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 20th, 2015
Currencies:
- USD: 2K Long Vs. 56K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 42K Long Vs. 15K Short – Slight increase in short interest. Significant long interest remains.
- British Pound: 55K Long Vs. 21K Short – Significant increase in net short interest. British pound remains bullish.
- Japanese Yen: 71K Long Vs. 25K Short – No net changes. Japanese Yen is still bullish.
- Euro: 88K Long Vs. 69K Short – Slight increase in net short exposure. Euro is now neutral
- Australian Dollar: 102K Long Vs. 19K Short- Slight decrease 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, Japanese Yen and Australian Dollar rally. EU is neutral.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 550K Long Vs. 378K Short – Net neutral position remains. No major changes
- VIX: 36K Long Vs. 90K Short – No major changes.
- Gold: 51 Long Vs. 116K Short – Slight increase in net short position. Gold is now bearish.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P. Gold is now negative.
Next Week’s Market Calendar:
- Q-3 Earnings
- Tuesday: Durable Goods and Consumer Confidence
- Wednesday: FED Interest Rate Decision.
- Thursday: GDP
COT Reports & Weekly Market Calendar – October 23rd, 2015 Google