RED ALERT: Commercial Traders Vs. Retail Traders – CoT

As of writing, 3/28/2019 there is an extreme balance in the Commitment of Traders. Using volume signatures, you can identify what traders are professional traders or retail traders. Currently leveraged funds are very short, while retailers are very long. In general, big money dictates the market. Market movers typically will try to gather liquidity from retailers by going against what the herd is thinking. I see this as a huge warning sign, especially since we’re still in a technical bear market in every way and failing to break very key levels. It’s very important to note that the BTC March futures on CBOE settle this Friday, at the end of the month.


I’ve switched Laissez Faire to a bearish bias today as of 9:00 AM. However this imbalance in positions is not the only reason.


In the above chart, the price of bitcoin is featured in blue, whilst the the candle sticks are the total amount of margin shorts. Every time we have gotten into the red box region of total outstanding shorts has correlated with large violent selling.


Also, the NVT signal is getting very near the prior sell signal levels while we consolidate within this triangle, while approaching a weekly TD 9. I will write an entire article on the TD 9 in the coming weeks. We’re also being governed by the 200 simple weekly moving average and large amounts of volume are going through this region. 

Laissez Faire should be fine if we do happen to have a violent move shortly. I imagine from what I’ve seen that we will have a large move within the next 10 days, more likely to the downside – but markets can always surprise.

1 Comment found

    Jason Johnson
    Jason Johnson

    Nice write up, looking at the charts I think you are right.

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