Let’s analyze Euro FX futures and what the Commitment of Traders (CoT) report reveals about the market dynamics.
For those unfamiliar, the CoT report, published weekly by the CFTC, provides a breakdown of the positions held by various participants in the futures market, such as large institutional hedgers, speculators, and smaller traders. It’s a valuable tool for identifying potential market trends.
A common pattern seen in trading behavior is that participants often buy when prices are low and sell when prices are high. Currently, the net position (futures and options combined) is around 18,600 contracts. Interestingly, this is comparable to the positioning seen in September 2022, which was followed by a notable recovery in the Euro.
Here’s something exciting: our system just generated a CoT signal last Friday! These signals aren’t automatic trade triggers; instead, they serve as alerts to shift your attention to the daily chart and search for potential setups. Think of it as a heads-up to start refining your strategy.
Keep in mind, though, that this signal becomes invalid if prices fall below 1.03405—an important level to watch.
Tomorrow, we’ll take a closer look at the daily chart to identify actionable opportunities. Be sure to check back for a detailed breakdown. Stay tuned!
S&P 500 total return composition breakdown
Interesting table by “Topdown Charts”.
Their comment was even more interesting…
“Stockmarket return drivers:
-dividends = consistent but declining
-earnings = important but variable
-valuations = best friend or worst enemy!
Focus on earnings and dividends for long-term growth, monitor valuations for risk and cyclical opportunity.
