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 June 23rd, 2015
Currencies:
- USD: 1K Long Vs. 59K Short – Significant short interest remains. No major change.
- Canadian Dollar: 44K Long Vs. 37K Short – No change. Neutral
- British Pound: 45K Long Vs. 7K Short – Commercials decreased their short position – more long now.
- Japanese Yen: 129K Long Vs. 1K Short – Large long position in Yen remains.
- Euro: 125K Long Vs. 8K Short – Significant long position remains. Slight increase in long position.
- Australian Dollar: 74K Long Vs. 3K Short- Significant long position. Slight increase in long position
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while British Pound, Euro, Yen and Australian Dollar rally.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 237K Long Vs. 482K Short – Significant decrease in net short exposure. Although, a substantial short position remains.
- VIX: 94K Long Vs. 15K Short – Slight decrease in long position. Still, heavy long position suggests market turbulence ahead.
- Gold: 69K Long Vs. 95K Short – No change. Still neutral.
Conclusion: Based on the information above, commercial interests expect the stock market to decline as volatility surges higher.
Next Week’s Market Calendar:
- Q-2 Earnings.
- July 8th – FOMC Minutes
COT Reports & Weekly Market Calendar – July 3rd, 2015 Google