Hi everyone, The latest Commitments of Traders review is out. Rough Rice COT Change (52W) / C – 21%, LS – 14%, SS – 31% / Bearish COT change signal combined with an extreme bearish cot extreme. Eyes on rough Rice. Coffee COT Extreme / C, LS – All Time COT extreme / All time bullish cot extreme in Coffee! Let the chart speak for itselfEuro COT Extreme / LS – All Time COT extreme / LS at a bearish cot extreme (all time) suggesting prices should turn downwards. All the best, Dunstan COT...
Follow the Smart Money / COT Analysis
- #590
- Edited 10:26am May 1, 2018 8:32am | Edited 10:26am
{quote} Thanks Dunstan Could you have more COT set-ups/ Analysis examples for FX market? thanks
NZD:This pair had started ranging back near the end of January. On the 20th of March the Non-Commercials net positioning was within the top 10% of all prior values keying me in to a potential reversal.
I didn't like where where it was in the range at the time so I waited to see if it would reverse. By the time we reached the other side of the range and the supply zone I had denoted as a range from [.73227-.73707] ,both Commercials and Non-Commercials were within 5% of their all time highs.Now coupled with the fact that commercials controlled nearly 40% of the non-spreaded Open Interest, Non-Commercials being 70% long and multiple indices flashing sell signals, I elected to take a short position on the pair.
JPY positioning
#I'd like to preface this by saying that when I mention long and short positions it is in reference to JPYUSD and not USDJPY while uptrends and downtrends in price are in relation to USDJPY unless otherwise stated.#
Since the start of the year up until the end of march, USDJPY has been in a downtrend. If you follow the COT data you may have been expecting this initial move as net positions for both Commercials and Non-commercials were within 5% of all prior extreme positions. As of March 6 the 6M and 3Y indices of net positions provided rather timely yet suspicious indications of movements to the upside. I qualify it as suspicious as JPY reportable positions were still within 10% of prior extreme positions when the first short signal on the 6M Indices were flashed but then followed by a confirmatory massive change in net positions for both reportables in the following weeks.
Now I'd like to bring your attention to the recent increase in Non-Commercial Spreading for JPY.
If you didn't know, spreading is the extent to which each non-commercial trader holds equal long and short futures positions. https://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm
Recently I've been playing around with the data and finally got around to calculating the standard deviations for different variables.
As of the most recent report on May 1st Non-Commercials have moved from the previous weeks' range of 1 to 2 standard deviations above average to 2 to 3 
and while the data likely isn't normally distributed, I don't care as it means more to me that the
amount of hedging being done by Non-Commercials is straying far from average(forgive my arrogance, its been a while since I took stats). As an aside,I would encourage you to look at the excel files I uploaded in one of my previous posts and format NC spreading to show you 1,2 and 3 deviations above average and while you are at it do the same for Open Interest and other groups(I would advise Commercial Longs and Shorts as they are more apt to be correct at extremes), not just for JPY but all pairs and then reply to this thread with what trends and correlations you discover.]
So the question then is , why are Non-Commercials increasing their hedged positions while refraining from committing to a directional bias? 
Do they anticipate a reversal, are they locking in profits,is the Yen's safe haven status coming into play? Regardless I'm still long USDJPY. Currently losing.But still long, anticipating a move to the downside pending further signs of reversal. 
Any thoughts or comments would be greatly appreciated.
#I'd like to preface this by saying that when I mention long and short positions it is in reference to JPYUSD and not USDJPY while uptrends and downtrends in price are in relation to USDJPY unless otherwise stated.#
Since the start of the year up until the end of march, USDJPY has been in a downtrend. If you follow the COT data you may have been expecting this initial move as net positions for both Commercials and Non-commercials were within 5% of all prior extreme positions. As of March 6 the 6M and 3Y indices of net positions provided rather timely yet suspicious indications of movements to the upside. I qualify it as suspicious as JPY reportable positions were still within 10% of prior extreme positions when the first short signal on the 6M Indices were flashed but then followed by a confirmatory massive change in net positions for both reportables in the following weeks.
Now I'd like to bring your attention to the recent increase in Non-Commercial Spreading for JPY.
If you didn't know, spreading is the extent to which each non-commercial trader holds equal long and short futures positions. https://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm
Recently I've been playing around with the data and finally got around to calculating the standard deviations for different variables.
As of the most recent report on May 1st Non-Commercials have moved from the previous weeks' range of 1 to 2 standard deviations above average to 2 to 3
and while the data likely isn't normally distributed, I don't care as it means more to me that the
amount of hedging being done by Non-Commercials is straying far from average(forgive my arrogance, its been a while since I took stats). As an aside,I would encourage you to look at the excel files I uploaded in one of my previous posts and format NC spreading to show you 1,2 and 3 deviations above average and while you are at it do the same for Open Interest and other groups(I would advise Commercial Longs and Shorts as they are more apt to be correct at extremes), not just for JPY but all pairs and then reply to this thread with what trends and correlations you discover.]
So the question then is , why are Non-Commercials increasing their hedged positions while refraining from committing to a directional bias?
Do they anticipate a reversal, are they locking in profits,is the Yen's safe haven status coming into play? Regardless I'm still long USDJPY. Currently losing.But still long, anticipating a move to the downside pending further signs of reversal.
Any thoughts or comments would be greatly appreciated.
USDCHF: Short
Reasoning:
-Open Interest is high. Very high for this contract [CHF/USD].
-Net positions reaching extremes. Commercials within top 5% of all prior positions at 56528 net long and Non-Commercials within the bottom 10% of all previous at -32943.
-Commercial net positions are nearly 60% of total Open Interest minus hedged NC positions(miniscule).
-NC 70% short (30% Long) CHF/USD meaning that they are nearing saturation on the short side if they aren't there already. 
Thoughts and comments would be greatly appreciated.
Reasoning:
-Open Interest is high. Very high for this contract [CHF/USD].
-Net positions reaching extremes. Commercials within top 5% of all prior positions at 56528 net long and Non-Commercials within the bottom 10% of all previous at -32943.
-Commercial net positions are nearly 60% of total Open Interest minus hedged NC positions(miniscule).
-NC 70% short (30% Long) CHF/USD meaning that they are nearing saturation on the short side if they aren't there already.
Thoughts and comments would be greatly appreciated.
