COT: Silver Shorts Start to Cover

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 update includes observations on British Pounds, New Zealand Dollars, Silver and Coffee.

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  • Silver shorts start to cover
  • Record commercial short in S&P 500
  • Coffee speculators hold record short position

52 Week Ownership Profile Extremes – British Pound, S&P 500, Dow, Eurodollar, Soybeans, Lean Hogs, Live Cattle, Feeder Cattle, Coffee

13 Week Volume Highs – Silver

Currencies Indexes Interest Rates Metals 
US Dollar98S&P 5007530 Yr US Bond0Gold0
Euro0NASDAQ 1003910 Year US Note18Silver8
British Pound16Dow635 Year US Note0Copper14
Swiss Franc69Nikkei22 Year US Note16Platinum39
Japanese Yen14Eurodollar94
Canadian Dollar53
Australian Dollar0
New Zealand Dollar0
Mexican Peso65
Energies Agriculture Meats Softs 
Crude Oil8Wheat69Lean Hogs53Coffee22
Heating Oil67Hard Red Winter Wheat49Live Cattle57Cotton14
RBOB Gas94Corn41Feeder Cattle49Frozen OJ12
Natural Gas100Oats37Cocoa0
Soybean Oil41
Soybean Meal35
Rough Rice4

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 April 17th, 2018

Non Commercials (speculators) – Red

Commercials – Blue

Small Speculators – Black

COTDiff (COT Index) – Black

52 week Percentile (COT Diff) – Gray

British Pound CME Continuous Contract

Speculators hold their largest net long position in British Pounds since 7/11/2014 and commercials hold their largest net short position since 7/18/2014.  Recall that GBPUSD made a major top in July 2014.  Simply, the British Pound ownership profile warns of a price top.

New Zealand Dollar CME Continuous Contract

The NZDUSD ownership is the most extreme since June and July 2017.  July 2017 marked an important price high.  Simply, the extreme speculative long position and extreme commercial short position warns of weakness.

Silver COMEX Continuous Contract

Speculators are starting to cover their short positions.  In fact, the 1 week change in positions (top red line) is considered extreme.  Larger 1 week changes are indicated by red dots.  Most of the instances where near term price highs.

Coffee ICEUS Continuous Contract

The net speculative short position in Coffee is a record.  Bottom line, the ownership profile indicates potential for a major price low.

Coffee ICEUS Continuous Contract

The 1 week change in Coffee positions is also extreme.  The extreme 1 week change warns of downside capitulation and therefore a price low.