On the weekly chart of the U.S. Dollar Index, you can see how a posture change started early in September as Dealers liquidated net shorts and became net long. This past week we saw Dealers go from 5,273 contracts net long to 4,602 contracts net long. To see the U.S. Dollar Index strengthen we will want to see Dealers become net short once again.
On the weekly chart of the euro, look at when Dealers had their largest net long position and look at the price action at 1.22000 — the previous weekly low. And look what happens to the price action of the euro as Dealers liquidate net longs. This past week we saw Dealers net long 40,360 contracts a move up from the previous week of 34,702 contracts.
Last, but not least, look at the weekly chart of the yen. Dealers are once again net long 16,206 contracts. A week earlier they were net short -1,426 contracts. Better yet, look back at early September where Dealers were net short -57,876 contracts. Like the euro, look at the large net long Dealers had in March 2013, and look where the yen was trading, interesting isn’t it.
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...