After a dramatic down week on the Emini, here's what the Commitment of Traders charts are showing:
Commitment of Traders: Professionals -13.7% (short)
Professionals continue to reduce their Short positions from the peak of -19.3% six weeks ago to -13.7% of total open interest this week.
The Large contract (e.g. SP) Professionals are still more bearish than the Mini (e.g. ES) contract Professionals with the difference standing at -14.4% (red line above).
Commitment of Traders: Oscillator +32
The Commitment of Traders Oscillator reached a peak of +133 seven weeks ago. Since then it has rolled over and this week is reading +32. I think this week's high of 1,147 will represent the peak of this swing in the Commitment of Traders Oscillator (plotted once the Oscillator crosses the zero line).
Going forward we'll either poke below the zero line and bounce or continue down to oversold levels around -100. The volume over the last 2 days was extreme and could represent Professional buying – we'll know by mid-week if the index starts to level out. The strength of any bounce later in the week will determine if we've just peaked and are heading into a medium term down trend. I'll be looking for "No Demand" volume patterns under the 1,147 level to signal this scenario.
US Dollar Index: Commitment of Traders
US Dollar Index: Professionals +4.5% (long) and Oscillator -74
The Professionals started to get long the US Dollar this week and are currently reading +4.5% of total open interest.
The US Dollar Oscillator has now dipped below the zero line and is reading -74, close to over-sold and in the buy zone. Since the US Dollar Index is advancing this shows a possible continuation of the uptrend.
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.