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 October 13th, 2015
Currencies:
- USD: 2K Long Vs. 56K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 44K Long Vs. 4K Short – Significant long interest remains.
- British Pound: 64K Long Vs. 2K Short – Slight increase in net long interest. British pound remains bullish.
- Japanese Yen: 69K Long Vs. 17K Short – No net changes. Japanese Yen is still bullish.
- Euro: 92K Long Vs. 46K Short – Slight increase in net short exposure. Significant long position remains.
- Australian Dollar: 102K Long Vs. 24K Short- Slight increase in net short position. Significant long position remains.
Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, British Pound, Euro, Japanese Yen and Australian Dollar rally.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 536K Long Vs. 363K Short – Net neutral position remains. No major changes
- VIX: 37K Long Vs. 95K Short – No major changes.
- Gold: 56 Long Vs. 97K Short – Slight increase in net short position. Still neutral.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P and Gold. Please note, commercials have substantially increased their net short position in VIX. That could be due to them expecting a market rally and/or us remaining in a trading range. Considering the fact that S&P is neutral, no definitive conclusion can be ascertained at this time in regards to VIX. Gold is likely to remain within its trading range.
Next Week’s Market Calendar:
- Just Q-3 Earnings
COT Reports & Weekly Market Calendar – October 16th, 2015 Google