COT: Record Ownership Profiles in Crude Oil and Five Year Notes

The COT report is published each week and includes observations on charts of markets that exhibit interesting ownership characteristics and/or changes in ownership characteristics. This week’s report includes observations on 5 Yr. T-Notes, Silver, Platinum, Crude Oil, and Natural Gas. Based on absolute positioning and changes in positioning in the noted markets, it’s clear that traders are chasing segments of the ‘inflation trade’. The sudden popularity of the theme indicates risk of corrections in the observed markets.

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  • Traders chasing the inflation theme
  • Extreme positioning in Crude Oil and 5 Yr. Notes
  • Extreme position changes in the metals

52 Week Ownership Profile Extremes – British Pound, Five Yr. U.S. Treasury Notes, Crude Oil

13 Week Volume Highs – Eurodollar

Currencies Indexes Interest Rates Metals 
US Dollar100S&P 5006530 Yr US Bond2Gold0
Euro0NASDAQ 1008010 Year US Note2Silver28
British Pound0Dow495 Year US Note0Copper0
Swiss Franc2Nikkei182 Year US Note65Platinum4
Japanese Yen59Eurodollar47
Canadian Dollar20
Australian Dollar0
New Zealand Dollar6
Mexican Peso24
Energies Agriculture Meats Softs 
Crude Oil45Wheat100Lean Hogs0Coffee0
Heating Oil35Hard Red Winter Wheat92Live Cattle37Cotton82
RBOB Gas96Corn59Feeder Cattle20Frozen OJ94
Natural Gas26Oats28Cocoa41
Soybeans14Sugar37
Soybean Oil2
Soybean Meal47
Rough Rice78

The COT Index is the difference between net speculative positioning and net commercial positioning measured over a 52 week percentile.  A reading of 100 indicates that the difference in positioning is the greatest it has been in 52 weeks with speculators buying and commercials selling.  A reading of 0 indicates that the difference in positioning is the greatest it has been in 52 weeks with speculators selling and commercials buying.  Speculators tend to be on the wrong side at the turn and commercials the correct side.  Use of the index is covered closely in detail in my book.

Latest CFTC Release dated January 9th, 2018

Non Commercials (speculators) – Red

Commercials – Blue

Small Speculators – Black

COTDiff (COT Index) – Black

52 week Percentile (COT Diff) – Gray

5 Yr. U.S. Treasury Notes CME Continuous Contract

The 5 Yr. T-Notes ownership profile has reached a record.  An extreme speculative short position and extreme commercial long position warns of a sentiment extreme and risk of a price low.

Silver COMEX Continuous Contract

The 4 week change in Silver positions is extreme (speculators buying and commercials selling).  The extreme reading is consistent with conditions seen near a price high or a pause within an uptrend.

Platinum COMEX Continuous Contract

The 4 week change in Platinum positions is extreme (speculators buying and commercials selling).  The extreme reading is consistent with conditions seen near a price high or a pause within an uptrend.

Crude Oil NYMEX Continuous Contract

The Crude Oil ownership profile has reached a record.  An extreme speculative long position and extreme commercial short position warns of a sentiment extreme and therefore risk of price high.

Natural Gas NYMEX Continuous Contract

The 1 and 4 week changes in Natural Gas positions are extreme (speculators buying and commercials selling).  The extreme reading is consistent with conditions seen near a price high or a pause within an uptrend.