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COT For The Holiday

COT For The Holiday

by MoleMay 27, 2011

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…
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.
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.

I am on to some quality hooch, and a superb dinner with my wife; I wish you all safe travels.


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 😉

About The Author
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.

  • raised_by_wolves

    Thanks for the charts Volar. Since I’m trading the SPX to gold ratio, I was wondering if you could do a chart of gold seasonality going way back when to compare with that chart of S&P 500 seasonality since 1950. I’m hoping there are some months were one is best and the other is worst.

  • volar

    I will see what I can to 😉

  • Anonymous

    Great post Volar

  • Anonymous

    RBW I believe gold seasonality will be even more relevant than other markets. A significant part of gold demand is seasonal physical in India.

  • Anonymous

    Great post mate 🙂 I’ll put some fx thoughts together

  • molecool

    And if this wasn’t enough yet here’s a must read article everyone should absorb this weekend:

    Yes, yes – it’s over at ZH – bite me! 😉

  • Anonymous

    Time to short some Qs.

  • Anonymous

    “Historic debt growth was built up without the disease of inflation infecting the US economy. This is explained by inflation that was effectively exported whenever increasing levels of US dollars were printed by the US Treasury.
    Any threat to this strategy was rapidly challenged by US military power. As an example, when Saddam Hussein, President of Iraq, decided to sell Iraq oil denominated in Euros, he was invaded by US forces three months later and removed from power. When Libyan leader Muammar Gaddafi wanted gold in exchange for Libyan oil, he almost immediately found himself the target of US planned military intervention.”
    That would clarify a lot.

  • Anonymous

    Hey Scott, it looks like your web site is down again.

  • ultra

    Nice post, nice metrics.

    $EURJPY coiling for a move – not long broken the high of the prior, inside period on the 8-hour chart –

  • Anonymous

    Thanks for that. Sobering.

  • Anonymous

    Parabolic moves are fun!

  • Anonymous

    bullish as hell. the effect can already be seen – futures going nuts.

  • OllyVaradi

    I wouldn’t want to be associated with the banking industry when this thing unravels. Frankly, I’m surprised at myself for being surprised at this overnight move. Upside was always on the cards for this week but a push up like this to kick off the week wasn’t in my playbook. At all. Got burned on a couple minor shorts with orders getting filled overnight but tight stops so no major dramas.

    I still don’t think the correction has done enough yet although we could well be 3-4 days in to a 8-15 day melt up now.

    Market making no sense to me or my indicators just now – time to step away and re-focus. Good luck all.

  • OllyVaradi

    I’m closed out of everything. I’ll drop by as and when and may be back towards month end.

    I’ve no doubt I’ll miss the big dump, but that’s the whole idea for the MM’s.

    Good luck all and thanks to Mole and everyone else that makes this site such an oasis of common sense. If only the power brokers could take note.

  • Anonymous

    While large speculators remain net long the NASDAQ 100
    E-Mini Futures contract this past Friday’s COT shows that the Commercials or Hedgers maintained
    their net short position and continue to be in bearish territory.

  • Anonymous

    Still long /ES, target now is the upper BB 1346 area. Took a long GS as well, a bit over due for a snapback.

  • Anonymous

    Same mate, this market makes no sense at all to me, fortunately stainless steel rats are comfortable with saying “I dont know”

    To me the outcome which makes the most sense (fucks both sides) is an attempt to go up, which fails just short of the old highs. I cant see enough shorts in the game to squeeze it too far and the last buyer is close to buying.

    I have no positions at this time, I expect this trading week to be a complete waste of time

  • volar

    careful w/ emini, watch SP, NQ (both). Not that I disagree with you, just saying I have not been able to glean much from the Emini FWIW

  • Gold_Gerb

    write it off to Month-End ‘window dressing’.
    always makes me feel better.

    GG’s Rule #73 – do not trade last few days of month without (near absolute) certainty.

  • volar
  • Anonymous

    i want a flash crash.

  • Anonymous

    Vix not buying this rally

  • Anonymous

    It’s not?  I went up over 7% from today’s VIX bottom.

  • Anonymous

    You have to say the right spell for that to happen. Try: Descendo !

  • bshah

    Descendo !!!  Tress…

  • Anonymous

    Boys lost at VWAP. Adult bears take charge.

  • OllyVaradi

    I am soooo pissed off being caught out on a bear-scare operation. Al be Back  – famous Austrian Guv’nor, no?

  • Anonymous

    Charge is what they need to do.  Breaking support and then drifting seems weak to me.

  • Anonymous

    any thoughts on the Zerofx after the ON spike?

  • Anonymous

    ok, if this POS stays up here in the clouds despite everything that’s going on around it, it’s going to be one of the most WTFish feelings, since i’m trading.

    Yea, i know, i know, EMU bails out greece and there is QE3 just around the corner.

  • Anonymous


  • Anonymous

    ¨°º¤ø„¸ N E W „ø¤º°¨ 
    ¸„ø¤º°¨ P O S T “°º¤ø„¸