part 3

5. Climbing the wall of fear it seems as again today we have very high PUT activity with the ISE ratio at 79 currently after Fridays 91 obviously some smart guys are rushing too early into shorts. We still will have ideally to drop to the 16 VIX level and another supporting factor might be that the Dollar is about to turn but we need to drop to the 1.32/4 support before a brief rally to 1.40 will occur. MAR 10th is a very likely the low and turning point for the Dollar. The EUR short is a very crowded place which is usually a sign for a turning point. As people think that the EUR shows the way for the stockmarket they may take it the wrong way then the market turns althoıugh the last days the correlation has lost its grip.

Excerpt

Net Euro Speculative Positions Hit All Time Record Of -71,623, A Massive 20% Increase In Short EUR Exposure (Commitment Of Traders)

Submitted by Tyler Durden on 02/26/2010 18:21 -0500

Despite expectations elsewhere that speculators may be unwind their Euro short exposure, the CFTC's Commitments of Traders report indicated that for the week ended February 23, futures only speculative shorts hit an absolute all time record of -71, 623, an increase in net short exposure of over 12k compared to the Feb 16 position of -59,422, a massive 20% week over week increase. Another observation: the fans of the JPY are declining materially, with net longs collapsing by 12,195 positions, to just above breakeven, at 1,717. The GBP was the second most hated currency in the past week, with a net positioning of -64,647, an increase in net shorts of 5,409 weekly. The only currencies, which saw net long positions were the AUD (+11,989 to 38,992 and the CAD 4,996 to 28,421), and, of course, the dollar, whose aggregate positioning in nominal terms increased by 20%: from $8.14 billion to $10.28 billion.

Key moves represented graphically:

Charts via Morgan Stanley