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: 2K Long Vs. 54K Short – Significant short interest remains.No 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: 115K Long Vs. 7K Short – Significant long position remains.
- Australian Dollar: 68K Long Vs. 4K Short- Significant 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: 224K Long Vs. 653K Short – Slight increase in short interest. A heavy short position remains.
- VIX: 115K Long Vs. 18K Short – Heavy long position suggests market turbulence ahead.
- Gold: 72K Long Vs. 94K 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:
- July 1st – Manufacturing PMI
- July 2nd – Nonfarm Payroll & Unemployment
COT Reports & Weekly Market Calendar – June 27th, 2015 2015 Google
