Purpose of the Analysis: Financial futures are a “Zero Sum game”. Somebody’s gains is somebody else’s loss.The positioning and change in positioning of speculative players in the futures market can be used to assess the bullish or bearish positioning of this category of investors which is more price sensitive than hedgers. The COT report is published by the CBOT futures exchange every Friday at 3.30PM Eastern Time, based on closing positions held as per the preceding Tuesday’s close. We analyse this report to determine if speculative (either long or short) positioning is large or small vs. the historical norm and if this positioning is taken wrong or right footed which may provide some early signaling for the immediate price action. Changes above 10k in the net (difference between gross long and gross short) positioning are deemed to be meaningful. Numbers shown are in thousands of contracts long or short with all positions measured vs. the USD. Some history about the COT report can be found here. http://www.cftc.gov/MarketReports/CommitmentsofTraders/AbouttheCOTReports/index.htm Based on speculative positions (still large and now adversely hit net long in EURUSD of 115.1k contracts) reflected in the COT report, there is little reason to expect a halt to the ongoing EUR correction. Trend and momentum gauges also remain favourable to the dollar, as do Italian politics and weakness in EM markets.
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