Yen: On March 20, the June Japanese yen generated a short term buy signal and remains on an intermediate term buy signal.
The June yen advanced 7 pips on light volume of 78,631 contracts. Total open interest declined by 2,239 contracts, which relative to volume is approximately 10% above average. The COT report released last Friday revealed that leverage funds added 7,102 to their long positions and also added 13,362 to their short positions. As of the COT tabulation date, March 14, leverage funds were short the yen by a ratio of 1.92:1, which is the same as the previous week of 1.92:1 and above the ratio two weeks ago of 1.79:1.
As this report is being compiled on March 21, the June contract is trading higher, up 50 pips and has made a new high for the move of .8978, which is the highest print since .8994 made on February 28. In previous reports, we told clients to avoid the short side of the yen and expect that distressed short-sellers will continue to power the market higher. We have no recommendation.
The June British pound is trading sharply higher, up 1.43 cents or +1.16% on strong volume. The June contract will generate a short term buy signal provided the daily low is above OIA’s key pivot point for March 21 of 1.2398 and the low thus far in trading has been 1.2371. We expect a short term sell signal buy signal to occur in tomorrow’s trading.
Similar to the yen, we have recommended that clients avoid the short side of the pound due to the heavy short position of leverage funds. We will provide a report on today’s activity tomorrow.
From the March 16 report on the yen and pound:
“The low on Friday is .8846 On March 3, the June yen generated a short term sell signal and was never able to generate an intermediate term sell signal. Therefore, once the short term buy signal occurs, which we think will occur on Monday, the yen will the on short and intermediate term buy signals. Do not short this market.”
“The June British pound will generate a short term buy signal provided the daily low is above OIA’s key pivot point for March 17 of 1.2403. The low on Friday is 1.2353 Like the yen, do not short the pound. Leveraged funds are heavily short both contracts.”
Gold: April 2017 New York gold will generate a short term buy signal if the daily low is above OIA’s key pivot point for March 21 of $1235.40 and the low thus far in trading has been 1226.60.
10 Year Treasury Note: The June 10 year treasury note will generate a short term buy signal provided the daily low is above OIA’s key pivot point for March 21 of 123-310 and the low thus far on March 21 is 123-245.
S&P 500 E-mini: The June S&P 500 E-mini will generate a short term sell signal provided the daily high is below OIA’s key pivot point for March 21 of 2358.63. The high thus far in trading has been 2378.75 and it appears likely that a short term sell signal will be generated in tomorrow’s trading. For insight on how to trade these markets, call or email.