Commitment of Traders: Professionals -9.1% (short)

Professionals increased their Short positions this week by almost 3%. The Commitment of Traders reading is -9.1% of total open interest, up from -6.3% last week.

The Large contract (e.g. SP) professionals are still more bearish that the Mini (e.g. ES) contract Professionals with the difference standing at -7.2% (red line above).

Last week I said: "I'm waiting for a few weeks in a row with large increases in short positions before being convinced that this market is going to turn." This week's activity counts as one of those weeks.

Commitment of Traders: Oscillator +117

The Commitment of Traders Oscillator rose from +77 to +117 this week. We're now firmly in the over-bought region but not turned quite yet.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +40.0% (long) and Oscillator -75

Professionals maintained their Long positions on the US Dollar this week. The net Long position reading stands at +40.0%, almost exactly the same as last week.

The US Dollar Commitment of Traders Oscillator fell from -42 to -75 this week. We're in the buy zone now but not quite over-sold yet. Still maintaining my view from last week: "So much bearishness about, I think money managers are going to be surprised when the US Dollar strengthens."

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Commitment of Traders: Professionals -6.3% (short)

Professionals reduced their Short positions this week, but not by much. The Commitment of Traders reading is -6.3% of total open interest, down from -7.2%.

The Large contract (e.g. SP) professionals are still more bearish that the Mini (e.g. ES) contract Professionals with the difference standing at -4.6% (red line above).

I’m waiting for a few weeks in a row with large increases in short positions before being convinced that this market is going to turn. Looks like dips will continue to be bought.

Commitment of Traders: Oscillator +77

The Commitment of Traders Oscillator kicked back up again this week from +68 to +77. Overbought but not turned yet.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +40.1% (long) and Oscillator -42

Professionals continued to increase their Long positions on the US Dollar this week. The net Long position reading stands at +40.1%, up from +32.9% last week.

The Commitment of Traders Oscillator has crossed the zero line and now reads -42. We’re in the buy zone now but not over-sold yet. So much bearishness about, I think money managers are going to be surprised when the US Dollar strengthens.

Arrived in France

Home in France for next 3 months

On a personal note, the working holiday that my wife and I have been planning for the last few months is now underway. First stop is Biarritz in France for 3 months. We’ve got a charming apartment in the historic Helianthe building. Coming from Australia where everything is so "new" we get a real kick out of staying somewhere that was built in 1884. Surf promised for mid-week – we’ll see.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Commitment of Traders: Professionals -7.2% (short)

Professionals added to their Short positions this week. The Commitment of Traders reading is -7.2% of total open interest, up from -6.5% last week.

The Large contract (e.g. SP) professionals are still more bearish that the Mini (e.g. ES) contract Professionals with the difference standing at -6.5% (red line above).

We’ve now had 2 weeks where the Professionals are adding to their Short positions. It’s not a big move right now, so I’m waiting to see if it develops over the coming 2 weeks.

Commitment of Traders: Oscillator +68

The Commitment of Traders Oscillator kicked back up this week from +35 to +68.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +32.9% (long) and Oscillator +34

Professionals increased their Long positions on the US Dollar this week. The net Long position reading stands at +32.9%, up from +28.2% last week.

The Commitment of Traders Oscillator has ticked down and now reads +34. The Oscillator needs to be below the zero line to signal a buying opportunity. So maybe we’ll continue to see weakness in the US Dollar index.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Commitment of Traders: Professionals -5.9% (short)

Professionals continue to reduce their Short positions. This week’s reading is -5.9% of total open interest, down from -6.4% last week.

The Large contract (e.g. SP) professionals are still more bearish that the Mini (e.g. ES) contract Professionals with the difference standing at -4.2% (red line above).

Commitment of Traders: Oscillator +47

The Commitment of Traders Oscillator dropped this week from +73 to +47.

Commitment of Traders: 2001 to 2003

Looking back at the last bear market, most declines that led to a re-testing of the lows were signaled by a decline in the Commitment of Traders. We haven’t seen a decline in the Professionals’ reading, so there’s still a chance that this rally is not over.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +40.7% (long) and Oscillator +27

Professionals increased their Long positions on the US Dollar this week. The net Long position reading stands at +40.7%, up from +34.9% last week.

The Commitment of Traders Oscillator has ticked down and now reads +27.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Commitment of Traders: Professionals -6.4% (short)

Professionals continue to reduce their Short positions. This week’s reading is -6.4% of total open interest, down from -7.7% last week.

The SP (large contract) Professionals are also becoming less bearish that the ES (Emini contract) Professionals with the difference standing at -2.9% (red line above).

Commitment of Traders: Oscillator +73

The Commitment of Traders Oscillator ticked up this week from +71 to +73. We’re still in this "no man’s land" where we’re not over-bought but showing Bearish Divergence.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +34.9% (long) and Oscillator +43

Professionals maintained their Long positions on the US Dollar this week. The net Long position reading stands at +34.9%, down from +36.1% last week.

The Commitment of Traders Oscillator has now crossed the zero line and reads +43. Will the US Dollar follow it this week and start to rally?

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Commitment of Traders: Professionals -7.7% (short)

Professionals continue to reduce their Short positions. This week’s reading is -7.7% of total open interest, down from -9.2% last week.

The SP (large contract) Professionals are also becoming less bearish that the ES (Emini contract) Professionals with the difference standing at -4.6% this week (red line above).

Commitment of Traders: Oscillator +71

The Commitment of Traders Oscillator dropped from +78 to +71 this week. We’ve turned down before reaching over-bought levels, typically +100. It also looks like we’re making a Bearish Divergence pattern with lower highs on the COT Oscillator and higher highs on the Index.

I take more notice of the Oscillator reading than the Professional reading, so I’m looking for the market to show signs of a reversal. However, the key determinant at the moment seems to be how determined the Fed, Plunge Protection Team, etc. are in supporting the market.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +36.1% (long) and Oscillator -75

Professionals reduced their Long positions on the US Dollar this week. This was a broad move across all the other currencies (Euro, Pound, Aussie, etc.). The net Long position reading stands at +36.1%, down from +42.8% last week.

The Commitment of Traders Oscillator reading is now -75 and has turned up. This is looking more like a Bullish divergence pattern with lower lows on the index and higher lows on the Oscillator.

Again, I’m more interested in the Oscillator reading so I’m looking for the US Dollar (and US Treasuries) to start to reverse. There are too many US Dollar bears!

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

"Rumors of My Death Have Been Greatly Exaggerated"

To quote Mark Twain and apologies for not updating Emini-Watch.com in a very long time. In case you’re intersted there are 3 reasons I haven’t posted:

1. During this last rally I have been very out of sync with the market. I love Shorting and the market has refused to break. I’d like to say it’s a conspiracy and the end-of-day rallies have been very suspicious. But that’s a "cop out" – the market is what the market is.
2. As a result I’ve been focussed on fixing my worst trading habit – getting in and calling potential market turns too early. You will see the results of this research over the next few weeks, along with release of the Better Momentum indicator.
3. Lastly, Vanessa (my wife) & I have been planning a six-month trip. One of the advantages of this will be better time zones for trading (France and Hawaii). Anyway, planning six months away from Sydney has been very time consuming.

OK, enough of my personal trivia. Here are the latest Commitment of Traders charts.

Commitment of Traders

Commitment of Traders: Professionals -9.2% (short)

Professionals have been reducing their Short positions since the beginning of May – from a maximum Short interest of -18.5% to -8.0% two weeks ago. In the last couple of weeks they have increased their Short positions to -9.2% of total open interest.

Commitment of Traders: Oscillator +78

The Commitment of Traders Oscillator is now reading +78. This cross of the zero line allows us to mark the bottom of the last down swing at 865 and 4 weeks ago (cyan blue dot). Now we’re starting to reach over-bought levels.

In the last Commitment of Traders update, when the Oscillator was reading -145, I wrote: "We’re now over-sold and the Oscillator has turned up slightly but it’s probably too early to be looking for a major upswing. Let’s wait and see."

Well, that week turned out to be a bottom and the start of a strong 140 point rally. The Commitment of Traders Oscillator does not lie!

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +42.8% (long) and Oscillator -102

Professionals continue to be bullish on the US Dollar and have increased net Long positions to +42.8% of total FX open interest. The Commitment of Traders Oscillator has made a double dip and is reading -102. Looks like we might have a Bullish divergence pattern setting up (lower low on the index and higher low on the Oscillator).

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

It’s been a few weeks since the last Commitment of Traders update, so here’s what’s going on.

Commitment of Traders: Professionals -10.1% (short)

The picture is becoming a lot clearer with Professionals dialing back their Short positions. This week’s reading is net Short -10.1% of total open interest. This is down from a high of -18.5%. This reduction in net Short open interest is exactly what you’d expect as a down trend gets underway.

Commitment of Traders: Oscillator -145

The Commitment of Traders Oscillator has now moved below the zero line and is reading -145. The move below zero allows us to mark the top of the last upswing at 953 and 5 weeks ago (red dot).

We’re now over-sold and the Oscillator has turned up slightly but it’s probably too early to be looking for a major upswing. Let’s wait and see.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +31.9% (long) and Oscillator -56

There was quite a lot of interest in the Commitment of Traders analysis for the US Dollar last time I posted this chart, so I’ve included an update.

As you can see, Professionals are bullish on the US Dollar with a net Long position of +31.9% of open interest. The Commitment of Traders Oscillator is also over-sold and turning up with a reading of -56 this week.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Latest Commitment of Trader analysis for the S&P500 and US Dollar Index.

Commitment of Traders: Professionals -15.4% (short)

Professionals have started to dial back their Short positions. This week they reduced their net Short positions from -16.5% to -15.4% of total open interest. This is down from a high of -18.5% seven weeks ago.

The SP (large contract) Professionals are still more bearish than the ES (mini contract) Professionals. However, the ES Professionals are beginning to catch up.

The red line in the chart above (which shows the difference between SP and ES) is starting to rise and is at -13.6% this week. Back testing shows the SP Professionals are a more reliable indicator of market direction.

Commitment of Traders: Oscillator +75

The Commitment of Traders Oscillator has ticked back down again and is at +75 this week. The Oscillator continuing to fall will confirm that a down swing is underway.

US Dollar Index: Commitment of Traders

US Dollar Index: Professionals +27.3% (long) and Oscillator -72

New chart this week because I talked about the reversal of the "Risk" trade on Tuesday’s video. Quick re-cap, we could be seeing a move towards:

• Short Equities
• Short Emerging Markets
• Short Commodities
• Long US Dollar
• Long US Treasuries

Latest Commitment of Traders data for the US Dollar shows the Professionals are net Long +27.3% of total open interest. The Commitment of Traders Oscillator is at -72 (over-sold) and has turned up. This supports a possible move out of equities and into treasuries.

The CFTC data for the FX futures market does not include the (much larger) swap and spot markets. However, it is representation of what’s going on. To calculate the Professional position I combine data for the US Dollar Index with Yen, Euro, Pound, Swiss Franc, Aussie, etc.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Latest Commitment of Trader analysis.

Commitment of Traders: Professionals -16.9% (short)

This week the Professionals added a little to their net Short positions, now -16.9% of total open interest. This is down from a high of -18.5% five weeks ago.

The SP (large contract) Professionals are still more bearish than the ES (mini contract) Professionals, with the red line in the chart above at -17.7%. Back testing shows the SP Professionals are a more reliable indicator of market direction.

Commitment of Traders: Oscillator +73

The Commitment of Traders Oscillator is now on its way down but ticked back up this week to +73. I’m not particularly worried about this but expect a down swing to get underway this week.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.