US Dollar up nicely today, here's the UUP chart, wedge pattern.
I have UUP breaking out of the wedge and then pulling back to
either make a higher low or lower low, then rallying, we'll
see.
Otherwise today near the close the new COT data will be
released, I'm really interested to see if the Commercial traders
have added to their 'net long' dollar position, as you know last
week they doubled from 7K to 14K contracts. This data is
released about 3:30 EST
you need to click on the current date and
then subtract the commercial long and short positions on
the US Dollar. Us ONLY the commercial data, not the combined
large Option with commercial data
The interesting ones are the likes of Gold & Silver which
have speculators net long whereas the Commercial guys are quite
heavily short. I continue to be short Silver here. Its way
overbought. No reason to sell but I have strategies saying sell,
charts with divergence. Even my wife is telling me to go long
Silver so it must be time to short
Posted by lessarda on 26th of Mar 2011 at 03:36 pm
Commercials, especially producers, hedge against cash positions
in the physicals or against forex risk in their business or
market risk in their investments, so they will always be more
or less opposite the trend of price. They tend to get extreme in
their net short or long positions near price peaks and
troughs, so they are good at warning of reversals when they get
extreme.
Speculators/funds follow the price trends and
typically provide the marginal fuel for
rallies/corrections. So a very interesting move is when the funds
start fading rallies, like they did in copper, gold & silver,
for example, in the past few months. It can signal distribution
before a lasting reversal, but it can also end up marking
consolidation in the market, as in silver from 9/10 to 1/11, when
they began ramping up longs again. Right now they are fading
silver's rise, but not sharply.
The funds have sold into Gold in a pretty big way since
9/10. I don't see any precedent in the data for such a big fade.
Price has certainly not followed them yet, which shows how strong
the buying has been. So it's either a huge distribution and a sharp
decline is coming or they will have to come back in and that would
likely drive up gold sharply.
With the US$, the funds are still following price down, but they
tend to turn around ahead of the dollar (see 9/07, 9/08, 10/09,
2/10). Also, while they are at the biggest net short level since
11/07, it is not an extreme as in 8/07 & 10/07. So while the
dollar can bounce here, the funds aren't signaling a big move
yet.
US Dollar
Posted by matt on 25th of Mar 2011 at 01:17 pm
UUP chart
US Dollar up nicely today, here's the UUP chart, wedge pattern. I have UUP breaking out of the wedge and then pulling back to either make a higher low or lower low, then rallying, we'll see.
Otherwise today near the close the new COT data will be released, I'm really interested to see if the Commercial traders have added to their 'net long' dollar position, as you know last week they doubled from 7K to 14K contracts. This data is released about 3:30 EST
here's the URL/site that I use.
http://news.goldseek.com/COT/
you need to click on the current date and then subtract the commercial long and short positions on the US Dollar. Us ONLY the commercial data, not the combined large Option with commercial data
Matt, What is this week´s COT
Posted by dpack on 27th of Mar 2011 at 04:37 pm
Matt,
What is this week´s COT saying to you on regards the USDX?
TNX
You can find chart of
Posted by steveo on 27th of Mar 2011 at 11:45 pm
You can find chart of the COT, feel free to use this resource
It is under Index futures, not currencies as you might think.
Click on Futures and COT summary Graphs
BTW this is bullish on USD
http://oahutrading.blogspot.com/p/investment-link-storage-page.html
about the same WoW at
Posted by vimal on 26th of Mar 2011 at 07:31 am
about the same WoW at 13.5k contracts net long
The interesting ones are the likes of Gold & Silver which have speculators net long whereas the Commercial guys are quite heavily short. I continue to be short Silver here. Its way overbought. No reason to sell but I have strategies saying sell, charts with divergence. Even my wife is telling me to go long Silver so it must be time to short
Hedging vs speculating
Posted by lessarda on 26th of Mar 2011 at 03:36 pm
Commercials, especially producers, hedge against cash positions in the physicals or against forex risk in their business or market risk in their investments, so they will always be more or less opposite the trend of price. They tend to get extreme in their net short or long positions near price peaks and troughs, so they are good at warning of reversals when they get extreme.
Speculators/funds follow the price trends and typically provide the marginal fuel for rallies/corrections. So a very interesting move is when the funds start fading rallies, like they did in copper, gold & silver, for example, in the past few months. It can signal distribution before a lasting reversal, but it can also end up marking consolidation in the market, as in silver from 9/10 to 1/11, when they began ramping up longs again. Right now they are fading silver's rise, but not sharply.
The funds have sold into Gold in a pretty big way since 9/10. I don't see any precedent in the data for such a big fade. Price has certainly not followed them yet, which shows how strong the buying has been. So it's either a huge distribution and a sharp decline is coming or they will have to come back in and that would likely drive up gold sharply.
With the US$, the funds are still following price down, but they tend to turn around ahead of the dollar (see 9/07, 9/08, 10/09, 2/10). Also, while they are at the biggest net short level since 11/07, it is not an extreme as in 8/07 & 10/07. So while the dollar can bounce here, the funds aren't signaling a big move yet.
thank you lessarda
Posted by law6 on 26th of Mar 2011 at 03:39 pm
looking at silver on first look?
Posted by law6 on 26th of Mar 2011 at 03:50 pm
do you need to go back further to gage their positions?
they looked neutral on friday
although saw someone come in and cover silver short in comex
just relearning how to read these chart
Please post COT data, Matt. TNX
Posted by dpack on 25th of Mar 2011 at 01:19 pm
Please post COT data, Matt.
TNX
sorry. Did not see above.
Posted by dpack on 25th of Mar 2011 at 04:33 pm
sorry. Did not see above. Have a good WE