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 Dollar98S&P 5006730 Yr US Bond28Gold6
Euro0NASDAQ 1006110 Year US Note8Silver47
British Pound4Dow185 Year US Note12Copper0
Swiss Franc4Nikkei42 Year US Note90Platinum2
Japanese Yen69Eurodollar35
Canadian Dollar0
Australian Dollar0
New Zealand Dollar0
Mexican Peso12
Energies Agriculture Meats Softs 
Crude Oil67Wheat88Lean Hogs0Coffee2
Heating Oil59Hard Red Winter Wheat45Live Cattle26Cotton51
RBOB Gas96Corn49Feeder Cattle12Frozen OJ94
Natural Gas31Oats10Cocoa84
Soybeans26Sugar80
Soybean Oil2
Soybean Meal55
Rough Rice57

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.