as important to know where the index is coming from. For example, an increasing index is bullish until the index is extreme (near 100), at which time the risk of a reversal or pause in the trend increases
[B]US Dollar Index: [/B][B]The 52 week COT index is at 80, indicating that plenty more selling is possible. However, the 13 week index has bounced from 0, which introduces the possibility that sentiment towards the USD has turned from a bearish extreme and that the USD will rally further from its low. The composite COT is increasing too, which is USD bullish.[/B]
[B] [/B]
[B]Implications: [/B][B]forming a bottom[/B]
[B]EUR: [/B][B]The 52 and 13 week indexes are at 12 and 50. Similar to the USD (but inverse) the 52 week index suggests that the larger bullish trend could continue. However, the 13 week index has rolled over from elevated levls (83), which is bearish. The composite COT is declining (not a surprise since the USD composite COT is increasing), which favors Euro weakness.[/B]
[B][/B]
[B]Implications: [/B][B]forming a top[/B]
[B]GBP[/B]: The 52 and 13 week indexes are low, at 4 and 17. This, combined with the fact that the decline from 2.0396 is choppy, favors the idea that the GBP is forming some sort of a low. How significant this low ends up being remains to be seen of course. [B] [/B]
[B]Implications: [/B][B]Bullish[/B]
[B]CHF:[/B] [B]The 52 and 13 week COT indexes are at 57 and 8 after rolling over from near exteme levels. This indicates that sentiment has turned from a bullish extreme. The CHF is expected to underperform over the next few weeks. [/B]
[B]Implications: [/B][B]Bearish[/B]
[B]JPY: [/B] [B]The 52 and 13 week COT indexes are at 82 and 25 after rolling over from extreme levels. This favors a continued correction in the Yen (rising Yen crosses) for a few more weeks.[/B]
[B][/B]
[B]Implications: [/B][B]Bearish[/B]
[B]CAD: [/B][B]The 52 and 13 week COT indexes are at 8 and 25 after being at 4 and 0 last week. Readings this low warn of a bearish sentiment extreme. As such, the CAD is expected to outperform over the next few weeks. [/B][B][/B]
[B]Implications: [/B][B]Bullish[/B]
[B]AUD:[/B] [B]The 52 and 13 week COT indexes are at 71 and 92. The sharp increase in Aussie longs may be the beginning of the a bull leg that leads to a major reversal within a few weeks.[/B]
[B][/B]
[B]Implications: [/B][B]Bullish but forming a top[/B]
[B]NZD:[/B] [B]The 52 and 13 week COT indexes are at 10 and 8 after being at 8 and 0 the week before. Similar to the CAD, readings this low are suggestive of a bearish sentiment extreme. Look for opportunities to buy the NZD as it should outperform in the coming weeks.[/B]
[B][/B]
[B][/B]
[B]Implications: [/B][B]Bullish[/B]
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