COT: The precious data ignored

USDCAD shorts in the process


USDCAD shows a potential of big sell coming.

COT confirms CAD shorts are decreasing quickly.

Bullish on GBP


H4 chart above

Weekly and daily are amazingly bullish. Just a matter of time before dollar fall off the cliff

#coffee trading

s&p holding longs

CAC trading

JPY bottom (temporary or not) ?

S&P500

S&P shorts, time to get worried?


This chart above represent the VIX short related to SP500. As you can see everytime the dealers increase their short VIX, S&P rises.
I'm not saying we'll see a huge rise but a few things to consider :
- Indexes are most likely bound to rise historically. Any fall is a good opportunity to load longs for the long run.
- With VIX short that high, its not the right timing to jump into the short train. If you are short, take some profits.
- VIX went above 50 (highest reading since 2008 crisis, before getting rejected
- Its the US election year, and Trump is not going to let equities fall 50%


Looking at the chart above, Asset managers are most likely wrong with time. They add shorts VIX on bottom.
Shorts are 6,5%, barely nothing. Its like they don't see a fall in VIX, so no rise in stocks for them. They are a contrarian group.

Next move for CAD ?

While analysing currencies/commodities/equities i'll just post the most relevant chart, either big changes of positionning, or interesting chart (high/low readings) from a COT perpective, and from my system. So i'll have a look at both sentiment, and technical.


This chart above is showing the spread between longs and shorts asset managers. Lately ? it went negative. More asset managers playing the short side than longs asset managers. Historically (at least the past 3 years), it showed a bounce up of CAD. It could take time to materialize but traders may start buying some CAD (especially when you look at the low prices of oil which could bounce up)


This current chart is showing the positionning from the dealer short side. They are decreasing their short bets rather quickly


Daily system is showing its being overstretched for CAD short (chart is USDCAD). So starting to sell USDCAD (daily/weekly timeframe) is the idea here


H4 chart is saying the same as above. Overstretched for CAD shorts. Notice how it was overstretched at the bottom too? That's why i never short "cheap" prices. Only short high/expansive prices

On which side are you for the british pound ?

Something odd happened this week for the British pound

Usually dealers are on the right side of the market, accumulating longs as we go down, shorts as we go up
Asset managers and money managers are the trend followers, wrong on top/bottom, adding longs as we go up, adding shorts as we go down.

What happened this week ? Asset manager went very short, money manager went very long. Both can't be right, and one of them will be the big loser soon

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All of a sudden asset managers went very short

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All of a sudden money managers went very long

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And another unual thing, long dealers increased their long bets as we go up. How unusual.

Will we have a crazy week for the GBP ? Annual Budget go crazy ? Another Brexit event ? A rabbit out of the hat ?
IMO, move down is not over

So which side are you ?

Thank you for valuable information posted. watching you every week

Is bitcoin ready yet?

Are bitcoin longs ready or they want cheaper prices to load more?

Thank you, very much appreciated

Will you keep buying euros ?


This chart above represent the spread between longs and shorts asset managers. They are good at timing the wrong side of the market. Increasing too much on top/bottom

Ask yourself a simple question. Will you buy Euro when you know Asset managers have the biggest long positions over the past few years?

I just won't, i'd wait for them to cool off their massive longs

In BOJ we trust ?



This chart above represent the short side of the money managers. Increasing their short bet on bottom (when JPY goes down), decreasing on top (when JPY goes up). Simple.
From this simple explanation we know money managers are trend followers, never right at extreme move, so what comes in mind looking at the chart above is why the short side from the money managers have increased drastically this week ?

My answer is the following, and i'll play that scenario (it can be totally wrong so don't follow it blindy unless it fits your plan).
Short side will increase more and more, but for it to happen JPY price will need to go down. MM can be right once or twice a time at important points.
In my book, they could be right (if not the coming week, next week). If JPY prices go up, i can't see money managers retreat back and clearing all their position, so they'll increase shorts more. As JPY goes down, they'll increase even more to have an extreme position....then JPY will rise a lot.

Same thing goes for Long dealers. They haven't cooled off their long with this current rise. Usually it lead to a retrace, to get more longs.

Either this scenario will happen, or JPY will go up like crazy, to retrace big sometime in the future. But its not my primary scenario, not yet

Palladium aka buying dips forever

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Looking at the swap dealers, the long side, we can see how dealers buy all the dips. They don't want to give up yet.

Live cattle to bottom soon?

Live cattle has been very affected lately, mostly due to the Coronavirus, and lack of demand. It went down more roughly 20% in a quick way.
Lets have a look what's next

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Regarding the money managers, they went net short for the second time in 3 years. They rarely go net shorts. Its a sign its overcrowded on the short side.

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This chart is a daily chart from live cattle. We are clearly in a buying zone, but the move down is very steep and strong. Better wait for the price to show some bottom, a round pattern on lower timeframe

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This H4 is showing we are near a bottom, i wouldn't buy yet because the PA is very strong on the downside.
But i'll closely monitor every day what the commodity is doing.

On a side note : Looking at H1 chart, its not signaling a buy signal yet. Lets give it some time

CHF to continue its rise ?


This first chart is showing us the spread between the net dealers and the net money managers positions
The lower the spread, the better for a correction down. Right now we are very low. Lower means dealers are very short, more short than money managers.
2/3 weeks ago, CHF wanted to correct down, but within a week dealers increased their long, hence the rise.
Right now they have decreased almost everything



Asset managers position, they are near positive territory, at -0,6%. Positive territory would mean correction down so watch out


Long dealers positions, the more they have longs, the higher the price goes. Lately? they are clearing their longs as we go up. Lowest positions within 2 years so far.


Here is a weekly chart of USDCHF (opposite of CHF from COT report) my system, chart speaks for itself. Whenever the system is showing positive territory its a buy, the opposite works the same way


Here is an USDCHF H4 chart. Clearly its a downtrend, everyrise is showing a increase of short in the system.
But this current fall is showing all strength is retreating, entering a retrace territory.

You don't want to be a buyer of VIX, do you ?



This first chart from the dealers trading VIX is showing they went net short this week. Whenever they go net short, you know its time to get out of your longs like they do. History speaks for itself


Regarding the asset managers, they have increased their net longs at a level not seen in years. You don't want to buy up there like they do. You don't want to be the bag holder, don't you ?

All of this doesn't mean VIX can't go higher, but probability is very low. Or thing will explode like all doomsters are saying.

I tend not to listen to them, and look at what the participants are really doing.

Has Crude oil finished its freefall?

Lets have a look at the oil market. Should you buy this falling knife? or sell the bounces?


Having a look at the producers from the COT report. Producers/consumers know their market. We can't distinguish both, but producers hedge shorts when prices are high and they expect it to fall, consumers/users buy hedges when its low, in case prices rise.
What happened lately ? Positions is going from net long to net shorts to net longs. A mess isn't it.
Below is a zoom in over the past few weeks


Producers position zoom. Its explained on the chart. From a COT perpective it seems this last fall was expected by producers/consumers as decreased too much their net longs and went even net short.
This week they went up strongly, buyers went it. At this point if we go down more, i don't think producers group will more short anymore.
You short high and buy low. They are not short gamma option traders, aka buying higher and selling lower.
It could mean a low is in, or very near if we ever get a flash sell off i'll start buying.


This current chart shows the long side of the money managers. Their positions is getting decreased as it goes down. Classic


This current chart shows the short side of the money managers. Their positions is getting increased as prices go down, trend followers power and bad at timing bottom/top


Here is a daily chart from my system. We are almost hitting the negative terroritory, which means we'll enter the buying zone


Here is the same system with H4 timeframe. I have highlighted the buy and sell zone, regarding if the system prints high or low reading.
Its very low right now, lets look for longs.
Prices can go even lower, with system reading printing lower too, but no system is perfect, live with it