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 Dollar28S&P 50010030 Yr US Bond37Gold33
Euro96NASDAQ 100610 Year US Note6Silver10
British Pound100Dow05 Year US Note2Copper41
Swiss Franc51Nikkei922 Year US Note80Platinum31
Japanese Yen98Eurodollar0
Canadian Dollar28
Australian Dollar6
New Zealand Dollar88
Mexican Peso86
Energies Agriculture Meats Softs 
Crude Oil96Wheat84Lean Hogs0Coffee0
Heating Oil43Hard Red Winter Wheat80Live Cattle0Cotton67
RBOB Gas47Corn92Feeder Cattle0Frozen OJ51
Natural Gas35Oats4Cocoa100
Soybean Oil18
Soybean Meal92
Rough Rice71

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.