This pattern is one of the most powerful and reliable when it comes to COT Data. We calculate the six weeks rate of change of COT Index, we give this the name of Movement Index, and the signal is triggered when we have +-40 points!
RULES: During a correction from an UPTREND, +40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major uptrend. During a correction from a DOWNTREND, -40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major downtrend. The FAILURE of the signal often marks a major trend change So the most important here is not the pattern itself, but that we are at an inflection point, this means that we have a big trend to ride and if we are wrong about the direction we will know very soon and also that our stop-loss is cheap. One last thing to add before charts is the post from last week where we discussed the bottom formation for USDCAD, this aligns with a short in CADJPY.
CHARTS: Let’s see what happened in the past when this signal was triggered.
These are the dates when it triggered:
15/01/2017 – Sell Signal 23/04/2017 – Buy Signal 16/07/2017 – Sell Signal 25/03/2018 – Buy Signal 06/01/2019 – Buy Signal
To check the charts and the rest of this idea go to: