COT Reports & Weekly Market Calendar - July 24th, 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 21st, 2015

Currencies:

USD: 4K Long Vs. 78K Short – Significant short interest remains. No major changes.
Canadian Dollar: 63K Long Vs. 3K Short – Net increase in commercials net long position.
British Pound: 45K Long Vs. 31K Short – Remains neutral.
Japanese Yen: 132K Long Vs. 36K Short – Net decrease in short interest. A large long position in Yen remains.
Euro: 137K Long Vs. 11K Short – Significant long position remains. No changes.
Australian Dollar: 126K Long Vs. 1K Short- Significant long position. Slight increase in long position. Massive 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: 223K Long Vs. 540K Short – Few changes. A substantial short position remains.
VIX: 75K Long Vs. 43K Short – No changes. A substantial long position suggests market turbulence ahead.
Gold: 85K Long Vs. 61K 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: