Financial News

Archive for Financial News – Page 173

Israel-Hamas war spooks markets as investors urged to avoid knee-jerk

By George Prior

Oil prices surged by 5% following Hamas’ unexpected attack on Israel over the weekend, but investors need to avoid knee-jerk reactions, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The warning from Nigel Green of deVere Group comes as global investors digest the news that the Palestinian Islamist group Hamas on Saturday launched the largest military assault on Israel in decades, killing hundreds of Israelis and triggering a wave of retaliatory Israeli air strikes on the Gaza Strip.

Heading into the third day, the death toll was 1,100, while the US said it was sending warships to the region.

The deVere CEO says: “The events in this region are now directly impacting financial markets worldwide, which, as ever in times of increased volatility, is immediately prompting some investors into selling off riskier parts of their portfolios, such as stocks and some currencies.

“Oil has a disproportionate impact on global financial markets due to its pivotal role in the world economy, its interconnectedness with various sectors, and its potential to influence broader economic conditions and investor sentiment.

“I would urge investors to avoid knee-jerk reactions to the oil price surge and geopolitical tensions that are creating the market turbulence.

“Investors are likely to profit by sitting still and not selling and then having to buy back at higher prices.”

He continues: “Indeed, savvy investors, including the likes of Warren Buffett, will likely use the volatility and lower entry points to top-up their portfolios for the long-term with high quality stocks that have robust fundamentals.”

Ensure your investment portfolio is diversified across various asset classes, such as stocks, bonds, and commodities. “Diversification is your best weapon to mitigate the risks associated with geopolitical events,” observes Nigel Green.

He also recommends that you keep a close eye on energy-related stocks and companies, as they are likely to be directly impacted by the fluctuating oil prices. Companies involved in oil production and exploration may benefit from higher prices, while industries that rely heavily on energy consumption may face challenges.

“While short-term market fluctuations can be unsettling, it’s essential to maintain a long-term perspective when making investment decisions. Historically, markets have rebounded from geopolitical crises, and a well-constructed portfolio can weather such storms,” he concludes.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

Economics & Fundamentals Financial News

09 Oct

Geopolitical risk returns with renewed vigor

By JustMarkets

As of Friday’s stock market close, the Dow Jones Index (US30) increased by 0.87% (week-to-date -0.14%), while the S&P 500 Index (US500) added 1.18% (week-to-date +0.56%). The NASDAQ Technology Index (US100) closed positive 1.60% (week-to-date +1.61%) on Friday. Stock indexes rose sharply on Friday despite a strong Nonfarm Payrolls report. Stocks retreated initially Friday morning, with the Dow Jones Industrials Index falling to a 4-month low after bond yields jumped on the back of a 336,000 increase in US employment numbers. Additionally, August employment data was revised upward by 40,000 to 227,000 from the originally announced 187,000. The unemployment rate for September was unchanged at 3.8%. But a short time later, stocks returned to the upside amid a falling dollar. The US consumer credit for August unexpectedly contracted by $15.62 billion, the largest decline in 3 years and weaker than expectations for a $11.70 billion increase.

Canada’s labor market beat expectations for the third consecutive month, and wage growth accelerated. The country added 63,800 jobs in September, and the unemployment rate was 5.5%, where it has been since July. The data beat expectations for a modest gain of 20,000 jobs and an unemployment rate of 5.6%. Workers’ compensation growth rose to 5.3%, also beating expectations of 5.1% and up from 5.2% a month earlier. This is the third consecutive month of accelerating growth. The data suggests that even in the face of rising interest rates, the economy continues to expand jobs and wage growth strongly. Overnight swap traders raised bets on further policy tightening by the Bank of Canada, with another 25 basis point rate hike expected by March 2024.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 1.06% (-1.36% for the week), the French CAC 40 (FR40) gained 0.88% (-1.45% for the week), the Spanish IBEX 35 (ES35) added 0.78% (-2.31% for the week), the British FTSE 100 (UK100) closed up by 0.58% (-1.49% for the week).

ECB Executive Board spokesperson Schnabel said on Friday, “I still see upside risks to inflation, and if they materialize, further interest rate hikes may be necessary.” European Central Bank President Christine Lagarde said in an interview published Sunday that she was confident the ECB would meet its inflation target of 2% and was relatively confident about Europe’s gas reserves situation.

On Saturday, militants from the Palestinian group Hamas launched an unprecedented attack on Israel. The number of Israelis killed since the attack began totaled more than 700, and another 750 were reported missing. In response, Israel imposed a state of war for the first time since 1973. The country’s leadership enacted a special clause, “40 alef,” which means a formal declaration of war and that the army is given full freedom of action. The Hamas attack was openly welcomed by Iran and the Lebanese group Hezbollah, an ally of Iran. Western countries, led by the US, condemned the attack and declared their support for Israel. The aftermath of the outbreak of the war between Israel and Hamas was reflected in the stock markets of Middle Eastern countries on Sunday. Israel’s TA-35 stock index, calculated in Tel Aviv, ended the session down about 7%, mainly due to a drop in bank stocks. It was the sharpest market decline in three years. Analysts say the impact on the Gulf and Middle East markets depends on whether the conflict spreads. If so, it will increase uncertainty in the markets, inflation, and economic growth will take a back seat to geopolitical risk. Analysts say rising geopolitical risk could lead to the buying of assets such as gold and the US dollar and potentially boost demand for US Treasuries. The dollar, considered a safe haven in tough times, rose against the euro and pound sterling in early trading. Gold also showed the gap up.

Over the past week, Brent Crude fell about 11%, and WTI crude fell more than 8% amid concerns that continued high interest rates will lead to a slowdown in global economic growth, which in turn will affect fuel demand. On Sunday, Bahrain, Iraq, Kuwait, Oman, Oman, Saudi Arabia, and the United Arab Emirates reaffirmed their commitment to “collective and individual voluntary adjustments” in oil production levels. In other words, OPEC+ countries may resort to further supply cuts if oil prices continue to decline.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 3.45% for the week, China’s FTSE China A50 (CHA50) did not trade all week due to holidays, Hong Kong’s Hang Seng (HK50) ended the week up by 0.01%, and Australia’s ASX 200 (AU200) ended the week negative by 1.34%.

US-listed Chinese stocks rose on Friday after it was reported that spending on Chinese internet platforms during the Golden Week holiday exceeded pre-pandemic levels. As a result, shares of PDD Holdings (PDD) rose more than 7% and led the Nasdaq 100 stock price gains. JD.com (JD) and Baidu (BIDU) also rose more than 3%. In addition, shares of Alibaba Group Holding (BABA) rose more than 2%.

S&P 500 (F)(US500) 4,308.50 +50.31 (+1.18%)

Dow Jones (US30) 33,407.58 +288.01 (+0.87%)

DAX (DE40) 15,229.77 +159.55 (+1.06%)

FTSE 100 (UK100) 7,494.58 +43.04 (+0.58%)

USD Index 106.10 −0.23 (−0.22%)

News feed for 2023.10.09:

– German Industrial Production (m/m) at 09:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News

09 Oct

Trade Of The Week: Oil surges on Middle East tensions

By ForexTime

Oil surges over 5% on geopolitical uncertainty
Middle East tensions fuel concerns over crude supplies
Keep eye on OPEC/EIA monthly report
Brent gaps higher but still under pressure on D1 chart
Keep eye on $89.70 dynamic resistance level

Oil prices were in sharp focus on Monday after surging on geopolitical tensions following the weekend attack on Israel.

Brent initially soared more than 5%, recovering a chunk of last week’s hefty losses on fears that Hama’s surprise attack on Israel may deepen tensions across the Middle East. Given how this negative development is likely to fuel concerns over crude supplies, oil bulls could jump back into the game.

Looking at the technical picture, Brent remains under pressure on the weekly charts. However, a strong weekly close back above the $89.70 level may provide an opportunity for bulls to re-challenge $95.00.

This promises to be a wild week for oil and here are 3 reasons why:

1. Middle East tensions

The developments over the weekend have sparked geopolitical uncertainty and escalated tensions in the Middle East, home to almost a third of global supply.

While neither Israel nor Palestine are major oil producers, there are concerns that the conflict could spread through the region – resulting in major supply disruptions. The risk of the conflict evolving into a proxy war, involving the US and Iran has also raised the risks of more supply shocks amid tightening of sanctions. It is worth keeping in mind that Iran is not only a supporter of Hamas but one of the world’s largest oil producers.

Should tension continue to escalate between Israel and Palestine, this could support oil prices as geopolitical uncertainty fuels fears around oil supply.
Any signs of easing geopolitical tensions may offer an opportunity for oil prices to close the gap created over the weekend.

2. OPEC/EIA oil monthly report

Investors will be keeping a close eye on the monthly oil market reports from both the International Energy Agency (EIA) and the Organization of Petroleum Exporting Countries (OPEC) on Thursday.

It is worth noting that oil prices had tumbled aggressively this month, shedding over 8% before the attack on Israel. The global commodity was pressured by concerns over higher interest rates and slowing growth dampening the demand outlook. The monthly reports will be scrutinized for fresh insight into the outlook for crude oil as the final quarter of 2023 gets underway.

While the oil market reports have the potential to influence prices, crude is likely to remain heavily influenced by geopolitical risk this week.

3.Technical forces

After concluding last week on an aggressively bearish note, Brent has gapped up with prices smashing into the 50-day SMA. Despite the sharp move to the upside, bears remain in a position of power below the 89.70 dynamic resistance level.

Sustained weakness below $89.70 could encourage a decline back towards $85.20 and the 100-day SMA at $83.00.
Should prices experience a strong breakout above $89.70, this may open the doors towards $92.80 and $96.10, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Energy Financial News

08 Oct

COT Metals Charts: Speculator Bets led by Copper & Steel

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday October 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Copper & Steel

The COT metals markets speculator bets were mixed this week as three out of the six metals markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the metals was Copper (6,867 contracts) with Steel (732 contracts) and Palladium (584 contracts) also showing positive weeks.

The markets with declines in speculator bets for the week were Gold (-24,589 contracts) with Silver (-4,761 contracts) and Platinum (-4,710 contracts) also having lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Oct-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	431,226	4	91,226	17	-111,982	81	20,756	32
Silver	125,847	14	15,344	40	-30,358	57	15,014	50
Copper	208,795	49	-21,912	12	19,952	88	1,960	31
Palladium	18,421	86	-9,718	9	9,861	93	-143	33
Platinum	81,529	85	2,616	22	-7,514	78	4,898	34

Strength Scores led by Steel & Silver

On the downside, Palladium (9 percent), Copper (12 percent) and Gold (17 percent) come in at the lowest strength levels currently and are all in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (17.2 percent) vs Gold previous week (28.0 percent)
Silver (40.1 percent) vs Silver previous week (46.9 percent)
Copper (11.9 percent) vs Copper previous week (6.0 percent)
Platinum (21.6 percent) vs Platinum previous week (32.5 percent)
Palladium (8.8 percent) vs Palladium previous week (4.9 percent)
Steel (65.4 percent) vs Palladium previous week (62.9 percent)

Silver & Platinum top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Silver (4 percent) and Platinum (4 percent) lead the past six weeks trends for metals.

Steel (-6 percent), Gold (-5 percent) and Palladium (-2 percent) lead the downside trend scores currently.

Move Statistics:
Gold (-4.7 percent) vs Gold previous week (-2.3 percent)
Silver (3.5 percent) vs Silver previous week (17.5 percent)
Copper (2.3 percent) vs Copper previous week (-2.7 percent)
Platinum (4.1 percent) vs Platinum previous week (16.9 percent)
Palladium (-2.4 percent) vs Palladium previous week (-6.0 percent)
Steel (-5.8 percent) vs Steel previous week (-8.9 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week came in at a net position of 91,226 contracts in the data reported through Tuesday. This was a weekly reduction of -24,589 contracts from the previous week which had a total of 115,815 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 17.2 percent. The commercials are Bullish-Extreme with a score of 80.7 percent and the small traders (not shown in chart) are Bearish with a score of 32.0 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	53.0	25.7	10.5
– Percent of Open Interest Shorts:	31.8	51.6	5.7
– Net Position:	91,226	-111,982	20,756
– Gross Longs:	228,406	110,666	45,256
– Gross Shorts:	137,180	222,648	24,500
– Long to Short Ratio:	1.7 to 1	0.5 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	17.2	80.7	32.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.7	3.5	4.2

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week came in at a net position of 15,344 contracts in the data reported through Tuesday. This was a weekly decrease of -4,761 contracts from the previous week which had a total of 20,105 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 40.1 percent. The commercials are Bullish with a score of 57.1 percent and the small traders (not shown in chart) are Bearish with a score of 49.9 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.8	30.0	22.6
– Percent of Open Interest Shorts:	28.7	54.1	10.6
– Net Position:	15,344	-30,358	15,014
– Gross Longs:	51,405	37,769	28,386
– Gross Shorts:	36,061	68,127	13,372
– Long to Short Ratio:	1.4 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.1	57.1	49.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.5	-7.9	22.9

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week came in at a net position of -21,912 contracts in the data reported through Tuesday. This was a weekly lift of 6,867 contracts from the previous week which had a total of -28,779 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.9 percent. The commercials are Bullish-Extreme with a score of 88.2 percent and the small traders (not shown in chart) are Bearish with a score of 30.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	33.2	41.1	7.6
– Percent of Open Interest Shorts:	43.7	31.5	6.7
– Net Position:	-21,912	19,952	1,960
– Gross Longs:	69,273	85,785	15,950
– Gross Shorts:	91,185	65,833	13,990
– Long to Short Ratio:	0.8 to 1	1.3 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	11.9	88.2	30.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	2.3	-2.1	-1.0

Platinum Futures:

The Platinum Futures large speculator standing this week came in at a net position of 2,616 contracts in the data reported through Tuesday. This was a weekly lowering of -4,710 contracts from the previous week which had a total of 7,326 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.6 percent. The commercials are Bullish with a score of 77.9 percent and the small traders (not shown in chart) are Bearish with a score of 33.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	55.8	27.5	10.8
– Percent of Open Interest Shorts:	52.6	36.8	4.8
– Net Position:	2,616	-7,514	4,898
– Gross Longs:	45,496	22,452	8,772
– Gross Shorts:	42,880	29,966	3,874
– Long to Short Ratio:	1.1 to 1	0.7 to 1	2.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	21.6	77.9	33.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.1	-2.5	-7.7

Palladium Futures:

The Palladium Futures large speculator standing this week came in at a net position of -9,718 contracts in the data reported through Tuesday. This was a weekly increase of 584 contracts from the previous week which had a total of -10,302 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 8.8 percent. The commercials are Bullish-Extreme with a score of 93.3 percent and the small traders (not shown in chart) are Bearish with a score of 33.1 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.8	59.9	8.6
– Percent of Open Interest Shorts:	74.5	6.4	9.4
– Net Position:	-9,718	9,861	-143
– Gross Longs:	4,007	11,038	1,588
– Gross Shorts:	13,725	1,177	1,731
– Long to Short Ratio:	0.3 to 1	9.4 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	8.8	93.3	33.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.4	1.1	11.5

Steel Futures Futures:

The Steel Futures large speculator standing this week came in at a net position of -5,487 contracts in the data reported through Tuesday. This was a weekly increase of 732 contracts from the previous week which had a total of -6,219 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 65.4 percent. The commercials are Bearish with a score of 35.4 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.2	85.9	1.1
– Percent of Open Interest Shorts:	37.0	56.4	1.7
– Net Position:	-5,487	5,606	-119
– Gross Longs:	1,560	16,354	214
– Gross Shorts:	7,047	10,748	333
– Long to Short Ratio:	0.2 to 1	1.5 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	65.4	35.4	19.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.8	5.7	3.2

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.

COT Updates Financial News Metals

08 Oct

COT Bonds Charts: Speculator Bets led lower by 2-Year & 5-Year Notes

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday October 3rd and shows a quick view of how large traders (for-profit speculators and commercial hedgers) were positioned in the futures markets.

Weekly Speculator Changes led lower by the 2-Year & 5-Year Bonds

The COT bond market speculator bets were lower this week as one out of the eight bond markets we cover had higher positioning while the other seven markets had lower speculator contracts.

Leading the gains for the bond markets was the Ultra Treasury Bonds with an increase by 5,305 contracts also showing positive on the week.

The bond markets with declines in speculator bets for the week were the 2-Year Bonds (-68,001 contracts), the 5-Year Bonds (-67,690 contracts), the Ultra 10-Year Bonds (-46,781 contracts), the Fed Funds (-34,081 contracts), the SOFR 3-Months (-24,840 contracts), the US Treasury Bonds (-6,835 contracts) and the 10-Year Bonds (-1,883 contracts) also seeing lower bets on the week.

Data Snapshot of Bond Market Traders | Columns Legend

Oct-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
SOFR-3-Months	9,830,949	92	292,306	88	-291,835	12	-471	88
FedFunds	1,665,599	60	-229,159	17	244,663	84	-15,504	61
2-Year	3,959,247	99	-1,278,301	0	1,141,551	100	136,750	100
Long T-Bond	1,409,347	93	-239,646	7	210,303	86	29,343	70
10-Year	4,782,725	93	-733,881	11	668,481	88	65,400	88
5-Year	5,630,744	93	-1,093,472	12	1,027,244	85	66,228	88

Strength Scores led by SOFR 3-Months & Ultra Treasury Bonds

On the downside, the Ultra 10-Year Bonds (0 percent), the 2-Year Bonds (0 percent), the US Treasury Bonds (7 percent), the 10-Year Bonds (11 percent), the 5-Year Bond (12 percent) and the Fed Funds (17 percent) come in at the lowest strength levels currently and all are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Fed Funds (16.8 percent) vs Fed Funds previous week (23.1 percent)
2-Year Bond (0.0 percent) vs 2-Year Bond previous week (5.0 percent)
5-Year Bond (12.1 percent) vs 5-Year Bond previous week (17.1 percent)
10-Year Bond (11.3 percent) vs 10-Year Bond previous week (11.5 percent)
Ultra 10-Year Bond (0.0 percent) vs Ultra 10-Year Bond previous week (9.0 percent)
US Treasury Bond (6.6 percent) vs US Treasury Bond previous week (8.8 percent)
Ultra US Treasury Bond (35.7 percent) vs Ultra US Treasury Bond previous week (33.5 percent)
SOFR 3-Months (87.6 percent) vs SOFR 3-Months previous week (89.1 percent)

Ultra Treasury Bonds & SOFR 3-Months top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Ultra Treasury Bonds (25 percent) and the SOFR 3-Months (14 percent) lead the past six weeks trends for bonds. The Fed Funds (10 percent) are the next highest positive movers in the latest data.

The US Treasury Bonds (-20 percent) and the Ultra 10-Year Bonds (-18 percent) lead the downside trend scores currently with the 5-Year Bonds (-4 percent) and the 10-Year Bonds (-4 percent) following next with lower trend scores.

Strength Trend Statistics:
Fed Funds (9.6 percent) vs Fed Funds previous week (9.0 percent)
2-Year Bond (-0.5 percent) vs 2-Year Bond previous week (-6.8 percent)
5-Year Bond (-3.7 percent) vs 5-Year Bond previous week (12.2 percent)
10-Year Bond (-3.8 percent) vs 10-Year Bond previous week (1.4 percent)
Ultra 10-Year Bond (-17.8 percent) vs Ultra 10-Year Bond previous week (-11.7 percent)
US Treasury Bond (-19.6 percent) vs US Treasury Bond previous week (-18.2 percent)
Ultra US Treasury Bond (25.5 percent) vs Ultra US Treasury Bond previous week (29.1 percent)
SOFR 3-Months (14.4 percent) vs SOFR 3-Months previous week (18.8 percent)

Secured Overnight Financing Rate (3-Month) Futures:

The Secured Overnight Financing Rate (3-Month) large speculator standing this week reached a net position of 292,306 contracts in the data reported through Tuesday. This was a weekly decrease of -24,840 contracts from the previous week which had a total of 317,146 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 87.6 percent. The commercials are Bearish-Extreme with a score of 12.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 87.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SOFR 3-Months Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.3	54.7	0.4
– Percent of Open Interest Shorts:	18.3	57.7	0.5
– Net Position:	292,306	-291,835	-471
– Gross Longs:	2,090,851	5,381,526	43,842
– Gross Shorts:	1,798,545	5,673,361	44,313
– Long to Short Ratio:	1.2 to 1	0.9 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	87.6	12.1	87.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	14.4	-14.6	1.6

30-Day Federal Funds Futures:

The 30-Day Federal Funds large speculator standing this week reached a net position of -229,159 contracts in the data reported through Tuesday. This was a weekly decline of -34,081 contracts from the previous week which had a total of -195,078 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.8 percent. The commercials are Bullish-Extreme with a score of 84.4 percent and the small traders (not shown in chart) are Bullish with a score of 60.6 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

30-Day Federal Funds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.6	75.5	2.0
– Percent of Open Interest Shorts:	21.4	60.8	2.9
– Net Position:	-229,159	244,663	-15,504
– Gross Longs:	127,197	1,258,150	33,455
– Gross Shorts:	356,356	1,013,487	48,959
– Long to Short Ratio:	0.4 to 1	1.2 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.8	84.4	60.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.6	-8.9	-6.2

2-Year Treasury Note Futures:

The 2-Year Treasury Note large speculator standing this week reached a net position of -1,278,301 contracts in the data reported through Tuesday. This was a weekly lowering of -68,001 contracts from the previous week which had a total of -1,210,300 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 99.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

2-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.8	80.6	7.1
– Percent of Open Interest Shorts:	43.1	51.8	3.6
– Net Position:	-1,278,301	1,141,551	136,750
– Gross Longs:	426,432	3,192,262	280,084
– Gross Shorts:	1,704,733	2,050,711	143,334
– Long to Short Ratio:	0.3 to 1	1.6 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	99.9	100.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.5	-0.1	3.5

5-Year Treasury Note Futures:

The 5-Year Treasury Note large speculator standing this week reached a net position of -1,093,472 contracts in the data reported through Tuesday. This was a weekly lowering of -67,690 contracts from the previous week which had a total of -1,025,782 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.1 percent. The commercials are Bullish-Extreme with a score of 85.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 87.5 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

5-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.0	82.7	7.2
– Percent of Open Interest Shorts:	28.4	64.5	6.0
– Net Position:	-1,093,472	1,027,244	66,228
– Gross Longs:	505,566	4,657,206	403,076
– Gross Shorts:	1,599,038	3,629,962	336,848
– Long to Short Ratio:	0.3 to 1	1.3 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	12.1	85.3	87.5
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.7	3.3	2.2

10-Year Treasury Note Futures:

The 10-Year Treasury Note large speculator standing this week reached a net position of -733,881 contracts in the data reported through Tuesday. This was a weekly decline of -1,883 contracts from the previous week which had a total of -731,998 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.3 percent. The commercials are Bullish-Extreme with a score of 88.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 87.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

10-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.3	78.0	9.2
– Percent of Open Interest Shorts:	25.6	64.0	7.8
– Net Position:	-733,881	668,481	65,400
– Gross Longs:	492,060	3,728,771	440,265
– Gross Shorts:	1,225,941	3,060,290	374,865
– Long to Short Ratio:	0.4 to 1	1.2 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	11.3	88.3	87.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-3.8	1.2	6.2

Ultra 10-Year Notes Futures:

The Ultra 10-Year Notes large speculator standing this week reached a net position of -244,907 contracts in the data reported through Tuesday. This was a weekly lowering of -46,781 contracts from the previous week which had a total of -198,126 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 95.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 89.7 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Ultra 10-Year Notes Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.7	77.3	11.6
– Percent of Open Interest Shorts:	21.7	62.2	13.8
– Net Position:	-244,907	285,820	-40,913
– Gross Longs:	165,441	1,462,117	220,058
– Gross Shorts:	410,348	1,176,297	260,971
– Long to Short Ratio:	0.4 to 1	1.2 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	95.4	89.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.8	7.0	35.5

US Treasury Bonds Futures:

The US Treasury Bonds large speculator standing this week reached a net position of -239,646 contracts in the data reported through Tuesday. This was a weekly fall of -6,835 contracts from the previous week which had a total of -232,811 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.6 percent. The commercials are Bullish-Extreme with a score of 85.6 percent and the small traders (not shown in chart) are Bullish with a score of 69.8 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	5.7	80.2	13.2
– Percent of Open Interest Shorts:	22.7	65.3	11.1
– Net Position:	-239,646	210,303	29,343
– Gross Longs:	79,998	1,130,603	186,481
– Gross Shorts:	319,644	920,300	157,138
– Long to Short Ratio:	0.3 to 1	1.2 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.6	85.6	69.8
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.6	26.0	-9.2

Ultra US Treasury Bonds Futures:

The Ultra US Treasury Bonds large speculator standing this week reached a net position of -368,142 contracts in the data reported through Tuesday. This was a weekly rise of 5,305 contracts from the previous week which had a total of -373,447 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.7 percent. The commercials are Bullish with a score of 61.4 percent and the small traders (not shown in chart) are Bullish with a score of 70.4 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Ultra US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.2	81.8	11.8
– Percent of Open Interest Shorts:	29.7	60.5	9.6
– Net Position:	-368,142	333,000	35,142
– Gross Longs:	96,190	1,278,994	184,419
– Gross Shorts:	464,332	945,994	149,277
– Long to Short Ratio:	0.2 to 1	1.4 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	35.7	61.4	70.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	25.5	-29.5	-2.2

Article By InvestMacro – Receive our weekly COT Newsletter

Bonds COT Updates Financial News

08 Oct

COT Soft Commodities Charts: Speculator Bets led by Cotton & Corn

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday October 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Cotton & Corn

The COT soft commodities markets speculator bets were lower this week as three out of the eleven softs markets we cover had higher positioning while the other eight markets had lower speculator contracts.

Leading the gains for the softs markets was Corn (10,996 contracts) with Cotton (10,382 contracts) and Soybean Oil (2,936 contracts) also showing positive weeks.

The markets with the declines in speculator bets this week were Soybeans (-23,985 contracts) with Sugar (-21,858 contracts), Soybean Meal (-19,769 contracts), Live Cattle (-8,766 contracts), Cocoa (-8,605 contracts) and Lean Hogs (-6,998 contracts), Coffee (-5,787 contracts) and Wheat (-1,333 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Oct-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,787,495	35	349,560	53	-381,946	50	32,386	45
Gold	431,226	4	91,226	17	-111,982	81	20,756	32
Silver	125,847	14	15,344	40	-30,358	57	15,014	50
Copper	208,795	49	-21,912	12	19,952	88	1,960	31
Palladium	18,421	86	-9,718	9	9,861	93	-143	33
Platinum	81,529	85	2,616	22	-7,514	78	4,898	34
Natural Gas	1,174,386	44	-79,200	40	61,763	64	17,437	22
Brent	118,926	0	-36,543	41	35,921	65	622	18
Heating Oil	330,825	48	38,946	93	-66,348	5	27,402	93
Soybeans	803,439	49	22,503	0	-5,880	95	-16,623	64
Corn	1,367,904	23	-107,544	2	140,803	98	-33,259	86
Coffee	210,215	25	-14,449	13	13,474	89	975	24
Sugar	820,468	30	217,382	68	-255,129	32	37,747	52
Wheat	429,333	83	-61,347	23	58,242	76	3,105	82

Strength Scores led by Cocoa & Live Cattle

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Cocoa (81 percent) and Live Cattle (72 percent) lead the softs markets this week. Sugar (68 percent), Cotton (52 percent) and Soybean Oil (48 percent) come in as the next highest in the weekly strength scores.

On the downside, Soybeans (0 percent), Corn (2 percent) and Coffee (13 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Corn (1.7 percent) vs Corn previous week (0.0 percent)
Sugar (67.7 percent) vs Sugar previous week (75.5 percent)
Coffee (12.6 percent) vs Coffee previous week (18.5 percent)
Soybeans (0.0 percent) vs Soybeans previous week (9.2 percent)
Soybean Oil (47.7 percent) vs Soybean Oil previous week (46.0 percent)
Soybean Meal (37.5 percent) vs Soybean Meal previous week (48.5 percent)
Live Cattle (72.1 percent) vs Live Cattle previous week (81.5 percent)
Lean Hogs (22.2 percent) vs Lean Hogs previous week (28.0 percent)
Cotton (52.5 percent) vs Cotton previous week (44.7 percent)
Cocoa (81.3 percent) vs Cocoa previous week (90.1 percent)
Wheat (23.2 percent) vs Wheat previous week (24.1 percent)

Cotton & Sugar top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Cotton (17 percent) and Sugar (11 percent) lead the past six weeks trends for soft commodities. Coffee (9 percent), Live Cattle (6 percent) and Lean Hogs (1 percent) are the next highest positive movers in the latest trends data.

Wheat (-19 percent) leads the downside trend scores currently with Soybeans (-17 percent), Soybean Meal (-9 percent) and Corn (-8 percent) following next with lower trend scores.

Strength Trend Statistics:
Corn (-8.4 percent) vs Corn previous week (-13.7 percent)
Sugar (11.4 percent) vs Sugar previous week (16.9 percent)
Coffee (8.8 percent) vs Coffee previous week (10.3 percent)
Soybeans (-16.8 percent) vs Soybeans previous week (-7.3 percent)
Soybean Oil (-0.4 percent) vs Soybean Oil previous week (-1.2 percent)
Soybean Meal (-9.0 percent) vs Soybean Meal previous week (-2.9 percent)
Live Cattle (5.7 percent) vs Live Cattle previous week (4.8 percent)
Lean Hogs (1.1 percent) vs Lean Hogs previous week (7.1 percent)
Cotton (16.9 percent) vs Cotton previous week (5.3 percent)
Cocoa (-7.2 percent) vs Cocoa previous week (1.4 percent)
Wheat (-18.9 percent) vs Wheat previous week (-20.0 percent)

Individual Soft Commodities Markets:

CORN Futures:

The CORN large speculator standing this week reached a net position of -107,544 contracts in the data reported through Tuesday. This was a weekly increase of 10,996 contracts from the previous week which had a total of -118,540 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.7 percent. The commercials are Bullish-Extreme with a score of 98.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.6 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

CORN Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.6	49.2	10.0
– Percent of Open Interest Shorts:	28.4	38.9	12.5
– Net Position:	-107,544	140,803	-33,259
– Gross Longs:	281,318	672,709	137,063
– Gross Shorts:	388,862	531,906	170,322
– Long to Short Ratio:	0.7 to 1	1.3 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.7	98.4	85.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.4	6.7	21.7

SUGAR Futures:

The SUGAR large speculator standing this week reached a net position of 217,382 contracts in the data reported through Tuesday. This was a weekly lowering of -21,858 contracts from the previous week which had a total of 239,240 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.7 percent. The commercials are Bearish with a score of 31.7 percent and the small traders (not shown in chart) are Bullish with a score of 51.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SUGAR Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	37.2	39.0	10.4
– Percent of Open Interest Shorts:	10.7	70.1	5.8
– Net Position:	217,382	-255,129	37,747
– Gross Longs:	305,051	320,294	85,730
– Gross Shorts:	87,669	575,423	47,983
– Long to Short Ratio:	3.5 to 1	0.6 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	67.7	31.7	51.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.4	-11.8	8.9

COFFEE Futures:

The COFFEE large speculator standing this week reached a net position of -14,449 contracts in the data reported through Tuesday. This was a weekly decline of -5,787 contracts from the previous week which had a total of -8,662 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.6 percent. The commercials are Bullish-Extreme with a score of 89.3 percent and the small traders (not shown in chart) are Bearish with a score of 24.4 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

COFFEE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.7	45.8	4.8
– Percent of Open Interest Shorts:	32.5	39.4	4.3
– Net Position:	-14,449	13,474	975
– Gross Longs:	53,926	96,217	10,119
– Gross Shorts:	68,375	82,743	9,144
– Long to Short Ratio:	0.8 to 1	1.2 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	12.6	89.3	24.4
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	8.8	-8.9	4.5

SOYBEANS Futures:

The SOYBEANS large speculator standing this week reached a net position of 22,503 contracts in the data reported through Tuesday. This was a weekly fall of -23,985 contracts from the previous week which had a total of 46,488 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 94.8 percent and the small traders (not shown in chart) are Bullish with a score of 64.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SOYBEANS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.4	50.9	6.5
– Percent of Open Interest Shorts:	12.6	51.6	8.6
– Net Position:	22,503	-5,880	-16,623
– Gross Longs:	123,800	408,742	52,183
– Gross Shorts:	101,297	414,622	68,806
– Long to Short Ratio:	1.2 to 1	1.0 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	94.8	64.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-16.8	14.6	3.3

SOYBEAN OIL Futures:

The SOYBEAN OIL large speculator standing this week reached a net position of 50,941 contracts in the data reported through Tuesday. This was a weekly boost of 2,936 contracts from the previous week which had a total of 48,005 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 47.7 percent. The commercials are Bullish with a score of 51.2 percent and the small traders (not shown in chart) are Bearish with a score of 49.8 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

SOYBEAN OIL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.2	46.9	7.4
– Percent of Open Interest Shorts:	11.0	61.4	5.0
– Net Position:	50,941	-60,657	9,716
– Gross Longs:	96,922	195,665	30,768
– Gross Shorts:	45,981	256,322	21,052
– Long to Short Ratio:	2.1 to 1	0.8 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	47.7	51.2	49.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.4	0.7	-2.4

SOYBEAN MEAL Futures:

The SOYBEAN MEAL large speculator standing this week reached a net position of 64,775 contracts in the data reported through Tuesday. This was a weekly lowering of -19,769 contracts from the previous week which had a total of 84,544 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 37.5 percent. The commercials are Bullish with a score of 66.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 17.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

SOYBEAN MEAL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.4	43.6	8.9
– Percent of Open Interest Shorts:	8.5	60.5	5.9
– Net Position:	64,775	-78,589	13,814
– Gross Longs:	104,312	203,000	41,307
– Gross Shorts:	39,537	281,589	27,493
– Long to Short Ratio:	2.6 to 1	0.7 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.5	66.0	17.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.0	10.5	-11.9

LIVE CATTLE Futures:

The LIVE CATTLE large speculator standing this week reached a net position of 86,338 contracts in the data reported through Tuesday. This was a weekly reduction of -8,766 contracts from the previous week which had a total of 95,104 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.1 percent. The commercials are Bearish with a score of 34.5 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.6 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

LIVE CATTLE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	44.8	30.4	8.4
– Percent of Open Interest Shorts:	16.9	53.7	12.9
– Net Position:	86,338	-72,244	-14,094
– Gross Longs:	138,419	93,825	25,803
– Gross Shorts:	52,081	166,069	39,897
– Long to Short Ratio:	2.7 to 1	0.6 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.1	34.5	14.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.7	-1.6	-21.2

LEAN HOGS Futures:

The LEAN HOGS large speculator standing this week reached a net position of -9,091 contracts in the data reported through Tuesday. This was a weekly fall of -6,998 contracts from the previous week which had a total of -2,093 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.2 percent. The commercials are Bullish with a score of 79.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 80.4 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

LEAN HOGS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.2	37.8	10.5
– Percent of Open Interest Shorts:	34.0	32.7	10.8
– Net Position:	-9,091	9,750	-659
– Gross Longs:	55,656	72,012	19,895
– Gross Shorts:	64,747	62,262	20,554
– Long to Short Ratio:	0.9 to 1	1.2 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.2	79.1	80.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.1	-3.2	10.1

COTTON Futures:

The COTTON large speculator standing this week reached a net position of 58,162 contracts in the data reported through Tuesday. This was a weekly gain of 10,382 contracts from the previous week which had a total of 47,780 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 52.5 percent. The commercials are Bearish with a score of 45.3 percent and the small traders (not shown in chart) are Bullish with a score of 66.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

COTTON Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	35.2	42.6	6.5
– Percent of Open Interest Shorts:	12.0	69.0	3.2
– Net Position:	58,162	-66,471	8,309
– Gross Longs:	88,465	107,180	16,235
– Gross Shorts:	30,303	173,651	7,926
– Long to Short Ratio:	2.9 to 1	0.6 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	52.5	45.3	66.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	16.9	-15.0	-2.4

COCOA Futures:

The COCOA large speculator standing this week reached a net position of 69,933 contracts in the data reported through Tuesday. This was a weekly decrease of -8,605 contracts from the previous week which had a total of 78,538 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.3 percent. The commercials are Bearish-Extreme with a score of 18.9 percent and the small traders (not shown in chart) are Bearish with a score of 25.8 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

COCOA Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.3	29.7	4.5
– Percent of Open Interest Shorts:	16.7	55.4	3.5
– Net Position:	69,933	-72,861	2,928
– Gross Longs:	117,419	84,488	12,822
– Gross Shorts:	47,486	157,349	9,894
– Long to Short Ratio:	2.5 to 1	0.5 to 1	1.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	81.3	18.9	25.8
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-7.2	7.3	-2.0

WHEAT Futures:

The WHEAT large speculator standing this week reached a net position of -61,347 contracts in the data reported through Tuesday. This was a weekly decline of -1,333 contracts from the previous week which had a total of -60,014 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.2 percent. The commercials are Bullish with a score of 75.5 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

WHEAT Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.6	33.8	9.0
– Percent of Open Interest Shorts:	42.9	20.2	8.3
– Net Position:	-61,347	58,242	3,105
– Gross Longs:	122,733	144,907	38,732
– Gross Shorts:	184,080	86,665	35,627
– Long to Short Ratio:	0.7 to 1	1.7 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	23.2	75.5	81.6
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-18.9	19.6	8.1

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Financial News Soft Commodities

08 Oct

COT Stock Market Charts: Speculator Bets led by VIX & S&P500

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday October 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by VIX & S&P500-Mini

The COT stock markets speculator bets were higher this week as five out of the seven stock markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the stock markets was the VIX (18,642 contracts) with the S&P500-Mini (16,046 contracts), the MSCI EAFE-Mini (6,365 contracts), the Nasdaq-Mini (589 contracts) and the Nikkei 225 (567 contracts) also showing positive weeks.

The leading market with the declines in speculator bets this week was the DowJones-Mini (-10,829 contracts) with the Russell-Mini (-1,706 contracts) also recording lower bets on the week.

Data Snapshot of Stock Market Traders | Columns Legend

Oct-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
S&P500-Mini	2,138,034	15	-73,235	54	46,115	46	27,120	48
Nikkei 225	16,376	17	-43	66	-1,058	29	1,101	42
Nasdaq-Mini	254,924	41	1,435	41	1,646	47	-3,081	59
DowJones-Mini	100,823	65	-32,447	0	29,549	94	2,898	58
VIX	381,162	63	-34,193	94	40,533	6	-6,340	64
Nikkei 225 Yen	52,277	40	3,042	43	8,418	34	-11,460	70

Strength Scores led by VIX & Nikkei 225

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the VIX (94 percent) and the Nikkei 225 (66 percent) lead the stock markets this week. The S&P500-Mini (54 percent) and Nikkei 225 Yen (43 percent) come in as the next highest in the weekly strength scores.

On the downside, the DowJones-Mini (0 percent) comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent). The next lowest strength score is the Russell-Mini (34 percent).

Strength Statistics:
VIX (94.0 percent) vs VIX previous week (80.4 percent)
S&P500-Mini (53.8 percent) vs S&P500-Mini previous week (51.4 percent)
DowJones-Mini (0.0 percent) vs DowJones-Mini previous week (26.0 percent)
Nasdaq-Mini (41.1 percent) vs Nasdaq-Mini previous week (40.2 percent)
Russell2000-Mini (34.0 percent) vs Russell2000-Mini previous week (35.0 percent)
Nikkei USD (66.4 percent) vs Nikkei USD previous week (62.4 percent)
EAFE-Mini (37.9 percent) vs EAFE-Mini previous week (31.7 percent)

S&P500-Mini & Nikkei 225 top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the S&P500-Mini (9 percent) leads the past six weeks trends for the stock markets. The Nikkei 225 (3 percent) and the MSCI EAFE-Mini (1 percent) are the next highest positive movers in the latest trends data.

The DowJones-Mini (-43 percent) leads the downside trend scores currently with the Nasdaq-Mini (-19 percent) coming in as the next market with lower trend scores.

Strength Trend Statistics:
VIX (-4.7 percent) vs VIX previous week (-19.6 percent)
S&P500-Mini (9.0 percent) vs S&P500-Mini previous week (4.3 percent)
DowJones-Mini (-42.6 percent) vs DowJones-Mini previous week (-44.2 percent)
Nasdaq-Mini (-19.1 percent) vs Nasdaq-Mini previous week (-6.7 percent)
Russell2000-Mini (-0.9 percent) vs Russell2000-Mini previous week (5.8 percent)
Nikkei USD (3.0 percent) vs Nikkei USD previous week (0.6 percent)
EAFE-Mini (0.5 percent) vs EAFE-Mini previous week (-1.8 percent)

Individual Stock Market Charts:

VIX Volatility Futures:

The VIX Volatility large speculator standing this week resulted in a net position of -34,193 contracts in the data reported through Tuesday. This was a weekly rise of 18,642 contracts from the previous week which had a total of -52,835 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 94.0 percent. The commercials are Bearish-Extreme with a score of 6.5 percent and the small traders (not shown in chart) are Bullish with a score of 63.6 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

VIX Volatility Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.9	46.7	6.4
– Percent of Open Interest Shorts:	33.8	36.1	8.1
– Net Position:	-34,193	40,533	-6,340
– Gross Longs:	94,830	178,112	24,423
– Gross Shorts:	129,023	137,579	30,763
– Long to Short Ratio:	0.7 to 1	1.3 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	94.0	6.5	63.6
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.7	6.5	-13.3

S&P500 Mini Futures:

The S&P500 Mini large speculator standing this week resulted in a net position of -73,235 contracts in the data reported through Tuesday. This was a weekly gain of 16,046 contracts from the previous week which had a total of -89,281 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.8 percent. The commercials are Bearish with a score of 46.3 percent and the small traders (not shown in chart) are Bearish with a score of 48.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

S&P500 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.2	74.0	11.8
– Percent of Open Interest Shorts:	14.6	71.8	10.5
– Net Position:	-73,235	46,115	27,120
– Gross Longs:	239,442	1,582,012	252,547
– Gross Shorts:	312,677	1,535,897	225,427
– Long to Short Ratio:	0.8 to 1	1.0 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	53.8	46.3	48.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.0	-7.7	-1.8

Dow Jones Mini Futures:

The Dow Jones Mini large speculator standing this week resulted in a net position of -32,447 contracts in the data reported through Tuesday. This was a weekly decline of -10,829 contracts from the previous week which had a total of -21,618 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 93.8 percent and the small traders (not shown in chart) are Bullish with a score of 58.0 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Dow Jones Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	19.3	64.7	14.9
– Percent of Open Interest Shorts:	51.5	35.4	12.0
– Net Position:	-32,447	29,549	2,898
– Gross Longs:	19,480	65,200	15,041
– Gross Shorts:	51,927	35,651	12,143
– Long to Short Ratio:	0.4 to 1	1.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	93.8	58.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-42.6	35.7	0.6

Nasdaq Mini Futures:

The Nasdaq Mini large speculator standing this week resulted in a net position of 1,435 contracts in the data reported through Tuesday. This was a weekly boost of 589 contracts from the previous week which had a total of 846 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 41.1 percent. The commercials are Bearish with a score of 46.8 percent and the small traders (not shown in chart) are Bullish with a score of 58.6 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend. The current action for the model is considered to be: Hold – Maintain Long Position.

Nasdaq Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.9	57.9	15.1
– Percent of Open Interest Shorts:	25.4	57.2	16.3
– Net Position:	1,435	1,646	-3,081
– Gross Longs:	66,087	147,544	38,421
– Gross Shorts:	64,652	145,898	41,502
– Long to Short Ratio:	1.0 to 1	1.0 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	41.1	46.8	58.6
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-19.1	20.5	-8.5

Russell 2000 Mini Futures:

The Russell 2000 Mini large speculator standing this week resulted in a net position of -63,308 contracts in the data reported through Tuesday. This was a weekly decrease of -1,706 contracts from the previous week which had a total of -61,602 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.0 percent. The commercials are Bullish with a score of 65.6 percent and the small traders (not shown in chart) are Bearish with a score of 29.3 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: New Sell – Short Position.

Russell 2000 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.5	83.7	5.3
– Percent of Open Interest Shorts:	22.5	70.8	5.1
– Net Position:	-63,308	62,415	893
– Gross Longs:	46,209	406,775	25,724
– Gross Shorts:	109,517	344,360	24,831
– Long to Short Ratio:	0.4 to 1	1.2 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.0	65.6	29.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.9	2.8	-10.9

Nikkei Stock Average (USD) Futures:

The Nikkei Stock Average (USD) large speculator standing this week resulted in a net position of -43 contracts in the data reported through Tuesday. This was a weekly rise of 567 contracts from the previous week which had a total of -610 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 66.4 percent. The commercials are Bearish with a score of 29.4 percent and the small traders (not shown in chart) are Bearish with a score of 42.2 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

Nikkei Stock Average Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.5	62.2	23.3
– Percent of Open Interest Shorts:	14.8	68.7	16.6
– Net Position:	-43	-1,058	1,101
– Gross Longs:	2,373	10,185	3,818
– Gross Shorts:	2,416	11,243	2,717
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	66.4	29.4	42.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.0	-2.7	0.3

MSCI EAFE Mini Futures:

The MSCI EAFE Mini large speculator standing this week resulted in a net position of -18,963 contracts in the data reported through Tuesday. This was a weekly boost of 6,365 contracts from the previous week which had a total of -25,328 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 37.9 percent. The commercials are Bullish with a score of 62.4 percent and the small traders (not shown in chart) are Bearish with a score of 34.7 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend. The current action for the model is considered to be: Hold – Maintain Short Position.

MSCI EAFE Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	8.7	87.9	2.9
– Percent of Open Interest Shorts:	13.6	83.9	2.0
– Net Position:	-18,963	15,418	3,545
– Gross Longs:	34,410	345,966	11,231
– Gross Shorts:	53,373	330,548	7,686
– Long to Short Ratio:	0.6 to 1	1.0 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.9	62.4	34.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	0.5	0.9	-7.2

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Financial News Stock Market News

06 Oct

Markets are expecting a strong Nonfarm Payrolls report. Natural gas prices jumped to an 8-month high

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.03%, while the S&P 500 Index (US500) lost 0.13%. The NASDAQ Technology Index (US100) closed negative 0.12% on Thursday. Weekly jobless claims rose less than expected, a sign of a strengthening labor market that is hawkish for Fed policy.

The US weekly initial jobless claims rose by 2,000 to 207,000, a sign of a resilient labor market versus expectations of 210,000.

Today, market attention will focus on the monthly US Nonfarm Payrolls employment report, which is expected to show a 170,000 increase and a 0.1 decline in the September unemployment rate to 3.7%. A stronger-than-expected reading would indicate a strong and resilient labor market. In turn, this would emphasize the Fed’s stance of “holding rates longer,” and this would directly pressure risk assets such as the euro, pound, stock indices, and even gold. But any hints of a slowing labor market or any unexpected jumps in unemployment will be seen as a negative interest rate impact by the economy, which will weaken the dollar, lower government bond yields, and put confidence back into risk assets, gold, and indices.

Markets are currently pricing in a 22% probability that the FOMC will raise rates by 25 bps at its next meeting on November 1 and a 35% probability that the rate will be raised by 25 bps at its December 13 meeting.

The Canadian dollar rose in September despite the overall strengthening of the US dollar. Given that the Bank of Canada (BoC) left the rate unchanged in early September and expressed concerns about the sustainability of core inflation, it is clear that the Bank of Canada has a desire to keep the possibility of an additional rate hike alive.

Equity markets in Europe traded flat on Thursday. Germany’s DAX (DE40) fell by 0.20%, France’s CAC 40 (FR40) closed around the opening price, Spain’s IBEX 35 (ES35) added 0.67%, and the UK’s FTSE 100 (UK100) closed positive by 0.53%. ECB Vice President de Guindos said yesterday that with inflation still high, it is “premature” to discuss the possibility of cutting interest rates. Economists regard this stance by the ECB as hawkish. German exports fell by 1.2% m/m in August, worse than forecasts of 0.6% m/m. Imports in August also unexpectedly fell by 0.4% m/m vs. expectations of 0.5% m/m growth. Germany’s construction PMI for September fell by 2.2 to 39.3, the sharpest decline since the data series began in 2020. The economic outlook for the Eurozone’s largest economy remains sluggish.

Oil and gasoline prices continued to fall on Thursday, with oil falling to a 5-week low and gasoline falling to a 9-month low. Oil prices have been falling on concerns that slowing global growth will reduce energy demand and consumption. But a weaker dollar on Thursday limited the decline in energy prices. Tension in the oil market is expected to continue as the OPEC+ agreement to cut production is extended. Saudi Arabia recently said it will maintain its unilateral 1.0 million BPD oil production cut through December. The move will keep Saudi oil production at around 9 million BPD, the lowest in three years.

Natural gas prices jumped to an 8-month high on Thursday amid a smaller-than-expected rise in weekly natural gas inventories at the EIA. EIA natural gas inventories rose by 86 Bcf, below expectations of 94 Bcf. The natural gas market is also supported by forecasts that cooler temperatures in the US will increase demand for gas for heating. As of October 2, European natural gas storage inventories were 96% full, above the 5-year seasonal average of 88% for this time of year. The US natural gas inventories as of September 29 were 5.3% above the 5-year seasonal average.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) increased by 1.80% on Thursday, China’s FTSE China A50 (CHA50) will not trade for the rest of the week due to holidays, Hong Kong’s Hang Seng (HK50) added 0.10%, and Australia’s ASX200 (AU200) was positive by 0.51%.

S&P 500 (F)(US500) 4,258.19 −5.56 (−0.13%)

Dow Jones (US30) 33,119.57 −9.98 (−0.030%)

DAX (DE40) 15,070.22 −29.70 (−0.20%)

FTSE 100 (UK100) 7,451.54 +39.09 (+0.53%)

USD Index 106.35 −0.45 (−0.42%)

News feed for 2023.10.03:

– Australia Retail Sales (m/m) at 03:30 (GMT+3);
– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
– US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
– US Unemployment Rate (m/m) at 15:30 (GMT+3);
– Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
– US FOMC Member Waller Speaks (m/m) at 19:00 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

05 Oct

Big 3 Automaker Stellantis Invests $90M in Lithium Triangle Explorer

Source: Streetwise Reports (10/4/23)

Shares of this lithium explorer jumped after an announcement that big-three automaker Stellantis is investing US$90 million in the company. One analyst said other major companies are watching.

Shares of lithium explorer Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE) jumped 111% after it announced that big-three automaker Stellantis (formerly Chrysler) had invested US$90 million to acquire shares in the company.

The Stellantis umbrella includes iconic brands like Chrysler, Alfa Romeo, Citroen, Dodge, Fiat, Jeep, Maserati, and Peugeot. Under the agreement, Peugeot Citroen Argentina SA, a Stellantis subsidiary, will own 19.9% of the company’s issued and outstanding shares, and Argentina Lithium will own 80.1%.

Argentina Lithium President and Chief Executive Officer Nikolaos Cacos said it highlights the shortage approaching for the metal needed for electric vehicle (EV) batteries.

Stellantis is reaching down to exploration companies like Argentina Lithium to make sure they have the lithium needed “for the electric vehicle transition, which is coming fast and furious,” Cacos said in an interview with Proactive Investors.

Research Corp. analyst Sid Rajeev rated the stock a Buy with a fair value target price of CA$0.52.

The lithium market is expected to grow globally from US$37.8 billion in 2022 to US$89.9 billion in 2030, according to a report by Fortune Business Insights.

“The growing adoption of hybrid and electric vehicles (EVs), high-drain portable electronics, and energy storage systems has had a huge impact on the growth of the overall market,” the report said.

LIT’s share price went from CA$0.23 to CA$0.485 on the day of the announcement.

The news is also bound to attract the attention of other major companies.

“As LIT’s projects are close to well-known projects held by majors, the company can be subject to M&A events if it is able to delineate a resource in one or more of its assets,” noted Fundamental Research Corp. analyst Sid Rajeev while initiating coverage on the company in July.

Rajeev rated the stock a Buy with a fair value target price of CA$0.52.

After an advance late in September 2022, Technical Analyst Clive Maund noted that “something is going on” with the stock and that it should see a larger move.

The Catalyst: Fueling the New Green Economy

Cacos said having a partner like Stellantis validates the projects and the exploration work that Argentina Lithium has done so far in the Lithium Triangle to find the battery metal that could fuel the new green economy.

The company has acquired resource properties across the Americas, with a considerable focus on Argentina and the Lithium Triangle. Its current projects include Rincon West, Antofalla North, Pocitos, and Incahuasi.

After an advance late in September 2022, Technical Analyst Clive Maund noted that “something is going on” with the stock and that it should see a larger move.

The Rincon West Project includes three mining concessions covering 3,742 hectares at the Rincon Salar, west and north of Rio Tinto Plc’s (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) adjacent Rincon Project.

At its Antofalla North site, the firm controls 10,050 hectares 25 kilometers west of Salar de Hombre Muerto, the “Salt Pan of the Dead Man.”

The Pocitos property includes 26,000 hectares, the company said, and the company’s Incahuasi Project involves a 100% interest in 25,000 hectares of granted mineral rights properties in the Incahuasi Salar basin in Catamarca Province, Argentina.

Funding to Advance All Projects

Stellantis’ investment “allows us to not think about funding anymore as an exploration company,” Cacos said. “I think we can advance all our projects over the next three years, right up to the announcement, define resources and pre-feasibility studies just before, … (and) announcing making a decision or going forward and commercial production.”

After the issuance of exchange shares and at the close of the transaction, on or about October 4, Stellantis will own at most 19.9% of the common shares (on an undiluted basis) of Argentina Lithium, the company said.

The exchange agreement also provides Stellantis with observer rights to attend Argentina Lithium’s board meetings for as long as Stellantis owns at least 10% of the company and allows it to nominate one director to the Board of Directors.

The companies will enter into a lithium offtake agreement in which Stellantis will buy up to 15,000 tonnes per year of lithium produced by LIT over a seven-year period. The agreement may be extended by the companies.

The supply obligation of the agreement is conditional on the start of commercial lithium production at one or more of Argentina Lithium’s projects, as well as other terms, including Stellantis having a first right of first refusal on the sale of lithium products to third parties after production starts.

North American Demand to Drive Lithium Shortfalls

Lithium is a major component of EV batteries, where it is used as a cathode and electrolyte. The soft, silvery metal with highly reactive and flammable properties is also used to strengthen alloys, as a high-temperature lubricant, and as a drug to treat bipolar disorder.

Analysts from Eight Capital predicted that lithium market deficits will widen this decade, and the shortfalls will be driven by demand in North America.

The United States’ EV penetration of 6% lags China’s 26% and Europe’s 20%, analysts Anoop Prihar and Alex Riazanov of Eight Capital wrote in a recent research note. But President Joe Biden’s administration has committed to a target of 50% of new vehicle sales being EVs by 2030

“We estimate North American lithium nameplate production capacity will be 262,900 LCE (million tonnes lithium carbonate) in 2026 based on projects that currently have completed a Definitive Feasibility Study (DFS),” Prihar and Riazanov wrote.

Streetwise Ownership Overview*

Argentina Lithium & Energy Corp. (LIT:TSX.V; PNXLF:OTC; OAY3:FSE)

	Retail: 63%
	Strategic Investors: 37%

63%

37%

^*Share Structure as of 9/29/2023

“Although this is a significant increase from the current North American production capacity of 6,000 tonnes LCE, it’s still more than 128,000 tonnes short of what we anticipate will be required by the battery plants. As such, we anticipate the fundamentals underlying lithium demand to remain robust.”

Ownership and Share Structure

The company doesn’t officially share any information regarding management or institutional ownership, but Reuters reported that about 37% was owned by strategic institutions in the most recent reporting.

Its largest shareholders are Lithium Investment Partners LP with 17.68%, Jack Yetiv with 15.24%, Joseph J. Grosso with 3.05%, and the CEO Cacos with 1.04%, according to Reuters.

Its market cap is CA$59.83 million, with 130 million shares outstanding. It trades in a 52-week range of CA$0.60 and CA$0.19.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Argentina Lithium & Energy Corp.
Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

For additional disclosures, please click here.

Financial News Stock Market News

05 Oct

Interest rates: Monetary policy is always political as central banks opt to back the financial sector

By Dan Cohen, Queen’s University, Ontario; Emily Rosenman, Penn State, and Martine August, University of Waterloo

As the Bank of Canada prepared to announce its decision on interest rates in early September, Tiff Macklem, the bank’s governor, received imploring letters from premiers spanning both the country and the political spectrum.

New Democrat David Eby of British Columbia wrote to the Bank of Canada, followed by Ontario’s Doug Ford, a Conservative, and by Liberal Andrew Furey of Newfoundland and Labrador.

In their letters, the premiers urged the bank against raising rates again and to think of the “human impact of rate increases” on Canadians already burdened by rising mortgage payments and financial pain.

When Macklem announced he was holding the rate at five per cent, Finance Minister Chrystia Freeland called the decision “a welcome relief for Canadians.”

Facing subsequent accusations from economists and journalists that she was meddling, Freeland made clear a few hours later that she respected the independence of the Bank of Canada.

Social impact of monetary policy

But the criticism raises important questions. Is monetary policy really outside the realm of politics? What are the social ramifications of our current monetary policy system?

The view that central banks should be independent of politics has shifted many times over the history of central banks.

While central bank decision-making is independent from government, the banks follow mandates set by governments. These mandates vary in different countries.

The United States Federal Reserve (the Fed), for example, has a dual mandate: to manage inflation and pursue maximum stable employment. The Bank of Canada’s mandate, by contrast, is focused entirely on managing inflation, with an arbitrary target of two per cent.

In theory, central banks pursue these goals without interference from government.

But we don’t believe political debates over monetary policy should be off limits.

Ties between politics and monetary policy

In the 1970s, Fed chairman Paul Volcker famously used monetary policy — specifically a campaign of rapid interest rate increases — to erode the bargaining power of labour as a means of taming inflation.

That decision had wide-ranging effects — including a reduction in union membership — that continue to have an impact on American society and placed the burden of fighting inflation onto the working class.

This logic continues, crudely captured in a recent viral video when Australian real estate developer Tim Gurner argued:

“We need to see unemployment rise, we need to see pain in the economy … to remind people that they work for the employer, not the other way around.”

In more polite language, Phillip Lowe, outgoing governor of Australia’s central bank, recently acknowledged that the effects of monetary policy are “felt unevenly across the community.”

The scene in Canada

According to our research, monetary policy likewise has an impact on wealth inequality in Canada by supporting the financial sector over other parts of the economy.

Indeed, the overt goal of monetary policy is to stabilize the financial system, a priority that disproportionately benefits those in the financial sector.

This has become clear in recent decades, beginning with the 2008 global financial crisis and continuing to the COVID-19 pandemic, when central banks around the world began to use “quantitative easing” to stimulate the economy.

While monetary policy had previously centred on setting the rates at which regulated banks could borrow, central banks expanded their role by undertaking massive asset purchasing campaigns via quantitative easing.

Central banks began supporting not just regulated banks but investment funds, hedge funds and other “non-bank financial intermediaries” — also known as shadow banks — that are largely unregulated.

This involved tactics like purchasing corporate bonds to stabilize the corporate debt market.

Investors benefit

These new Bank of Canada policies grant “infrastructural power” over how monetary policy is implemented to the financial sector, buttressing the profits of investors with public dollars. This allows investors to determine how the capital provided by the bank will be invested — with little regulation or public oversight.

Acknowledging this shift, Bank of Canada deputy governor Toni Gravelle said the bank has moved from its traditional role as “lender of last resort” to “liquidity provider of last resort,” promising to “resolve market-wide stresses when the financial system cannot find its footing.”

When the working class cannot “find its footing,” however, the Bank of Canada doesn’t extend a helping hand. In 2022, for example, Macklem told employers not to increase wages despite rampant inflation, and told unionized workers not to ask for a raise.

The central bank’s decision to support the financial sector is, in fact, political. It benefits some — financial sector executives and investors — at the expense of others, and tilts economic decision-making in their favour.

When a public institution buys hundreds of billions in assets as the Bank of Canada did in March 2020, Canadians are right to ask questions about its impact, and politicians should respond.

Enriching the already rich

The premiers’ letters to the Bank of Canada, while described as unprecedented, expose how monetary policy involves fundamentally political questions about the distribution of wealth in our society.

As we demonstrated in our research, the Bank of Canada’s quantitative easing tactics during the pandemic had a vastly uneven impact, driving up house prices and enriching already wealthier homeowners, while lower-income households and renters faced higher rents and precarity.

It also helped investors who took advantage of cheap capital and rising asset values to scoop up multi-family apartments and houses in Canada.

The impact doesn’t stop at housing. As inflation rose, central banks hiked interest rates, assuming that would boost unemployment, reduce labour costs and slow the economy so that inflation would fall.

But at a time when the causes of inflation are highly contested (there are ongoing debates around supply chain disruptions and “sellers inflation,” for example) choosing to focus on wages is political.

What should central banks do?

Where does this leave us in terms of the politics of monetary policy and central bank independence?

While central bank decisions may need to be independent of government influence, the factors banks consider are determined by our political systems.

Central banks could consider factors that benefit workers and people who don’t own assets — from maximizing employment to promoting housing affordability and addressing climate change risks.

European Central Bank president Christine Lagarde, for example, has said climate change should factor into central bank decision-making.

Others argue monetary policy can be used to fund the green transition, building on the European Central Bank’s practice of using targeted loans to influence the financial sector rather than leaving decision-making in the hands of financial institutions.

Given the connection between monetary policy and inequality, it’s time for a serious debate on why central banks use public institutions to support private finance — and what they should be doing differently.

The authors would like to acknowledge and thank research assistant Yun Liu for her work on this article.

Dan Cohen, Assistant Professor, Queen’s University, Ontario; Emily Rosenman, Assistant Professor of Geography, Penn State, and Martine August, Associate Professor, School of Planning, University of Waterloo

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Bonds Economics & Fundamentals Financial News

Risk Disclosure: Foreign Currency trading and trading on margin carries a high level of risk and can result in loss of part or all of your investment. Due to the level of risk and market volatility, Foreign Currency trading may not be suitable for all investors and you should not invest money you cannot afford to lose. Before deciding to invest in the foreign currency exchange market you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with foreign currency exchange trading, and seek advice from an independent financial advisor should you have any doubts.

All information and opinions on this website are for general informational purposes only and do not constitute investment advice.