The Village Idiot’s Take on COT, from George Parkanyi
I looked at my little COT summarization service and the conclusion is one has a pretty one-sided speculative long trade in commodities. Funds are buying, commercials are selling.
Here are the markets that, in the past 18 months, large specs have never been as net-long, and commercials never as net-short as of this past Tuesday …
- Cocoa
- Gold
- NASDAQ
- Platinum
- Lumber
- Rice
- Soybean Oil
- Mexican Peso
- Hogs
- VIX
- Swiss Franc
And the ones that are only slightly off the extreme polarization — within the 10% percentile…
- Yen
- Cotton
- Copper
- Orange Juice
- 2 Yr Treasuries
- Australian Dollar
- Kansas Wheat
Expand to the 15% percentile and you pick up…
- Crude Oil
- 10-Year Treasuries Canadian Dollar
- Silver
Within the 10% percentile going the other way — commercials substantially net-long and specs substantially net-short are just…
- Natural gas
- Interest rate swaps
- 30-day Fed Funds
A couple of interesting things:
2 year and 10 year T-notes are very popular with specs, while the 5 year notes are substantially the other way — big divergence. (What — 5's an unlucky number?)
Both commercials and large specs are substantially long against small specs who have a very large net-short position in S&P e-minis.
George Parkanyi, Canadian telecom entrepreneur and ETF trader, blogs at StockAdventures.