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 14th, 2015
Currencies:
- USD: 3K Long Vs. 72K Short – Significant short interest remains. No major changes.
- Canadian Dollar: 52K Long Vs. 2K Short – Net increase in commercials net long position.
- British Pound: 45K Long Vs. 23K Short – No changes. Remains neutral.
- Japanese Yen: 131K Long Vs. 48K Short – Net increase in short interest. Yet, a large long position in Yen remains.
- Euro: 131K Long Vs. 10K Short – Significant long position remains. No change.
- Australian Dollar: 110K 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: 229K Long Vs. 509K Short – No changes. A substantial short position remains.
- VIX: 75K Long Vs. 43K Short – Decrease in net long exposure. Still, a substantial long position suggests market turbulence ahead.
- Gold: 80K Long Vs. 76K 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:
- Just Q-2 Earnings.
COT Reports & Weekly Market Calendar – July 18th, 2015 Google