COT Reports & Weekly Market Calendar - July 11th, 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 JULY 7th, 2015

Currencies:

USD: 2K Long Vs. 69K Short – Significant short interest remains. No major changes.
Canadian Dollar: 36K Long Vs. 2K Short – Canadian Dollar short position has vanished. Commercials are now net long.
British Pound: 45K Long Vs. 27K Short – Substantial increase in commercial net short position. More neutral now.
Japanese Yen: 135K Long Vs. 33K Short – Net increase in short interest. Yet, a large long position in Yen remains.
Euro: 135K Long Vs. 11K Short – Significant long position remains. No change.
Australian Dollar: 94K Long Vs. 1K Short- Significant long position. Slight increase in long position

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

Markets/Commodities/Volatility:

E-Mini S&P 500: 246K Long Vs. 506K Short – Marginal increase in net short exposure. A substantial short position remains.
VIX: 70K Long Vs. 27K Short – Slight decrease in net long exposure. Still, a heavily long position suggests market turbulence ahead.
Gold: 80K Long Vs. 78K Short – No change. 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: