Mazanec crunches COT and social indicators

Forex analyst Tim Mazanec posted yesterday on Forex Crunch about risk and reversal in the EUR/USD.  Starting with a dip into commodities (sugar??), Tim quickly moves on to the heart of the matter:

"To me EURUSD is the ultimate gauge of global risk-taking and if stocks are reversing then shouldn’t EURUSD be trading lower as well?"

He points out that the COT (Commitment of Traders) report, while extremely valuable, is also delayed by three days, an eternity in spot Forex.  Mazanec shows us how to use Currensee's Market Watch widget so see investor positioning in real time.

"The beauty of Currensee is that the MarketWatch table shows the positioning of traders and investors in real-time.  If you go from Long to Short you will see the change right away, not 3 days later.  There is also more than one way to view the MarketWatch data.  One way is to view the currency pair and positioning by positioning volume.  For instance, as of writing at midday on Monday (Jan. 25,  2010) 75% of traders had moved to Long in EURUSD.  Another way is to view the nominal amount of traders with a position at stake in a currency pair.  In this case it is almost evenly split with the amount of traders Long EURUSD vs. traders Short EURUSD."

This screenshot of the Market Watch Widget is almost 24 hours after Tim wrote his post and you can see how much things have moved already:

Market Watch Widget


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