They’ve finally turned around the battleship…

Here are the details.

Have a great weekend, all!

Here’s a little tutorial for looking at the Commitment of Traders reports published each Friday by the CFTC.

In forex, ignore the “commercial” category (the categories the CFTC use are more appropriate for physical commodities like agricultural goods, rather than financial futures…)  on the table and concentrate on the “non-commercial” or speculative category. To find the market’s overall position, simply net together the long and the shorts. The data released last Friday, as of the end of business July 6, shows the market was net short a total of 38.909 contracts, a big decline over the prior week.

They’ll look very different next week given the big euro rally to end the week.

No real surprise given we’ve fallen like a rock since Monday morning but net EUR shorts rose to a record 113.9K contracts on the IMM as of the close of business on Tuesday. The market is probably even shorter now.

GBP is also at a record short position of 72.2K.

Fading the market based on the this Commitments of Traders data has been a losing effort of late, but the data is instructive. Once the turn comes in the market, the rebound will be swift. If short, keep stops in place or use some profits to buy out-of the-money calls to protect your winnings.

EUR shorts at record high as well.

The market is longest dollars since March of last year when the dollar topped and began a 7-month slide.

As of Tuesday’s close, IMM specs had added to dollar shorts.

Looks like the market is truly chancing its tail early in 2010. IMM  specs turned short of dollars just as the dollar was getting set to rebound late in the week.

Looks like the dollar dip of recent sessions is simple profit-taking. The net dollar long position on the IMM rose to $4.76 bln in the week ended December 29 from $700 the December 22 week. Looks like some of that has been unwound early in the new year….

Here’s the Reuters round up of positions on the IMM. They added to shorts, through the close of business Tuesday.

With that, we wish you a pleasant weekend!

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