Fortunately, I have found all data for EURUSD risk reversals. As I suspected, moments of divergence in price and sentiment (as seen through options) imply a much-weakening trend. Check out the massive divergence we saw in '04-'05 to draw some similarities to the trend we've seen unfold through '06-'07. Keep in mind, of course, that this is a weekly chart, and a divergence in the yearly RR's and price imply a long term change. I was and remain a long-term EURUSD bear.

Attached Images

 

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.53 as nearly 60% of traders are short. Yesterday, the ratio was at -1.48 as 60% of open positions were short. In detail, long positions are 0.9% lower than yesterday and 24.9% weaker since last week. Short positions are 2.5% higher than yesterday and 22.7% stronger since last week. Open interest is 1.1% stronger than yesterday and 3.1% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.

Haven't looked at in a few days, but no surprise given Euro strength. My 6hr chart turned up and barely looked back. Note how longs are weaker since last week and shorts are stronger; fade it.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.45 as nearly 59% of traders are short. Yesterday, the ratio was at -1.45 as 59% of open positions were short. In detail, long positions are 2.0% higher than yesterday and 19.5% weaker since last week. Short positions are 1.6% higher than yesterday and 30.6% stronger since last week. Open interest is 1.8% stronger than yesterday and 6.7% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

Cable last few days has been run away train, almost seems that leading upto rate announce or minutes, it is bullish event. Now what happens after news may be different story. Like Euro small group of longs spotted change 2% and are long but most are not 19% weaker. Shorts gaining in size and that for now is the wrong bet. 6 Hr ADX is strong and climbing.

My system calling for a retrace before a retest of the hi's. The key moving forward is 9968. Monster R and if breached watch reaction , however any breach on my system says buy pullback. Will wait for now as "hourlies" very extended and fractals not aligned.

Euchre


Disclaimer Trading Currencies involves risk. Any opinion, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice.

In the past, the SSI has been working the best has a contrarian indicator and
since the sterling ratio stands below zero we may see the GBP/USD moving towards 2.0.

Today, the ratio of long to short positions in the GBPUSD stands at -1.74 as nearly 63% of traders are short. Yesterday, the ratio was at -1.45 as 59% of open positions were short. In detail, long positions are 8.0% lower than yesterday and 27.4% weaker since last week. Short positions are 10.1% higher than yesterday and 41.6% stronger since last week. Open interest is 2.7% stronger than yesterday and 7.7% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.39 as nearly 58% of traders are short. Yesterday, the ratio was at -1.51 as 60% of open positions were short. In detail, long positions are 7.9% higher than yesterday and 17.6% weaker since last week. Short positions are 1.2% lower than yesterday and 16.7% stronger since last week. Open interest is 2.4% stronger than yesterday and 6.2% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.82 as nearly 65% of traders are short. Yesterday, the ratio was at -1.81 as 64% of open positions were short. In detail, long positions are 3.2% higher than yesterday and 34.2% weaker since last week. Short positions are 3.5% higher than yesterday and 62.3% stronger since last week. Open interest is 3.4% stronger than yesterday and 9.7% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.

USDJPY - The ratio of long to short positions in the USDJPY stands at -1.68 as nearly 63% of traders are short. Yesterday, the ratio was at -1.60 as 61% of open positions were short. In detail, long positions are 3.0% lower than yesterday and 14.1% stronger since last week. Short positions are 1.9% higher than yesterday and 1.3% stronger since last week. Open interest is 0.0% weaker than yesterday and 7.9% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY gains.

USDCHF - The ratio of long to short positions in the USDCHF stands at 1.78 as nearly 64% of traders are long. Yesterday, the ratio was at 1.84 as 65% of open positions were long. In detail, long positions are 4.5% lower than yesterday and 13.9% stronger since last week. Short positions are 1.4% lower than yesterday and 22.1% weaker since last week. Open interest is 3.4% weaker than yesterday and 2.1% below its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

USDCAD - The ratio of long to short positions in the USDCAD stands at 3.86 as nearly 79% of traders are long. Yesterday, the ratio was at 4.48 as 82% of open positions were long. In detail, long positions are 3.1% lower than yesterday and 1.3% weaker since last week. Short positions are 12.4% higher than yesterday and 2.9% weaker since last week. Open interest is 0.3% weaker than yesterday and 2.0% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

The risk reversal rate on the USDCAD has really shot up the past two days, indicating strong call option volatility. Still, I am wary of getting too bullish USDCAD until the channel resistance line is broken.

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The COT is posted at http://www.dailyfx.com/story/chartin...788401903.html

currency ratio %long Signal
EURUSD 1.3514 -2.27 31% Bullish
GBPUSD 2.0047 -3.27 23% Bullish
USDJPY 123.42 -1.12 47% Bullish
USDCHF 1.2243 3.63 78% Bearish
USDCAD 1.0613 4.73 83% Bearish

Find more

http://www.dailyfx.com/story/special...038619115.html

How to Interpret the SSI?

The FXCM SSI is based on proprietary customer flow information and is designed to recognize price trend breaks and reversals in the four most popularly traded currency pairs. The absolute number of the ratio itself represents the amount by which longs exceed shorts or vice versa. For example if the EURUSD ratio is 2.55, long customer orders exceed short orders by a ratio of 2.55 to 1. Conceptually similar to contrarian analyses using the CFTC IMM open position data or COT Report, the SSI provides an alternative approach that is both more timely and accurate in forecasting currency price movement. The SSI is a contrarian indicator that tells you how the market is weighted and where the trend may head. More long positions don't necessary suggest more confidence in the direction of the current trend. In general, when traders start having adverse movements against their position, many tend to increase the size of their position with the purpose to average down their entry price in one last attempt to recover from previous losses. However, the higher the number of short orders in a bull market the more dangerous is to take additional shorts because many of those traders who just entered the markets are also leaving their protective stop losses just above the current price action.

EURUSD - The ratio of long to short positions in the EURUSD stands at -2.27 as nearly 69% of traders are short. Yesterday, the ratio was at -1.72 as 63% of open positions were short. In detail, long positions are 20.1% lower than yesterday and 8.7% weaker since last week. Short positions are 5.4% higher than yesterday and 2.8% stronger since last week. Open interest is 4.0% weaker than yesterday and 6.9% below its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.


GBPUSD - The ratio of long to short positions in the GBPUSD stands at -3.27 as nearly 77% of traders are short. Yesterday, the ratio was at -3.15 as 76% of open positions were short. In detail, long positions are 4.9% lower than yesterday and 10.0% weaker since last week. Short positions are 1.4% lower than yesterday and 9.1% stronger since last week. Open interest is 2.2% weaker than yesterday and 6.7% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.


USDJPY - The ratio of long to short positions in the USDJPY stands at -1.12 as nearly 53% of traders are short. Yesterday, the ratio was at -1.00 as 50% of open positions were short. In detail, long positions are 8.8% lower than yesterday and 4.0% weaker since last week. Short positions are 2.0% higher than yesterday and 21.7% weaker since last week. Open interest is 3.4% weaker than yesterday and 10.7% below its monthly average. The SSI is a contrarian indicator and signals more USDJPY gains.


USDCHF - The ratio of long to short positions in the USDCHF stands at 3.63 as nearly 78% of traders are long. Yesterday, the ratio was at 3.70 as 79% of open positions were long. In detail, long positions are 2.5% lower than yesterday and 11.7% stronger since last week. Short positions are 0.5% lower than yesterday and 9.2% weaker since last week. Open interest is 2.1% weaker than yesterday and 4.2% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.


USDCAD - The ratio of long to short positions in the USDCAD stands at 4.73 as nearly 83% of traders are long. Yesterday, the ratio was at 5.61 as 85% of open positions were long. In detail, long positions are 10.2% lower than yesterday and 2.2% stronger since last week. Short positions are 6.4% higher than yesterday and 9.6% weaker since last week. Open interest is 7.7% weaker than yesterday and 5.8% below its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

The COT is posted for the week. http://www.dailyfx.com/story/chartin...389762530.html

The pound is the most interesting development as the COT data gives scope to a major turn.

I BELIEVE THERE IS AN 80 % CHANCE THAT THE YEN WILL REBOUND AT 120.6
AND 20 % REBOUND FROM THE CURRENT LEVEL 122.1

Dear Mr. Sousa,

I noticed that your latest SSI report on FXCMTR.com includes much less information than before: you only report weekly changes in trader positioning and you skip open interest all together. I don't find it helpful to have *less* information than before, so I'd really appreciate it if you would consider reverting to your previous format.

Thank you very much,

narianu

Currency Rate Ratio %Long Signal
EURUSD 1.36116 -2.46 29% Bullish
GBPUSD 2.01637 -2.71 27% Bullish
USDJPY 122.375 1.44 59% Bearish
USDCHF 1.21522 4.30 81% Bearish
USDCAD 1.06002 3.83 79% Bearish

USDCAD - The ratio of long to short positions in the USDCAD stands at 3.83 as nearly 79% of traders are long. Last week, the ratio was at 4.23 as 81% of open positions were long. Retail traders have been selling the USDCAD and short positions are up by 9.1% since last week. The SSI is a contrarian indicator and signals more USDCAD losses.


You can find charts with historical data at,
http://www.dailyfx.com/story/strateg...830566599.html


The SSI is a contrarian indicator that tells you how the market is weighted and where the trend may head. More long positions don't necessary suggest more confidence in the direction of the current trend. In general, when traders start having adverse movements against their position, many tend to increase the size of their position with the purpose to average down their entry price in one last attempt to recover from previous losses. However, the higher the number of short orders in a bull market the more dangerous is to take additional shorts because many of those traders who just entered the markets are also leaving their protective stop losses just above the current price action.

Retail traders have been selling the EURUSD ahead of next Friday’s non farm payrolls and EURUSD short positions are up by 16.5% since last week. The ratio of long to short positions in the EURUSD stands at -2.57 as nearly 72% of traders are short. Last week, the ratio was at -1.72 as 63% of open positions were short. However, the SSI is a contrarian indicator and signals more EURUSD gains.

Hey guys.

I have been working in a new type of SSI comments.
Please let me know what do you think!

Thanks

EURUSD - 75% of retail traders are short (long to short ratio is -3.02). Retail has been selling more EURUSD (short positions are up by 13.8% since last week). In the past, when retail was short and selling more, the EURUSD has rallied in the following days.

GBPUSD - 71% of retail traders are short (long to short ratio is -2.39). However, retail has been buying the GBPUSD (long positions are up by 55.8% since last week). The SSI is a contrarian indicator and signals more GBPUSD gains.

USDJPY - 52% of retail traders are long (long to short ratio is 1.10). Retail has been buying more USDJPY (long positions are up by 21.8% since last week). In the past, when retail was long and buying more, the USDJPY has sold off in the following days.

USDCHF - 79% of retail traders are long (long to short ratio is 3.88). Retail has been buying more USDCHF (long positions are up by 12.9% since last week). In the past, when retail was long and buying more, the USDCHF has sold off in the following days.

USDCAD - 83% of retail traders are long (long to short ratio is 5.05). Retail has been buying more USDCAD (long positions are up by 22.5% since last week). In the past, when retail was long and buying more, the USDCAD has sold off in the following days.

Jamie- while I also see longer term charts with clear neg. divergences , the call for a reversal not withstanding if I read you is more of a directional call as opposed to go short Cable long us$. Antonio is mentining how SSI is saying Cable strength. As I have mentioned reading b/w the lines when the tide starts moving to long positions inside is when I see a potential reversal, of course your COT report has Cable longs extremely long. I heard one analyst says 2.0500 next stop. Bullish at the top???

I have alluded to this before, is watch Cable/Yen cross for leading indicator many times for Cable/$. For now the 300 pips it gave up on the 9th into the 10th has vanished. BoJ news rate may be a telling tale of risk, etc so all bets off for now.
I'd rather have my system tell me short than try and top tick it.
No new signals on my system, if you aren't long already then you wait for a pb, or wait for a sell signal.


Euchre

As the SSI is a contrarian indicator isn't it odd that USDCAD continues the trend down? Is this an example of extreme positioning signaling a possible reversal? Does the same go for the Swissie in such a case?