COT Reports & Weekly Market Calendar – August 21th, 2015

COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.

While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.

Latest data, as of August 18th, 2015

Currencies:

USD: 3K Long Vs. 83K Short – Significant short interest remains. No major changes.
Canadian Dollar: 88K Long Vs. 3K Short – Slight net decrease in commercials net long position. Significant long interest remains.
British Pound: 46K Long Vs. 34K Short – Slight increase in net short interest, but remains neutral.
Japanese Yen: 134K Long Vs. 8K Short – Slight decrease in net long exposure. Quite a large long position in Yen remains.
Euro: 117K Long Vs. 40K Short – Slight decrease in net long exposure. Significant long position remains. No changes.
Australian Dollar: 131K Long Vs. 1K Short- Significant long position remains.

Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, Euro, Yen and Australian Dollar rally. British pound is neutral.

Markets/Commodities/Volatility:

E-Mini S&P 500: 309K Long Vs. 586K Short – Few changes. A substantial short position remains.
VIX: 85K Long Vs. 16K Short – No changes. A substantial long position suggests market turbulence ahead.
Gold: 83K Long Vs. 65K Short – Slight increase in net long exposure. Still neutral.

Conclusion: Based on the information above, commercial interests expect the stock market to decline as volatility surges higher. Gold is likely to remain within its trading range.

Next Week’s Market Calendar: