Hello, my friends! If this is your first time here, welcome! As I told in my twitter, this week we have pretty interesting signals, so let’s start it.
This table shows financial instruments that had a 15% change in its non-commercial net position from one week to another, so things that are gaining momentum and should give us opportunities to trade with a direction in mind.
AUDCAD – BULLISH BIAS
Stochastics signal triggered for AUDCAD and some other pieces of evidence that a bottom is in place.
- Cut in Net Short Position
- Possible Bottom Signal about to Trigger
Check how it is evident that big speculators are taking profits on their shorts.
Now one interesting thing that was pointed to me by my friend Miad Kasravi is the high correlation that the AUD Currency index has with COFFEE, check the chart. AUD Currency Index vs COFFEE
You will realize that COFFEE leads AUD and the trend for our black caffeinated trend is just starting. I know some stuff about coffee, first of all, I have this, that you may think its old news by now, but it’s not!
From the point of view of COT DATA coffee is experiencing a strong cut in the former huge short positions and an interesting combination of signals that give us pretty good insight on what is about to happen, check:
- Stochastic is overbought;
- net position is short and about to become long;
- net Positions had 15% cut for two consecutive weeks;
- cot Index in Bullish Zone
This is clearly a signal of a huge short squeeze and the chatter is the funds were selling to press the markets but at that level of prices(97-100) become the exportations impossible because of the costs. So what looks is all those shorts are being closed and a long position will be built.
NET POSITIONS FOR COFFEE
Now back again to AUDCAD lets see whats happened the last time we had this signal triggered. For the whole dataset, this is the third time we have a trigger for the signal.
COCOA – BEARISH BIAS
The “Possible Top” Signal is a very reliable one and has just being triggered for COCOA.
- Stochastic in the overbought zone
- Long net Position at levels where previous speculators took profit
Now check what interesting what happened the last time we had such confluence of signals
So COCOA definitely is on the radar and I will play the downside for the following weeks. So every time you see demand breaking down go short, you can also risk selling on supplies zones with the stops above the higher of the zone.
MSCI EMERGING MARKETS INDEX FUTURES – BEARISH BIAS
Very interesting signal because it’s triggered at the exact same price where the previous signal triggered. And it’s not one, but two sell signals
- Downtrend Resumption
- RSI Sell Signal
Also check how interesting the net position, this is something we discussed in the past about buying/selling power capacity and we have already profit being taking in the longs.
“Oh Leo, that’s nice, but wtf is this MSCI EMERGING MARKETS INDEX? I can’t trade it in my broker!”
Calm down my friend, this index is composed of emergent markets and this is telling us that short these markets are the best thing to do now!
Check the country weights inside the index:
For USDMXN we have a nice call and signal that still active. Better now? So turn your alerts on and trade shorting these currencies.
Trades like, ok?
That’s it my friends! I hope this can add value to you in some way. If you have any kind of doubts or questions please comment here, I am looking forward to replying to you.
If you made a profit from trading these reports, also send the report to a friend, retweet and share the way you prefer, but help me spread my word.
And this week I made a small modification on how the report is presented, the entry points and how I will manage the trade will be available inside the trading room only.
Have a great weekend you all!
My best regards,
First time on the weekly report. Amazing man, very in depth into markets and the COT data is very helpful. cheers