COT: Speculators Loving British Pounds

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, Australian Dollars, S&P 500, and Silver.

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  • British Pound positioning a worry for bulls
  • Record commercial short in S&P 500
  • Record speculative short in Silver

52 Week Ownership Profile Extremes – Japanese Yen, British Pound, S&P 500, Nasdaq, Dow, 5 yr T-Notes, , Silver, Soybeans, Lean Hogs, Live Cattle, Feeder Cattle, Sugar

13 Week Volume Highs – Soybeans, Live Cattle, Feeder Cattle

Currencies Indexes Interest Rates Metals 
US Dollar33S&P 5001030 Yr US Bond73Gold61
Euro0NASDAQ 1004710 Year US Note96Silver73
British Pound77Dow375 Year US Note92Copper65
Swiss Franc37Nikkei182 Year US Note75Platinum84
Japanese Yen41Eurodollar100
Canadian Dollar12
Australian Dollar29
New Zealand Dollar65
Mexican Peso100
Energies Agriculture Meats Softs 
Crude Oil35Wheat6Lean Hogs92Coffee37
Heating Oil14Hard Red Winter Wheat0Live Cattle100Cotton16
RBOB Gas43Corn2Feeder Cattle100Frozen OJ41
Natural Gas59Oats41Cocoa2
Soybean Oil84
Soybean Meal8
Rough Rice6

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 3rd, 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.

Australian Dollar CME Continuous Contract

Speculators have flipped to a net short position in the Australian Dollar.  Since the 2016 low, each flip to a net short position has indicated a price low.

E-mini S&P 500 CME Continuous Contract

Commercials hold a record net short position in S&P 500 futures.  At major market turns, commercials tend to be on the right side.  In this case, commercials are prepared for a mark down in price.  Oddly (or not?), the net speculative position in Nasdaq futures is the most short since September 2010.  US indices were coming out of a 6 month base in September 2010.  My quick take based on the ownership profiles is bearish S&P and bullish Nasdaq.

Silver COMEX Continuous Contract

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