Speculators are once again, betting that the markets are not in a risk-off environment as they increased their net short positions in both the Japanese Yen and Swiss Franc, the traditional “risk off” currencies. Speculators are reaching crowded levels which is something to look for if trading these markets, as risk/reward dynamics change when the majority of Speculators are on the same side. Both currencies have had a poor performance in 2024 for obvious reasons, with the Franc outperforming the Yen in recent weeks.
Looking at positioning, Large Speculators increased their shorts for the third week in a row in the Yen as it trades near the lows of the year.
A closer look at the price chart and the TradingView CMR Indicator shows when Speculators covered their shorts and then subsequently increased a few times the past six months, following the trend.
Same can be seen in the Swiss Franc with both Large and Small Speculators as they increased their shorts.
The Franc has held the recent low and put up a few green days.
If one were inclined to be bearish risk assets, this may be the place to express this idea, rather than short stocks.
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Thanks,
Jason Shapiro & The CMR Team
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