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 September 15th, 2015
Currencies:
- USD: 2K Long Vs. 45K Short – Slight decrease in net short position. Substantial short interest remains.
- Canadian Dollar: 70K Long Vs. 4K Short – No changes. Significant long interest remains.
- British Pound: 57K Long Vs. 3K Short – Slight decrease in net long interest. British pound is remains bullish.
- Japanese Yen: 70K Long Vs. 5K Short – Substantial decrease in net short interest. Japanese Yen is now bullish
- Euro: 94K Long Vs. 12K Short – Slight increase in net long exposure. Significant long position remains. No changes.
- Australian Dollar: 99K Long Vs. 1K Short- Net decrease in net long 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: 635K Long Vs. 493K Short – Net neutral position remains. No major changes
- VIX: 49K Long Vs. 104K Short – Substantial increase in net short position.
- Gold: 71K Long Vs. 57K Short – No major changes. 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:
- Friday: GDP
COT Reports & Weekly Market Calendar – September 18th, 2015 Google