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CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

2018-02-26 09:42:00
Paul Robinson, Strategist
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CoT Highlights:

  • Large silver traders back to nearly flat, often coincided with a low in the past
  • Large speculators further reduce EUR and GBP positions
  • Futures positioning charts for other key FX-pairs and markets

The CoT report is longer-term sentiment indicator; for short-term indications see theIG Client Sentiment page.

The most recent Commitment of Traders (CoT) report reflected more selling in the silver futures market, bringing the total net-long held by large silver speculators towards flat, which in the past has been a bullish sign. Large trend-followers in the euro and British pound have been reducing their positions as choppy trading conditions prevail; it is unclear now if there is anything meaningful to be gleaned from recent positioning changes.

Every Friday, the CFTC releases the weekly report showing traders’ positioning in the futures market as reported for the week ending on Tuesday. In the table below, we’ve outlined key statistics regarding net positioning of large speculators (i.e. hedge funds, CTAs, etc.). This group of traders are largely known to be trend-followers due to the strategies they typically employ, collectively. The direction of their position, magnitude of changes, as well as extremes are taken into consideration when analyzing how their activity could impact future price fluctuations.

Key stats: Net position, one-week change, and where the current position stands relative to the past 52 weeks.

cftc cot positioning statistics

Large silver traders back to nearly flat, often coincided with a low in the past

Large speculators reduced their net-long to 5.3k contracts, one of the lowest levels in years. Since mid-2013, it has only been this low or lower (but still above 0) on a handful of occasions. Each time silver underwent a small intermediate-term bounce.

The technical posturing for silver in the short-term still looks poor, as we discussed the other day. However, it is difficult to get a feel bigger picture given the generally range-bound price action. Our focus has been on gold, and should it eventually sustain above the 2013 trend-line, then precious metals should rally. With plenty of traders on the sideline in silver, there is the necessary buying power to push it higher should this be the case.

See how sentiment could tie into the DailyFX Q1 Forecasts and Top Trading Opportunities for 2018

Chart 1 – Silver Positioning

silver cot positioning

Chart 2 – Silver Weekly

Silver weekly price chart

Large speculators further reduce EUR and GBP positions

Large trend-followers in the euro reduced their long for a third week in a row to 126k contracts from a recent record high of 148.7k contracts. During this period, EUR/USD has been in a battle with the 2008 trend-line, but not willing to give up its overall bullish trend.

Positioning suggests the market may be overly bullish at resistance, but until we see price action corroborate this (lower lows, lower highs), we have to respect the trend. A resolution of the recent indecision will come about, just need to be patient in the meantime.

Chart 3 – Euro Positioning

Euro cot positioning

Chart 4 – EUR/USD Daily

EURUSD daily price chart

Pound large specs reduced their net-long for a fourth week in a row, bringing it to the smallest position (+7.8k) since early December. However, positioning size could start to ramp up soon if the triangle we discussed the other day breaks to the top-side and furthers GBP/USD along on its attempt to erase the ‘Brexit’ downdraft.

Chart 5 – British Pound Positioning

British pound cot positioning

Chart 6 – GBP/USD Daily

GBPUSD daily price chart

Large speculator profiles:

US Dollar Index (DXY)

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Japanese Yen

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Swiss Franc

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Canadian Dollar

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Australian Dollar

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

New Zealand Dollar

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Gold

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Copper

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

Crude Oil

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

S&P 500 (E-mini)

CoT: Large Silver Speculators Nearly Flat, EUR & GBP Traders Sell

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---Written by Paul Robinson, Market Analyst

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