Maximum Bearishness For Silver?

For the first time since at least 2008, speculators flipped bearish on silver. Source: Oanda’s CFTC’s Commitments of Traders Speculative net contracts have trended downward for about a year and approached zero in December around the time the Federal Reserve last hiked rates. Yet, I did not think it was “possible” for positioning to go … Read more

Forex Critical: Speculators Watch the Japanese Yen Fall to A New Edge

A month ago, I described the Japanese yen (FXY) as a currency on edge given a sharp and abrupt response to a feared tightening cycle from the Bank of Japan (BoJ). So far, no tightening cycle has launched, but the yen has steadily strengthened over the last month. For example, USD/JPY broke down below support … Read more

Above the 40 (January 16, 2018) – Overbought Conditions Abruptly End On A Reversal Day

AT40 = 64.0% of stocks are trading above their respective 40-day moving averages (DMAs) – ended a 1-day overbought period AT200 = 62.7% of stocks are trading above their respective 200DMAs VIX = 11.7 Short-term Trading Call: bullish Commentary It figures that just one day after the stock market finally crossed into overbought territory, it … Read more

Forex Critical: The Japanese Yen On Edge

I wrote little about the Japanese yen (FXY) over the past year or more. It’s time to pay closer attention. As every forex trader knows by now, on Tuesday, January 9th the Bank of Japan (BoJ) slowed down its purchase of bonds with more than 10 years maturity. The yields of these bonds ticked up … Read more

Canadian Dollar: Economic Data Overriding the Brakes of the Bank of Canada

The Canadian dollar (FXC) is at an interesting juncture. Strong economic data has strengthened the currency but the Bank of Canada (BoC) has applied brakes on currency’s rally. The Canadian dollar weakened in the wake of policy statements in October and December. The last word of 2017 went to the economic data as hot inflation … Read more

Forex Critical: Australian Dollar – Speculators Quickly Flip Bearish

Speculators have remained overwhelming bullish on the Australian dollar (FXA) for almost two years. Last week, they made a quick switch to net bearish positioning. Net contracts went from 40,720 net long to 12,660 net short. Open interest fell from 157,029 to 105,270, so it appears that bullish speculators made a hasty retreat rather than … Read more

Silver and Gold In Retreat

Maybe it is fear of the Fed, maybe it is the distraction of cryptocurrencies reaching for infinity. Whatever the issue, speculators in precious metals are in rapid retreat as net long contracts dropped to levels not seen in 4 to 5 months. Source: Oanda’s CFTC’s Commitments of Traders This decline represents the climax of October’s … Read more

Forex Critical: A Speculative Breakout for the Euro

Speculators have not been this bullish on the euro since at least 2008. Source: Oanda’s CFTC’s Commitments of Traders These charts reveal a distinct sentiment shift on the euro this year. Since 2008, speculators spent the majority of the time as firm euro bears. The new high in net long positioning going into 2018 signals … Read more

GDP Helps Confirm Australian Dollar Breakdown After Brief Post-RBA Optimism

The currency market painted a bullish interpretation of the latest monetary policy decision from the Reserve Bank of Australia (RBA). By the time of the September quarter GDP report, that incremental bullishness disappeared and setup a bearish interpretation of the Australian economy. Source: The net result, which includes a U.S. jobs report, is an … Read more

With Inflation Low, the Reserve Bank of Australia Pushes on the Australian Dollar

In mid-July, the Australian dollar (FXA) surged higher after a hawkish interpretation of the RBA minutes. Guy Debelle, Deputy Governor of the Reserve Bank of Australia (RBA), tried to walk the market off its enthusiasm. The pause was temporary. By the early September RBA meeting, AUD/USD hit a 2+ year high, albeit partially because of … Read more