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CHAPTER 4 - The COT Index > A COMMERCIALS’ VIEW OF THE BRITISH POUND
A COMMERCIALS’ VIEW OF THE BRITISH POUND
The British pound is an actively traded market, by the public as well as by the commercials. Figure 4.3 is a weekly chart showing how the commercials have approached this market for the past four years. The key point to keep in mind is that readings greater than 75 on the index can mean only one thing: on a relative basis the commercials have been doing 75 percent more buying now compared to the past three years. Such readings are often, not always but often enough, found at market low points.
FIGURE 4.3 British Pound Chart
Source: Genesis Financial Technologies, Inc. (www.GenesisFT.com).
To prove this, just take a peek at the pound to see if that does not hold true—that high levels in the index spot very good buying points.