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 7th, 2016
Currencies:
- USD: 1K Long Vs. 25K Short – No changes. Substantial short interest remains.
- Canadian Dollar: 5K Long Vs. 67K Short – Significant short interest.
- British Pound: 150K Long Vs. 42K Short – No changes. British pound remains bullish.
- Japanese Yen: 16K Long Vs. 27K Short – Neutral.
- Euro: 74K Long Vs. 33K Short – Euro remain bullish.
- Australian Dollar: 42K Long Vs. 17K Short – Bullish.
Conclusion: Based on the information above, commercial interests expect the US and Canadian Dollars to decline while British Pound, Australian Dollar and Euro to rally. Japanese Yen remains neutral.
Markets/Commodities/Volatility:
- E-Mini S&P 500: 443K Long Vs. 336K Short – Net neutral position remains.
- Nasdaq 100-Mini: 27K Long Vs. 72K Short – Small net short position.
- VIX: 153K Long Vs. 15K Short – Record net long VIX position. VIX is at extreme bullish levels. That is net bearish for the market.
- Gold: 41 Long Vs. 181K Short – Large net short position against the gold.
Conclusion: Based on the information above, commercial interests are now net neutral the S&P. Short the Nasdaq and gold, long the volatility. It is important to note a record breaking net long position in VIX.
Next Week’s Market Calendar:
- June 14th: Retail Sales
- June 15th: Fed Interest Rate Decision
COT Reports & Weekly Market Calendar – June 10th, 2016 Googles