Futures Trading based on COT Report W35-20

by Michael Chechnev | Aug 30, 2020 | Trading week results

Hello Everyone,

Today is Sunday and we traditionally summarize the last trading week and prepare our plan for the forthcoming trading week.

The past week was again without trades. Honestly, this has not happened for a long time. The markets don’t have volatility. We believe that we need to wait for the beginning of September when the holiday season ends. The statistics of our trades over the past 6 years show that the autumn time is the most productive time for trading, and during this period there is high volatility in the markets.

Let’s take a look at our last week’s checklist and see if there were any trade opportunities.



S&P500

In our plans for the last trading week, we said that in order to open a trade, we needed a correction based on the %R indicator. Buying SP500 when everyone around is talking and waiting for a correction carries certain risks and would not really want to fall into this trap.

In fact, we see that the whole week has been growing. We did’nt find any opportunities to enter on a pullback – %R and ADX continue to remain at the top for a long time. Only momentum tells us that there should be a correction in the near future. But it is not happening yet. For these reasons, we didn’t trade the SP500 this week.



DOLLAR INDEX

We have long setup and were waiting for an upward movement. There is a divergence, but the price above MA18 hasn’t fixed. There were such attempts, but on Friday the price went back to testing the lows. There is now a flat movement and, accordingly, we are here without a trade.



WHEAT

There were two interesting points for opening a long trade. It was possible to try both an impulse trade and a correctional one, but the Momentum indicator was directed down all this time. This is a bearish attribute. Also, seasonality didn’t contribute to growth, as we see in the seasonality chart. In addition, at the moment of a potential entry, we didn’t like the position of the supply and demand indicator, which was also bearish.

Thus, for the reasons indicated above, we didn’t open a long trade in wheat.

Now the price has approached the high of its flat. Friday was a reversal day. There are high chances of a price reversal. In general, we think that news factors contribute to the rise in wheat prices.






CURRENCIES

Let’s take a look at all currencies in general.
The British pound rewrote its heights, the price didn’t go below MA18. The Swiss Franc and EURO did not drop below MA18 either. The Australian Dollar didn’t go down either.

We continue to monitor currencies, but there are no interesting entries yet.






SOYBEAN MEAL

We planned to do a short trade here. The accumulation was bearish here, but the momentum was moving up. These are conflicting signals. As a result, the price did not fall below MA18, and at the end of the week the price made a new high.

Most likely, news factors play the main role here. Also next week the WASDE report will be published. Let’s see how events unfold next week.


HEATING OIL

We have a valid short signal. In general, there is a flat movement. The price dropped below MA18 only on Friday. Thus, next week we will continue looking for interesting entries to heating oil.



COPPER

Copper is on our checklist in collum SELL. There is a very bearish momentum here, but the price continues to keep above MA18. In addition, there are attempts to make new peaks. There were no interesting patterns for entering a short position last week.



INDEX CRB

In the CRB index, the week has been growing. Most likely, the next week will be growing as well. Next week we will give preference to long trades.


So, next week we will continue looking for entry points, but the main thing to remember is that the trader’s goal is not the fact of the trade, but making money. Therefore, it is important to wait for the right market and the right entry point.

That’s all about our trading in this week.
Next, we are moving to planning forthcoming trading week 36.

These detailed trading plans are published for members in our Insider Week community. Join us now!

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