COT Reports & Weekly Market Calendar – September 8th, 2015

I am back. There were some major and interesting changes in COT Reports over the last two weeks. Let’s take a look at that first.

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 1st, 2015

Currencies:

USD: 3K Long Vs. 63K Short – Significant decrease in net short position. Substantial short interest remains.
Canadian Dollar: 77K Long Vs. 4K Short – Slight net decrease in commercials net long position. Significant long interest remains.
British Pound: 61K Long Vs. 11K Short – Slight increase in net long interest. British pound is now bullish.
Japanese Yen: 125K Long Vs. 90K Short – Massive net increase in short interest. Japanese Yen is now neutral.
Euro: 124K Long Vs. 64K Short – Slight decrease in net long exposure. Significant long position remains. No changes.
Australian Dollar: 139K Long Vs. 1K Short- Slight increase 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 and Australian Dollar rally. Japanese Yen is now net neutral.

Markets/Commodities/Volatility:

E-Mini S&P 500: 545K Long Vs. 572K Short – Big swing from large net short position to neutral. Commercials took profit after later August sell-off.
VIX: 54K Long Vs. 70K Short – Massive swing from a large long position to net neutral. Commercials took profit after late August sell-off.
Gold: 69K Long Vs. 73K Short – Slight increase in net long exposure. Still neutral.

Conclusion: Based on the information above, commercial interests are now net neutral. This is consistent with the market remaining in a tight, relatively speaking, trading range. Gold is likely to remain within its trading range.

Next Week’s Market Calendar: