Latest CFTC Release Dated January 08, 2008:
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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]Explanation of Charts (in order from top to bottom):[/B]
[B]Commercial % Long:[/B] # COMMERCIAL LONG CONTRACTS / (TOTAL # COMMERCIAL CONTRACTS) and measured with a 52 week percentile…commercials are very long at the bottom and very short at the top
[B]Speculative % Long:[/B] # SPECULATIVE LONG CONTRACTS / (TOTAL # SPECULATIVE CONTRACTS) and measured with a 52 week percentile …speculators are very long at the top and very short at the bottom
[B]52 Week COT Index:[/B] see description just below the COT Index table
[B]13 Week COT Index:[/B] see description just below the COT Index table
US Dollar Index: The % of total commercial positions that are long measured through a 52 week percentile is at 14 and the % of total speculative positions that are long measured through a 52 week percentile is at 82. The 52 week COT index has rolled over from 100 and is at 84. Given that positioning has turned from a bullish extreme, expect the USD to decline.
Signal: Bearish
EUR: The % of total commercial positions that are long measured through a 52 week percentile is at 67 and the % of total speculative positions that are long measured through a 52 week percentile is at 12. The 52 and 13 week COT indexes have turned up from 0 (bearish extreme) and are now bullish.
Signal: Bullish
GBP: The % of total commercial positions that are long measured through a 52 week percentile is at 94 and the % of total speculative positions that are long measured through a 52 week percentile is at 4. Cable is at a bearish sentiment extreme and should bottom very soon (maybe this week).
Signal: Forming a bottom
CHF: The % of total commercial positions that are long measured through a 52 week percentile is at 12 and the % of total speculative positions that are long measured through a 52 week percentile is 88. CHF buying has accelerated recently and a bullish extreme has yet to be registered so continue to favor CHF strength.
Signal: Bullish
JPY: The % of total commercial positions that are long measured through a 52 week percentile is at 8 and the % of total speculative positions that are long measured through a 52 week percentile is at 96. The 52 week COT index is also at 96, indicating that a bullish sentiment extreme has been registered. After reaching a bullish sentiment extreme, favor the downside.
Signal: Bearish
CAD: The % of total commercial positions that are long measured through a 52 week percentile is at 61 and the % of total speculative positions that are long measured through a 52 week percentile is at 29. The 52 week measure is trending down, indicating that the larger trend is down but the 13 week index is at 0, so be careful of a CAD rally near term.
Signal: Bearish
AUD: The % of total commercial positions that are long measured through a 52 week percentile is at 59 and the % of total speculative positions that are long measured through a 52 week percentile is at 14. The 52 and 13 week COT indices are at 24 and 50. All indicators have turned up from close to extremes, so favor the upside.
Signal: Bullish
NZD: The % of total commercial positions that are long measured through a 52 week percentile is at 18 and the % of total speculative positions that are long measured through a 52 week percentile is at 61. The 52 and 13 week COT indices are at 55 and 92. COT information warrants a cautious bullish stance since the indices are trending up.
Signal: Bullish