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 Dollar69S&P 5009830 Yr US Bond6Gold8
Euro61NASDAQ 1001410 Year US Note6Silver16
British Pound45Dow65 Year US Note2Copper49
Swiss Franc0Nikkei882 Year US Note94Platinum4
Japanese Yen92Eurodollar22
Canadian Dollar26
Australian Dollar0
New Zealand Dollar39
Mexican Peso10
Energies Agriculture Meats Softs 
Crude Oil65Wheat90Lean Hogs0Coffee43
Heating Oil55Hard Red Winter Wheat80Live Cattle0Cotton94
RBOB Gas100Corn94Feeder Cattle4Frozen OJ100
Natural Gas39Oats0Cocoa100
Soybean Oil6
Soybean Meal96
Rough Rice75

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.