So far since the Nov. 1 open of the Dec. 2013 U.S. Dollar Index (USD) (NYBOT:DXZ13), which was 80.330, the USD has moved up to close Nov. 12 at 81.252 after hitting a low on Oct. 25 of 79.060. With positive economic data last week once again fueling tapering talk, the question now becomes, “Is tapering the only item giving bulls the strength to push up the USD?” Let’s have a look.
Big money in the USD is by far the only other item that can give bulls the continued strength to push up the USD. The COT reports highlight how big money is moving through all markets. In the USD you can see the bull move by Commercials on the older Legacy report as they added to net shorts this past week. On the Traders in Financial Futures (the newer more transparent report) you can see Leveraged Funds adding to net shorts, and Asset Managers this past week once again became net long. Other Reportables added to net longs and Dealer Intermediary (sell side) dropped slightly their low net long position last week. Once you see Dealer Intermediary become net short, and add to net shorts that is when you will see a stronger longer-term move up in the USD.
It will be important to watch this over the next few weeks because if a bullish posture starts with big money, the USD will rise with or without tapering. I would like to see consecutive closes above 81.500 this week. Any help here would be appreciated. Have a healthy and prosperous 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...
Looking at the daily chart you see that at this time the USD is in a strong uptrend with ADX at 41.2 and rising. Take notice here that DI+ is dropping now with price action that looks stuck under 81.500. So it is important now to keep an eye in DI Differential. Stochastics are in overbought territory. On the daily chart you can also see the green MTS signal generated by the Futures Strategizer at Trends in Futures on Oct. 29.
On the weekly chart you see ADX dropping reflecting the previous strong down trend is weakening. Stochastics on the weekly chart are mid-range and rising. And see the price action just below 81.500.
Have a prosperous trading week.
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