Loading ...McClellan Financial Publications, Inc
Posted Oct 7, 2014
The U.S. Dollar Index has recently been in one of the biggest blowoff moves we have seen in years. The lesson of the past blowoffs is that the downward slope out of the eventual top tends to symmetrically match the slope of the advance up into it.
This week’s chart shows us that the commercial traders of various currency futures contracts are already making a huge bet on a dollar decline. The indicator in the chart is one that I created several years ago by combining the commercial traders’ net position in multiple currency futures contracts into a single indicator. It does not include all of the currency related contracts which are now featured in the most recent Commitment of Traders (COT) reports, because they do not all have the same lengthy and consistent history of reporting. This indicator combines the commercials’ net position in the euro, yen, pound, Mexican peso, Swiss franc, Canadian dollar, and US Dollar Index futures, each weighted according to the dollar value of each position.
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