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CoT Highlights:

  • Large specs are net-sellers in crude oil for 11th week in a row
  • Gold finding bids again, but outlook still unclear
  • Large speculator profiles for other major currencies/markets

See the IG Client Sentiment pagefor a timelier look at sentiment in major currencies and markets.

Recently large speculators have come back into gold from the long-side, flipping from net-short back to net-long. The technical picture doesn’t offer much to lean on that this time; uptrend off August low could very well be a broader bear-flag. Large specs sold crude oil on a net-basis for the 11th week in a row. Price action in the near-term is tightening up towards some type of breakout.

On Fridays the CFTC releases a detailed report of traders’ positioning in the futures market as reported for the week ending on Tuesday. Outlined in the table below are key stats concerning the positioning of large speculators (i.e. hedge funds, CTAs, etc.), excluding small speculators and commercial traders.

‘Large specs’ are known to typically employ trend-following strategies, and as such, they tend to add to long positions and reduce shorts in uptrends while reducing long positions and increasing shorts in downtrends. When analyzing the data, we take into consideration the direction of their position, magnitude of changes, as well as extremes.

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

cftc cot data

Check out the DailyFX Trading Guides page for forecasts, trade ideas, and educational material.

Large specs are net-sellers in crude oil for 11th week in a row

With crude oil stuck in the mud, speculators are still hitting bids. Last week marked the 11th week in a row they were net-sellers, bringing their total net-long down by a count of nearly 21k contracts to 310k. This represents the smallest position in a little over 2 years, when the net-long was under 300k contracts in December 2016.

The broader outlook still looks bearish from where I sit, but if the short-term triangle has a bullish breakout then we could see more corrective price action before heading lower. A bearish break at this time might be truncated as more time could be used to work off oversold conditions before making a potential run lower to around 42.

Crude Oil Positioning Chart

crude oil positioning chart

Crude oil daily chart (triangle)

crude oil daily chart, triangle

Gold finding bids again, but outlook still unclear

I’ve discussed the situation in gold in recent months as being relatively pessimistic among large speculators when compared to the past 20+ years. A bearish extreme looking back over that period is right around flat to slightly short.

In the past couple of weeks, we’ve seen large specs come back in at the fastest pace since October as the price of gold has risen a bit. It’s hard to say if it will become a meaningful trend as the clarity in gold is generally lacking. The trend off the August low and the shorter-term one from last month are positives for now but dialing back this could just be a large bear-flag forming.

Gold Positioning Chart

gold positioning chart

Other markets:

US Dollar Index (DXY)

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Euro

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

British Pound

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Japanese Yen

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Swiss Franc

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Canadian Dollar

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Australian Dollar

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

New Zealand Dollar

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Silver

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Copper

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

S&P 500 (E-mini)

Weekly CoT Update for Crude Oil, Gold, and Other Major Contracts

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX