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 May 20th.
This weekly Extreme Positions report highlights the Most Bullish and 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)
The Japanese Yen speculator position comes in as the most bullish extreme standing this week as the JPY speculator level is currently at a 97 percent score of its 3-year range.
Free Reports:
The six-week trend for the percent strength score totaled a rise 6 points this week. The overall net speculator position was a total of 167,330 net contracts this week with a decline of -4,938 contract in the weekly speculator bets.
Speculators or Non-Commercials Notes:
Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.
These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.
The Nikkei 225 speculator position comes next in the extreme standings this week. The Nikkei 225 speculator level leveled this week at a 96 percent score of its 3-year range.
The six-week trend for the percent strength score was a boost 35 points this week. The speculator position registered 1,904 net contracts this week with a weekly increase of 2,025 contracts in speculator bets.
The VIX speculator position comes in third this week in the extreme standings as the VIX speculator level resides at a 94 percent score of its 3-year range.
The six-week trend for the speculator strength score came in at a boost by 16 points this week. The overall speculator position was 4,424 net contracts this week with a decrease of -1,675 contracts in the weekly speculator bets.
The MSCI EAFE MINI speculator position comes up number four in the extreme standings this week. The MSCI EAFE-Mini speculator level is at a 90 percent score of its 3-year range.
The six-week trend for the speculator strength score totaled a gain of 13 points this week. The overall speculator position was 774 net contracts this week with a drop of -1,935 contracts in the speculator bets.
The Live Cattle speculator position rounds out the top five in this week’s bullish extreme standings with the Live Cattle speculator level at a 81 percent score of its 3-year range. The six-week trend for the speculator strength score was a decline of -4 points this week.
The speculator position was 103,416 net contracts this week with a dip by -7,231 contracts in the weekly speculator bets.
The Ultra 10-Year U.S. T-Note speculator position comes in as the most bearish extreme standing this week as the Ultra 10-Year speculator level is at a zero percent score of its 3-year range.
The six-week trend for the speculator strength score was -55 points this week. The overall speculator position was -328,444 net contracts this week with a shortfall of -8,837 contracts in the speculator bets.
The 5-Year Bond speculator position comes in next for the most bearish extreme standing on the week. The 5-Year speculator level is at just 1 percent score of its 3-year range.
The six-week trend for the speculator strength score was -12 points this week. The speculator position was -2,275,941 net contracts this week with a drop by -95,898 contracts in the weekly speculator bets.
The Soybean Meal speculator position comes in as third most bearish extreme standing of the week. The Soybean Meal speculator level resides at a 4 percent score of its 3-year range.
The six-week trend for the speculator strength score was -5 points this week. The overall speculator position was -58,173 net contracts this week with a reduction by -7,245 contracts in the speculator bets.
The US Dollar Index speculator position comes in as this week’s fourth most bearish extreme standing with the USD Index speculator level now at 6 percent score of its 3-year range.
The six-week trend for the speculator strength score was -7 points this week. The speculator position was -546 net contracts this week with a small advance of 69 contracts in the weekly speculator bets.
Finally, the Bitcoin speculator position comes in as the fifth most bearish extreme standing for this week. The Bitcoin speculator level is at a 9 percent score of its 3-year range.
The six-week trend for the speculator strength score was -72 points this week. The speculator position was -1,952 net contracts this week with a decrease by -1,125 contracts in the weekly speculator bets.
Article By InvestMacro – Receive our weekly COT Newsletter
*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.
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