Last week the September 2012 U.S. Dollar Index opened at 82.415 and closed the week at 81.967.
Last week we saw much speculation on Fed stimulus as numerous reports released reflected poor U.S. economic data. This weekend we saw victory in the Greek elections go to the Pro-Bailout party, a positive for euro bulls. However, like last week’s news on the $126 billion Spain bailout, the Greek election exuberance faded overnight. The U.S. Dollar Index opened last night down 307 and as of this morning is up 203.
On the daily chart below we see that the strong uptrend that started early May has weakened. DI- has now crossed up over DI+. MACD is bearish adding divergence from below the signal line and Stochastics are oversold. And let’s not forget about today’s price action.
Proceed to Page 2 for the latest COT Data...
More importantly, look at the weekly chart of the U.S. Dollar Index below. Take a look at how “big” money in the past has postured when the U.S. dollar was below 76. Take a real good look at the Dealer Intermediary group under the Traders in Financial Futures COT report. The CFTC defines them as the “sell side” of the financial markets. That means they are the sellers in an up-trending market. You can see that clearly on the chart. So, if you really want to know when the U.S. Dollar Index starts its ride down to the mid-70s, you need not look beyond the weekly COT reports. Just don’t forget to get on for the ride. Have a prosperous trading week.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
So what now? Well, first we will need to see how the G-20 meeting in Mexico goes over the next couple days. We also will want to see what the FOMC meeting produces tomorrow and Wednesday. Will we see QE3 or any mention of stimulus use? So far, China has sent a clear message about its role as a global engine with Premier Wen Jiabao tempering China stimulus.
To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures