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 5004930 Yr US Bond12Gold12
Euro2NASDAQ 1001010 Year US Note77Silver16
British Pound31Dow615 Year US Note55Copper12
Swiss Franc51Nikkei162 Year US Note0Platinum67
Japanese Yen24Eurodollar78
Canadian Dollar61
Australian Dollar16
New Zealand Dollar37
Mexican Peso10
Energies Agriculture Meats Softs 
Crude Oil0Wheat53Lean Hogs63Coffee94
Heating Oil4Hard Red Winter Wheat22Live Cattle49Cotton0
RBOB Gas4Corn47Feeder Cattle0Frozen OJ0
Natural Gas100Oats65Cocoa22
Soybeans18Sugar94
Soybean Oil29
Soybean Meal2
Rough Rice29

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.