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Dollar Index Speculative Longs Reach a Record

By Jamie Saettele, CMT, Sr. Technical Strategist

19 June 2012 19:04 GMT

Latest CFTC Release dated June 12, 2012:

Week (Data for Tuesdays)	52 week Percentile / Comment (if applicable)
US Dollar	100 – spec longs and commercial shorts are at records
Euro	6 – commercial longs and speculative 1 week removed from record levels
British Pound	51
Australian Dollar	2 – commercial longs and speculative 1 week removed from record levels
Japanese Yen	27
Canadian Dollar	45
Swiss Franc	4
Gold	12
Silver	14
Copper	2
Crude	4

The COT Index is the difference between net speculative positioning and net commercial positioning measured. A light blue colored bar indicates that the difference in positioning is the greatest it has been in 52 weeks (bullish) with speculators selling and commercials buying. A light red colored bar indicates that the difference in positioning is the greatest it has been in 52 weeks (bearish) with speculators buying and commercials selling. Crosses above and below 0 are in bold. Non commercials tend to be on the wrong side at the turn and commercials the correct side. Use of the index is covered closely in detail in my book.

Charts

Non Commercials (speculators) – Red

Commercials – Blue

Small Speculators – Black

COTDiff – Black

Volume on bottom

***

Euro and Australian Dollar positioning are little changed from their record levels the previous week. One would expect new readings on Friday to indicate more of a moderation in AUD (maybe not EUR however) positioning given the relative strength. Of interest right now is the US Dollar Index positioning. Speculative longs reached a record as did commercial shorts. Results are mixed in the weeks and months that follow a peak in the COT Index. A major top formed in 2005. Dips that lasted 1 to 3 weeks within strong uptrends occurred in 2008 and 2011 and a sideways market took place in 2010 at roughly the midpoint of a strong uptrend. If the current scenario is more like 2008, 2010, or 2011, then the USD should find support this week or next.

US Dollar