COT For The Holiday

For the noobs, COT is a report on the commitment of traders (CFTC futures reported data). I keep track of the number of speculators long – short (aka net long). If you see wording like Net Spec as a % of OI, that means the number of net speculators (long- short) relative to the total number of contracts outstanding.

All the definitions aside, here are a bunch of charts to look over.

NQ: This just shows that there is still much money “crowded” in NQ futures. Some money has come out, but we are far from levels that say the market is panicking. Some of you may wonder why I dont have the ES on here, well, the answer is simple. The ES is full of day traders and the open interest is really irrelevant. Anyways, it is hard for me to bet on a huge massive short squeeze of epic proportions with nearly 20% of all contracts on one side of a trade…
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect] [amprotect=1,9,5,2] Now, the US$ summation. Here I add up all the positions of all the liquid FX futures contracts.

Apparently there are still many shorts, but some money has come in as of late. One must keep in mind that when the trend in the dollar turns, billions must come out, and that will make things interesting.

FWIW here is the EUR.

Some will say this is bearish, some will say this is bullish. I can only say one thing, money came out. The EUR is actually neutral in terms of net $$$ in speculation, the AUD, CAD are the two with lots of potential money to leave.

Another thing pertinent to equities, is Copper. Money has left the room. This is a mixed signal. (1) why did the fund dump the copper market harder than the flash crash; (2) is that too much to fast? (3) can they continue to liquidate like prior sell offs?

I dont know those answers, but it is something to keep an eye on.

Now I think Mole and I are going to do a cool post on seasonality next week, but I just want to give you an appetizer 😉

This just goes to show that seasonality is hard to fight. June is tied for the 2nd worst month of the year….

Bottom line, have a bunch of beer this holiday, but keep in mind how much money is tied up in equities and FX. From NYSE margin debt, to short interest (lack thereof), and COT (futures) there is a bulk of money on one side of the traded. That does not mean P3 is today, it is just something a trader needs to know.
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I am on to some quality hooch, and a superb dinner with my wife; I wish you all safe travels.

-Volar

P.S.: Props to Geronimo, it made a killing on a holiday !

*** and I look forward to some FX comments from that foul mouthed Australian 😉