COT Reports & Weekly Market Calendar – October 30th, 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 October 27th, 2015

Currencies:

USD: 3K Long Vs. 54K Short – No changes. Substantial short interest remains.
Canadian Dollar: 40K Long Vs. 18K Short – Slight increase in short interest. Significant long interest remains.
British Pound: 55K Long Vs. 19K Short – Slight decrease in net short interest. British pound remains bullish.
Japanese Yen: 89K Long Vs. 2K Short – Significant increase in net long exposure. Japanese Yen is now very bullish.
Euro: 112K Long Vs. 55K Short – Significant increase in net long exposure. Euro is now bullish.
Australian Dollar: 103K Long Vs. 20K Short – No changes. 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. This is consistent with our view that the FED won’t raise rates.

Markets/Commodities/Volatility:

E-Mini S&P 500: 473K Long Vs. 382K Short – Net neutral position remains. Sizable decrease in net long exposure.
Nasdaq 100-Mini: 26K Long Vs. 186K Short – Sizable short position.
VIX: 44K Long Vs. 81K Short – Slight decrease in net short exposure.
Gold: 51 Long Vs. 116K Short – No changes. Gold is now bearish.

Conclusion: Based on the information above, commercial interests are now net neutral the S&P. We have also witnessed a decline in net short exposure in VIX. At the same time, commercials now have a very large short position on the Nasdaq. That is important. Gold is now negative.

Next Week’s Market Calendar: