Speculator Extremes: Bloomberg Commodity Index, MSCI EAFE lead Bullish & Bearish COT Positions

By InvestMacro 

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on October 18th.

This weekly Extreme Positions report highlights the Top Most Bullish and Top Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table.

* We use Tuesday to Tuesday weekly price closes to match up with the COT data (data through Tuesdays) and this accounts for large gaps in the price chart candles.

Here Are This Week’s Most Bullish Speculator Positions:

Bloomberg Commodity Index

The Bloomberg Commodity Index speculator position comes in as the most bullish extreme standing this week. The Bloomberg Commodity Index speculator level is currently at a 88.3 percent score of its 3-year range.

The overall net speculator position is in bearish territory but has has been steadily improving with speculators at the most bullish point in over a year.

Nikkei 225

The Nikkei 225 speculator position comes next in the extreme standings this week. The strength level is now at a 84.97 percent score of its 3-year range.

The Nikkei 225 speculator position is in positive or bullish territory for a fourth straight week this week. The net position has been mostly bearish over the past three years so a positive standing currently puts the strength scores in extreme bullish levels.

Soybean Meal

The Soybean Meal speculator position comes in third this week in the extreme standings. The Soybean Meal strength score resides at a 82.6 percent score of its 3-year range.

The Soybean Meal speculator position has been very bullish since the middle of 2021 with speculator net positions reaching over +100,000 net contracts at their peaks.

US Dollar Index

The US Dollar Index speculator position comes up number four in the extreme standings this week but is just a touch under the 80 percent threshold. The US Dollar Index strength level is at a 79.45 percent score of its 3-year range.

The Dollar has been very strong for a long time now and is near 20-year highs against the Euro, Yen and the British Pound Sterling. Speculator strength scores for the US Dollar Index have been near or above extreme bullish levels for almost a year.

This Week’s Most Bearish Speculator Positions:

MSCI EAFE MINI

The MSCI EAFE MINI speculator position comes in as the most bearish extreme standing this week. The EAFE strength level is at a 6.3 percent score of its 3-year range.

Gold

The Gold speculator position comes in next for the most bearish extreme standing on the week. The Gold strength score is at a 8.2 percent score of its 3-year range as the metals markets have been under pressure in the rising interest rate environment.

Ultra 10-Year U.S. T-Note

Last this week is the Ultra 10-Year U.S. T-Note speculator position which comes in as third most bearish extreme standing of the week. The Ultra 10-Year strength level resides at a 8.9 percent score of its 3-year range.

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*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.