Archive for Opinions – Page 107

29 Nov

Graphene is a proven supermaterial, but manufacturing the versatile form of carbon at usable scales remains a challenge

By Kevin Wyss, Rice University 

“Future chips may be 10 times faster, all thanks to graphene”; “Graphene may be used in COVID-19 detection”; and “Graphene allows batteries to charge 5x faster” – those are just a handful of recent dramatic headlines lauding the possibilities of graphene. Graphene is an incredibly light, strong and durable material made of a single layer of carbon atoms. With these properties, it is no wonder researchers have been studying ways that graphene could advance material science and technology for decades.

I never know what to expect when I tell people I study graphene – some have never heard of it, while others have seen some version of these headlines and inevitably ask, “So what’s the holdup?”

Graphene is a fascinating material, just as the sensational headlines suggest, but it is only just starting be used in real-world applications. The problem lies not in graphene’s properties, but in the fact that it is still incredibly difficult and expensive to manufacture at commercial scales.

A black and white image of a crystalline layer on a surface.
Pure graphene is a uniform, single-atom-thick crystal of carbon arranged in a hexagonal pattern, as seen in this electron microscope image.
M.H. Gass/Wikimedia Commons, CC BY

What is graphene?

Graphene is most simply defined as a single layer of carbon atoms bonded together in a hexagonal, sheetlike structure. You can think of pure graphene as a one-layer-thick sheet of carbon tissue paper that happens to be the strongest material on Earth.

Graphene usually comes in the form of a powder made of small, individual sheets that are roughly the diameter of a grain of sand. An individual sheet of graphene is 200 times stronger than an equally thin piece of steel. Graphene is also extremely conductive, holds together at up to 1,300 degrees Fahrenheit (700 C), can withstand acids and is flexible and very lightweight.

Because of these properties, graphene could be extremely useful. The material can be used to create flexible electronics and to purify or desalinate water. And adding just 0.03 ounces (1 gram) of graphene to 11.5 pounds (5 kilograms) of cement increases the strength of the cement by 35%.

As of late 2022, Ford Motor Co., with which I worked as part of my doctoral research, is one of the the only companies to use graphene at industrial scales. Starting in 2018, Ford began making plastic for its vehicles that was 0.5% graphene – increasing the plastic’s strength by 20%.

Graphene has many incredible physical properties that arise from its one-atom-thick carbon structure.
AlexanderAlUS/Wikimedia Commons, CC BY-SA

How to make a supermaterial

Graphene is produced in two principal ways that can be described as either a top-down or bottom-up process.

The world’s first sheet of graphene was created in 2004 out of graphite. Graphite, commonly known as pencil lead, is composed of millions of graphene sheets stacked on top of one another. Top-down synthesis, also known as graphene exfoliation, works by peeling off the thinnest possible layers of carbon from graphite. Some of the earliest graphene sheets were made by using cellophane tape to peel off layers of carbon from a larger piece of graphite.

The problem is that the molecular forces holding graphene sheets together in graphite are very strong, and it’s hard to pull sheets apart. Because of this, graphene produced using top-down methods is often many layers thick, has holes or deformations, and can contain impurities. Factories can produce a few tons of mechanically or chemically exfoliated graphene per year, and for many applications – like mixing it into plastic – the lower-quality graphene works well.

A thin, folded, rough-edged piece of graphene.
Graphene flakes made from top-down methods are usually more than one atom thick and have impurities like folds and tears, as seen in this image.
Дагесян Саркис Арменакович/Wikimedia Commons, CC BY-SA

Top-down, exfoliated graphene is far from perfect, and some applications do need that pristine single sheet of carbon.

Bottom-up synthesis builds the carbon sheets one atom at a time over a few hours. This process – called vapor deposition – allows researchers to produce high-quality graphene that is one atom thick and up to 30 inches across. This yields graphene with the best possible mechanical and electrical properties. The problem is that with a bottom-up synthesis, it can take hours to make even 0.00001 gram – not nearly fast enough for any large scale uses like in flexible touch-screen electronics or solar panels, for example.

So what’s the holdup?

Current production methods of graphene, both top-down and bottom-up, are expensive as well as energy and resource intensive, and simply produce too little product, too slowly.

Some companies do manufacture graphene and sell it for US$60,000 to $200,000 per ton. There are a limited number of uses that make sense at these high costs.

While small amounts of top-down or bottom-up graphene can satisfy the needs of researchers, for companies even just the process of prototyping a new material, application or manufacturing process requires many pounds of graphene powder or hundreds of graphene sheets and a lot of time and effort. It took significant investment and more than four years of study, development and optimization before graphene hit the production line at Ford.

Current production can barely cover experimentation, much less widespread use.

Improving manufacturing

For a material that has been around since only 2004, a lot of progress has been made in scaling up the production and implementation of graphene.

There are hints that graphene is starting to break through at a commercial level. There are a huge number of graphene-related startups looking at a wide range of uses ranging from energy storage to composites to nerve stimulation. Major companies – such as Tesla, LG and chemical giant BASF – are also investigating how graphene could be used, in rechargeable batteries, flexible or wearable electronics and next-generation materials.

Graphene is ripe for a breakthrough that will bring down the cost and increase the scale of production, and this is an area of intense academic research. One new technique discovered in 2020, called flash joule heating, is especially promising. Researchers have shown that passing large amounts of electricity through any carbon source reorganizes the carbon-carbon bonds into a graphene structure. Using this process, it is possible to make many pounds of high-quality graphene for a relatively low cost out of any carbon-containing material like coal or even trash. A company called Universal Matter Inc. is already commercializing the process.

Once the cost of graphene comes down, the commercial applications will follow. The appetite for graphene is huge, but it is going to take some time before this material lives up to its potential.The Conversation

About the Author:

Kevin Wyss, PhD Student in Chemistry, Rice University

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

Metals Opinions
29 Nov

We’re at the Home Stretch

Source: Michael Ballanger  (11/28/22)

– With only 33 days left in the fiscal year 2022, expert Michael Ballanger reviews where he believes the markets are heading. 

With little over thirty-six days left in the fiscal year 2022, it is critical that investors remember that bear markets do not last forever. Alas, neither do bull markets. And while the Jim Cramer’s of the world want to remind you that “there is always a bull market somewhere,” the reality is that there are also bear markets out there all of the time as well.

Home Stretch of 2022

As I enter the “home stretch” for calendar 2022, I can only recall one time in the past forty years that markets had a serious decline in December, and that was in 2018. Mind you, a Christmas Eve emergency meeting between Fed Chairman Powell and Treasury Secretary Mnuchin quickly remedied the Grinch-like behavior resulting in a Santa Claus rally that carried right through to new highs by the end of February 2019.

The Fed’s posture in 2018-2019 was accommodative, and their love affair with the asymmetrical wealth effect of rising equity prices was free of the impairment brought on by a 9% inflation rate so “conditions” in December 2018 were starkly distant from the conditions I face in 2022 (and beyond).

The Fed will “re-allocate” aggressively between now and year-end, and that combined with the historically high short interest should (operative word) propel stocks to higher levels by New Year’s Day.

As the portfolio manager horses gallop their way down the final few furlongs of 2022, they are not nearly as deeply underweight equities as they were in late September (when I turned on a dime and went bullish), but they are still underweight and need to deploy larger than normal cash positions before the auditors record their final holdings for 2022.

You see, they cannot have an abnormally high cash position and still charge 2% management fees without severe client pushback, so they will “re-allocate” aggressively between now and year-end, and that combined with the historically high short interest should (operative word) propel stocks to higher levels by New Year’s Day.

The month of December ranks number three in performance for two of the three major averages (Dow and S&P at number three with NASDAQ as number two), with small-cap issues outperforming the blue-chips starting around mid-month due largely to the cessation of tax-loss selling and rebalancing. There were some shaky weeks, such as in 2008 and in 1987, but since 1950, stocks have enjoyed fifty-three winning Decembers versus eighteen losers for a 74.6%-win ratio.

With that in mind, my positioning should be bullish stocks, and has been since late September, begging the question, “What could go wrong?”.

What Could Go Wrong?

The troublesome idiosyncrasy of the current profile for equities lies in the behavior of the sub-groups — as in Dow Jones Industrials — which have very few tech stocks and which are massively outperforming the S&P and the NASDAQ with the health care stocks taking on leadership roles.

That is exactly how one positions portfolios if one looks for more bear market action in 2023, which means that the defensive sectors get pumped while the heroes of the last bull get dumped.

My point is this: I think there are going to be a great many of the players exiting the markets before year-end for fear that the “Q1 Crash” narrative plays out, so when matched up against the “performance chasers,” it may just be that the net effect is a flat December and that the bulk of the gains actually was made in the first two months of Q4.

That in itself is where my contrarian nature starts to rebel because every single market pundit that I hear or read is positive for the seasonality trade but negative due to expected earnings markdowns in Q1/2023.

I cannot figure out whether it is a reverberating echo — a feedback loop —  that keeps circling back to the accepted narrative or whether it represents the “collective wisdom” of market participants and one that I should actually heed rather than dismiss as “adolescent idolatry” because the kiddies that run the billion-dollar funds love to hide in the anonymity of consensus investing while old geezers like me absolutely revel in isolationism. (BTW, neither is optimum behavior.)

Make no mistake; swimming against the tide is not always the easiest nor the smartest strategy, with tech stocks and crypto being generational favorites amongst the younger crowd but toxic waste for those that are older.

As timing is everything in the world in which we trade, there was a time to listen to the kiddies, and there was a time to send them into a corner wearing dunce caps so as to cast judgment on the investment acumen on a generational basis has devolved into a name-calling mug’s game and one which I prefer to avoid.

My point is this: I think there are going to be a great many of the players exiting the markets before year-end for fear that the “Q1 Crash” narrative plays out, so when matched up against the “performance chasers,” it may just be that the net effect is a flat December and that the bulk of the gains actually was made in the first two months of Q4.

The Junior Sector

I only speak of the broad equity markets because against the backdrop of a hostile Fed and decelerating global growth, it is hard to imagine people suddenly going stark bullish on commodities, led as always by gold and silver, which is precisely what is required to light a fire under the junior resource sector, a space where I, unfortunately (due to a gambling addiction) have a large portion of my investable capital.

As I have written on countless occasions, if I woke up tomorrow from a twenty-two-year coma and scanned all news headlines related to geopolitical, fiscal, and monetary events over that time period, I would have expected gold to be priced at US$30,000 an ounce with silver at US$600. I would also have the Canadian dollar trading at US$0.10 while its citizens combat a 75% inflation rate.

However, through the machinations of the Federal Reserve and the U.S. Treasury, the legions of desk traders under contract to the National Security Services have been assigned to maintain U.S. dollar hegemony, sparing no expense and taking no prisoners.

To be sure, they have done a superb job while their bosses have been able to print astonishing amounts of phony money through unbridled DEBT creation and, until 2022, enjoyed a disinflationary, Goldilocks Nirvana where literally everything moved into “bubble” territory — except of course — the two metals that over the past five-thousand years represented safe haven, sound money status, gold, and silver.

Gold put in a triple-bottom in Q4 at between US$1,618 and US$1,622, after which it responded to the collapse in the U.S. dollar index from 114.76 to 105.26 within a three-week period in November.

After testing the highs of the rebound near US$1,792, it is now working off the mid-month overbought condition by pulling back to test the 100-DMA around US$1,720, then closing out the week at US$1,754.

The MACD indicator is threatening to flip into a bearish crossover, but it did that very briefly back in October without derailing the advance, so I am placing minimal emphasis on the MACD unless we break the 100-DMA with RSI reversing back into a downtrend; neither of which I see as being “in-the-cards.”

As for the juniors, could there be a more pitiable sector in which to throw away your savings than in the junior gold miner space?

Since the 2008 Great Financial Bailout, there have been two serious rallies in the miners — the first off the major bottom in gold prices in late 2015 and lasting until August 2016 and the second being of the Fed-induced major bottom in “everything” after the Covid Crash of March 2020, with that advance, also ending in August.

Other than that, the junior gold space (GDXJ:US), shown above when priced against the gold price, is trading at levels it last saw in Q1/2016 when gold was under US$1,200. There are dozens of other studies depicting the extreme levels of undervaluation for both senior and junior gold equities but nowhere is it more shocking than in the juniors.

Gambling Versus Speculation

My area of specialization (and passion) has always been the explorers and developers, where the terms “gambling” and “speculation” are often misplaced. This was explained to me a great many years ago after being unfairly accused of being a fan of the “ponies.”

Having grown up in the town of Malton, I used to sell newspapers (including The Daily Racing Forum (“DRF”) at Woodbine at 6:00 am to owners, breeders, and trainers, all of whom showed up coffees-in-hands to give me my US$0.25 gratuity for keeping their papers warm.

One time, I was reading the DRF when a lady in a Saint John Ambulance nurse’s outfit scolded me for being a “sinner” because, in her words, “gambling” was the “devil’s playground.”

Overhearing this exchange, one of the trainers (who turned out to be two-time Queen’s Plate winner Jerry Lavigne) walked over and pointed to the DRF in my lap and said, “Kid, don’t listen to that old biddy. As long as you’re following the numbers in that rag (the DRF) and watching the heats, you are not “gamblin’. You’re handicappin’, which is another word for speculatin’ .“

Junior mining companies, including the explorers, if researched properly, are not to be considered “gambling” because of the immense reporting requirements levied upon the management teams.

Years later, I read the now-famous words of a famous Wall Street speculator that said this: “Gambling” is a venture without calculation; “speculation” is a venture with calculation.”

Walking up to the ticket window at Woodbine and placing a bet on Malarctic Nag because you like the color of the jockey’s tights would not be classified as “handicapping” nor “speculating” because there was no calculation. It was a random selection based on no prior history of performance. If, by contrast, you watched how it ran beautifully in the slop and it was raining that day, those tender hooves would not be affected thanks to the moisture, and it would be a reasonable speculation because there was calculation involved in that decision.

Junior mining companies, including the explorers, if researched properly, are not to be considered “gambling” because of the immense reporting requirements levied upon the management teams. In prior times, due diligence involved buying the penny mining “expert” a drink at the local watering hole for his next “hot tip” and then loading up because you had it “on good information” that they were about to make a discovery.

That, my friends, is gambling. Poring over page after page of geochemical and geophysical surveys, many of which are found on sedar.com and date back fifteen years while under different ownership, after speaking with contacts that have decades of experience in a particular region or with a particular type of geology and then putting the data into a cause-effect format is actually a very sophisticated yet rudimentary form of calculation. It is like looking at the Daily Racing Form at the “heats.”

Like everything else in life, if you put in the hours, you usually have success, and in the world of junior exploration and development, you can have all of the inputs called correctly, and you can assemble all of the data properly, but if the two goddesses of the junior mining universe — Mother Nature and Lady Luck — refuse to bless you, then you are either waiting a long time (at best) or kissing your money goodbye (at worst).

As we hurtle down the home stretch of what has been a very difficult year, the bulls are calling for 4,400 whilst the bears see 3,000, and with both now screaming their cases with decibel levels resembling a 747 at takeoff, it might be a good idea to minimize expectations moving into 2023

The investing world has finally entered an era of non-interference by central bankers and sovereign treasury departments, not so much out of choice but more out of necessity, because they know that accelerating inflation rates around the globe are forcing civil unrest.

Knowing that the elitists that control 90% of the world’s wealth only thrive when they have an obedient populace chasing the clearly-crafted dream of untold riches, status, and social media popularity and recognition.

When the lure of such achievement is finally and summarily dismissed by a generational metamorphosis of expectations, it becomes the personal nightmare of the privileged classes because the tools they have used since 1910’s Jekyll Island event (resulting in the creation of the Federal Reserve in 1913) have been rendered obsolete in 2022 by the arrival of a 9% inflation monster and a bear market in stocks.

For the return of Mother Nature’s blessing to the junior miners, the new and very much younger generation of speculators must be repelled by technology and crypto and enticed by physical ownership of hard assets. Once physical gold and silver become accepted by the Millennial and Gen-X crowd, then the offshoots, such as the junior producers, developers, and explorers, will rise like the Phoenix and take their rightful places at the head of the Table of Outsized Returns.

With my portfolio suffering from the apathy surrounding some very well-positioned (and well-financed) junior mining companies, I have allocated some 15% to the double-leveraged SPY ETF trading under the symbol of UPR:US where purchases in late-September/early October have me ahead 20.75%, hanging on to that gain for dear life in order to either add to my metals or re-allocate to the volatility trade (UVXY:US) which is down from its yearly high of US$26.22 to the unfathomable level of US$7.66 before closing the week at US$7.75.

As we hurtle down the home stretch of what has been a very difficult year, the bulls are calling for 4,400 whilst the bears see 3,000, and with both now screaming their cases with decibel levels resembling a 747 at takeoff, it might be a good idea to minimize expectations moving into 2023 because the truly contrarian viewpoint is to expect nothing but sideways action until mid-January.

Would that it could be so . . .

 

Michael Ballanger Disclaimer:

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

Disclosures:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.

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Metals Opinions
28 Nov

Trade of the week: Gold Waits For Fresh Fundamental Spark

By ForexTime

Gold kicked off the week on a positive note as unrest in China over Covid restrictions strained global sentiment. A growing sense of anticipation ahead of the US jobs report along with other top-tier data this week added to the overall caution, leaving investors on edge. With a softer dollar adding to the mix, bulls were injected with enough confidence to challenge levels not seen since November 18.

Nevertheless, the precious metal remains in a wide range on the daily charts with support at $1735 and resistance at $1785. Over the past few weeks, gold has bounced within this range as bulls and bears engaged in a fierce tug of war.

However, with the fundamentals slowly tilting in favour of gold bulls – a solid breakout could be around the corner. Gold needs a fresh fundamental spark to get its gears moving and this could come in the form of speeches from Fed officials, geopolitical risks, or high-quality US economic data.

Before we thoroughly discuss what to expect from gold over the next few days, it is worth keeping in mind that gold is up roughly 8% this month. November will be the first positive month for the precious metal since March 2022! Looking at the technicals, bulls are certainly in the vicinity on the daily and weekly timeframe but things still look choppy on the monthly charts. If the developments and data over the next few days support gold bulls, this could set the tone for December.

The low down…

It has been a volatile year for gold.

After surging and peaking in March following Russia’s invasion of Ukraine, the precious metal found itself on a slippery decline as the Fed aggressively raised rates to tame inflation. Although gold is down roughly 4% year-to-date, this inflates to almost 15% when measured from the March 2022 high.

Could the precious metal be experiencing a change of fortune after being beaten black and blue for most of this year? Given how the Fed is expected to slow its pace of interest rate increases in the face of cooling inflation, this may lead to a weaker dollar and falling Treasury yields. This combination is nothing but good news for zero-yielding gold which will most likely shine in a low-interest rate environment.

The week ahead…

This could be a big week for gold due to the protests in China, speeches from Fed officials including Jerome Powell, and key US economic reports.

Bulls have already made a move on Monday thanks to geopolitical tensions and this momentum could roll over into the next trading session. It may be worth keeping an eye on speeches by New York Fed President John Williams, and St. Louis Fed President James Bullard. There is a lot going on mid-week with Fed Chair Jerome Powell under the spotlight. He is expected to reinforce expectations over the central bank slowing its pace of interest rate increases from December. Such a development may lead to a weaker dollar and falling Treasury yields – resulting in a boost for gold prices. Investors will also be presented with the Fed Beige Book report and US 3Q GDP second estimate which could result in some additional dollar volatility, spilling over to gold.

Thursday sees the release of the US weekly initial jobless claims and most importantly PCE deflator. Much attention will be directed toward the PCE Core Deflator which is the Fed’s preferred measure of inflation. Any signs of cooling inflation will most likely fortify expectations around the Fed adopting a less aggressive approach toward rates.

It’s all about the US jobs report on Friday which could be the real market shaker. Markets expect the US economy to have created roughly 200,000 jobs in October while the jobless rate is expected to remain unchanged. A report that meets or prints below expectations may justify a change in the pace of the Fed’s policy tightening – ultimately supporting gold.

Time for gold to re-test $1800 and beyond?

On the daily timeframe, gold prices are trading above the 50 and 100 SMA but below the 200 SMA. As identified earlier, support can be found at around $1735 and resistance at $1780. A solid breakout above $1780 could open the doors towards $1800, $1840, and $1858. Alternatively, a move back below $1735 could signal a selloff towards $1700, $1680, and $1665.

Forex-Time-LogoArticle by ForexTime

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

Metals Opinions
22 Nov

Dramatic collapse of the cryptocurrency exchange FTX contains lessons for investors but won’t affect most people

By D. Brian Blank, Mississippi State University and Brandy Hadley, Appalachian State University 

In the fast-paced world of cryptocurrency, vast sums of money can be made or lost in the blink of an eye. In early November 2022, the second-largest cryptocurrency exchange, FTX, was valued at more than US$30 billion. By Nov. 14, FTX was in bankruptcy proceedings along with more than 100 companies connected to it. D. Brian Blank and Brandy Hadley are professors who study finance, investing and fintech. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.

1. What happened?

In 2019, Sam Bankman-Fried founded FTX, a company that ran one of the largest cryptocurrency exchanges.

FTX is where many crypto investors trade and hold their cryptocurrency, similar to the New York Stock Exchange for stocks. Bankman-Fried is also the founder of Alameda Research, a hedge fund that trades and invests in cryptocurrencies and crypto companies.

Within the traditional financial sector, these two companies would be separate firms entirely or at least have divisions and firewalls in place between them. But in early November 2022, news outlets reported that a significant proportion of Alameda’s assets were a type of cryptocurrency released by FTX itself.

A few days later, news broke that FTX had allegedly been loaning customer assets to Alameda for risky trades without the consent of the customers and also issuing its own FTX cryptocurrency for Alameda to use as collateral. As a result, criminal and regulatory investigators began scrutinizing FTX for potentially violating securities law.

These two pieces of news basically led to a bank run on FTX.

Large crypto investors, like FTX’s competitor Binance, as well as individuals, began to sell off cryptocurrency held on FTX’s exchange. FTX quickly lost its ability to meet customer withdrawals and halted trading. On Nov. 14, FTX was also hit by an apparent insider hack and lost $600 million worth of cryptocurrency.

That same day, FTX, Alameda Research and 130 other affiliated companies founded by Bankman-Fried filed for bankruptcy. This action may leave more than a million suppliers, employees and investors who bought cryptocurrencies through the exchange or invested in these companies with no way to get their money back.

Among the groups and individuals who held currency on the FTX platform were many of the normal players in the crypto world, but a number of more traditional investment firms also held assets within FTX. Sequoia Capital, a venture capital firm, as well as the Ontario Teacher’s Pension, are estimated to have held millions of dollars of their investment portfolios in ownership stake of FTX. They have both already written off these investments with FTX as lost.

2. Did a lack of oversight play a role?

In traditional markets, corporations generally limit the risk they expose themselves to by maintaining liquidity and solvency. Liquidity is the ability of a firm to sell assets quickly without those assets losing much value. Solvency is the idea that a company’s assets are worth more than what that company owes to debtors and customers.

But the crypto world has generally operated with much less caution than the traditional financial sector, and FTX is no exception. About two-thirds of the money that FTX owed to the people who held cryptocurrency on its exchange – roughly $11.3 billion of $16 billion owed – was backed by illiquid coins created by FTX. FTX was taking its customers’ money, giving it to Alameda to make risky investments and then creating its own currency, known as FTT, as a replacement – cryptocurrency that it was unable to sell at a high enough price when it needed to.

In addition, nearly 40% of Alameda’s assets were in FTX’s own cryptocurrency – and remember, both companies were founded by the same person.

This all came to a head when investors decided to sell their coins on the exchange. FTX did not have enough liquid assets to meet those demands. This in turn drove the value of FTT from over $26 a coin at the beginning of November to under $2 by Nov. 13. By this point, FTX owed more money to its customers than it was worth.

In regulated exchanges, investing with customer funds is illegal. Additionally, auditors validate financial statements, and firms must publish the amount of money they hold in reserve that is available to fund customer withdrawals. And even if things go wrong, the Securities Investor Protection Corporation – or SIPC – protects depositors against the loss of investments from an exchange failure or financially troubled brokerage firm. None of these guardrails are in place within the crypto world.

3. Why is this a big deal in crypto?

As a result of this meltdown, the company Binance is now considering creating an industry recovery fund – akin to a private version of SIPC insurance – to avoid future failures of crypto exchanges.

But while the collapse of FTX and Alameda – valued at more than $30 billion and now essentially worth nothing – is dramatic, the bigger implication is simply the potential lost trust in crypto. Bank runs are rare in traditional financial institutions, but they are increasingly common in the crypto space. Given that Bankman-Fried and FTX were seen as some of the biggest, most trusted figures in crypto, these events may lead more investors to think twice about putting money in crypto.

4. If I don’t own crypto, should I care?

Though investment in cryptocurrencies has grown rapidly, the entire crypto market – valued at over $3 trillion at its peak – is much smaller than the $120 trillion traditional stock market.

While investors and regulators are still evaluating the consequences of this fall, the impact on any person who doesn’t personally own crypto will be minuscule. It is true that many larger investment funds, like BlackRock and the Ontario Teachers Pension, held investments in FTX, but the estimated $95 million the Ontario Teachers Pension lost through the collapse of FTX is just 0.05% of the entire fund’s investments.

The takeaway for most individuals is not to invest in unregulated markets without understanding the risks. In high-risk environments like crypto, it’s possible to lose everything – a lesson investors in FTX are learning the hard way.The Conversation

About the Author:

D. Brian Blank, Assistant Professor of Finance, Mississippi State University and Brandy Hadley, Associate Professor of Finance and the David A. Thompson Professor in Applied Investments, Appalachian State University

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

 

Cryptocurrencies Opinions
20 Nov

Currency Speculators continue to trim their US Dollar Index bullish bets

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 November 15th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Japanese Yen & Mexican Peso top Weekly Speculator Changes

The COT currency market speculator bets were overall higher this week as nine out of the eleven currency markets we cover had higher positioning while the other two markets had lower speculator contracts.

Leading the gains for the currency markets was the Japanese yen (9,416 contracts) with the Mexican peso (8,237 contracts), the British pound sterling (6,901 contracts), the Canadian dollar (5,544 contracts), the Euro (5,067 contracts), the Brazilian real (4,517 contracts), the Australian dollar (1,934 contracts), Bitcoin (553 contracts) and the Swiss franc (327 contracts) also showing a positive week.

The currencies leading the declines in speculator bets this week were the US Dollar Index (-3,339 contracts) with the New Zealand dollar (-261 contracts) also registering lower bets on the week.

Highlighting the COT currency data this week is the US Dollar Index positioning. Large speculators dropped their bullish bets for the US Dollar Index this week by the most in the past eight weeks and have now decreased their weekly bets for four out of the past five weeks. The Dollar positions have slipped under +30,000 contracts for the second time in three weeks and this week’s level marks the lowest net standing in the past 59-weeks, dating back to September 28th of 2021. Overall, the Dollar positioning has been in a continuous bullish position for the past 72-weeks, dating back to July of 2021.

The price of the Dollar Index has been in retreat since reaching a 20-year high of over 114.00 at the end of the September. Since the start of November, the Dollar Index has declined sharply from a November 3rd high at over 113.00 to this week’s close on Friday November 18th at 106.83.

Data Snapshot of Forex Market Traders | Columns Legend
Nov-15-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
USD Index48,3826326,85470-29,981283,12751
EUR682,57570112,66670-151,5733338,90741
GBP230,10255-32,8344149,43968-16,60525
JPY233,34670-65,8422877,21373-11,37130
CHF41,96625-16,8271421,63778-4,81041
CAD139,75323-12,9202614,22981-1,30927
AUD162,44054-44,7494354,11259-9,36330
NZD42,58932-6,628558,38148-1,75331
MXN303,4429767,85156-74,563426,71271
RUB20,93047,54331-7,15069-39324
BRL23,46949,01859-12,404393,386100
Bitcoin17,90110057187-914034321

 

Bitcoin tops Strength Scores

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) show that Bitcoin (86.9 percent) leads the currency markets at the top of their respective ranges and are both in bullish extreme positions. The US Dollar Index (69.7 percent) and the EuroFX (69.6 percent) come in as the next highest in the currency markets in strength scores.

On the downside, the Swiss Franc (13.8 percent) comes in at the lowest strength score currently and the only one with an extreme bearish level (below 20 percent).

Strength Statistics:
US Dollar Index (69.7 percent) vs US Dollar Index previous week (75.3 percent)
EuroFX (69.6 percent) vs EuroFX previous week (68.0 percent)
British Pound Sterling (40.8 percent) vs British Pound Sterling previous week (34.9 percent)
Japanese Yen (28.3 percent) vs Japanese Yen previous week (22.5 percent)
Swiss Franc (13.8 percent) vs Swiss Franc previous week (13.0 percent)
Canadian Dollar (26.4 percent) vs Canadian Dollar previous week (19.8 percent)
Australian Dollar (43.3 percent) vs Australian Dollar previous week (41.6 percent)
New Zealand Dollar (55.1 percent) vs New Zealand Dollar previous week (55.6 percent)
Mexican Peso (56.3 percent) vs Mexican Peso previous week (52.8 percent)
Brazilian Real (59.2 percent) vs Brazilian Real previous week (54.8 percent)
Bitcoin (86.9 percent) vs Bitcoin previous week (77.3 percent)

Strength Trends led by Mexican Peso

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Mexican Peso (44.9 percent) leads the past six weeks trends for the currency markets this week. The EuroFX (21.2 percent), the British Pound Sterling (14.3 percent) and the New Zealand Dollar (13.9 percent) fill out the top movers in the latest trends data.

The Swiss Franc (-25.3 percent) leads the downside trend scores currently while the next markets with lower trend scores were the Brazilian Real (-16.5 percent), the Australian Dollar (-15.8 percent) and the US Dollar Index (-8.1 percent).

Strength Trend Statistics:
US Dollar Index (-8.1 percent) vs US Dollar Index previous week (-0.6 percent)
EuroFX (21.2 percent) vs EuroFX previous week (22.7 percent)
British Pound Sterling (14.3 percent) vs British Pound Sterling previous week (5.7 percent)
Japanese Yen (9.7 percent) vs Japanese Yen previous week (4.5 percent)
Swiss Franc (-25.3 percent) vs Swiss Franc previous week (-29.0 percent)
Canadian Dollar (10.1 percent) vs Canadian Dollar previous week (-1.0 percent)
Australian Dollar (-15.8 percent) vs Australian Dollar previous week (-11.2 percent)
New Zealand Dollar (13.9 percent) vs New Zealand Dollar previous week (9.6 percent)
Mexican Peso (44.9 percent) vs Mexican Peso previous week (43.0 percent)
Brazilian Real (-16.5 percent) vs Brazilian Real previous week (-28.8 percent)
Bitcoin (10.5 percent) vs Bitcoin previous week (-17.5 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week recorded a net position of 26,854 contracts in the data reported through Tuesday. This was a weekly reduction of -3,339 contracts from the previous week which had a total of 30,193 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 69.7 percent. The commercials are Bearish with a score of 28.2 percent and the small traders (not shown in chart) are Bullish with a score of 50.7 percent.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:80.54.412.1
– Percent of Open Interest Shorts:25.066.45.6
– Net Position:26,854-29,9813,127
– Gross Longs:38,9652,1495,843
– Gross Shorts:12,11132,1302,716
– Long to Short Ratio:3.2 to 10.1 to 12.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):69.728.250.7
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-8.110.8-21.8

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week recorded a net position of 112,666 contracts in the data reported through Tuesday. This was a weekly gain of 5,067 contracts from the previous week which had a total of 107,599 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 69.6 percent. The commercials are Bearish with a score of 33.0 percent and the small traders (not shown in chart) are Bearish with a score of 41.1 percent.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:35.150.312.6
– Percent of Open Interest Shorts:18.672.56.9
– Net Position:112,666-151,57338,907
– Gross Longs:239,369343,38886,147
– Gross Shorts:126,703494,96147,240
– Long to Short Ratio:1.9 to 10.7 to 11.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):69.633.041.1
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:21.2-26.941.1

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week recorded a net position of -32,834 contracts in the data reported through Tuesday. This was a weekly boost of 6,901 contracts from the previous week which had a total of -39,735 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 40.8 percent. The commercials are Bullish with a score of 67.7 percent and the small traders (not shown in chart) are Bearish with a score of 25.4 percent.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:15.174.08.6
– Percent of Open Interest Shorts:29.352.515.8
– Net Position:-32,83449,439-16,605
– Gross Longs:34,699170,32219,676
– Gross Shorts:67,533120,88336,281
– Long to Short Ratio:0.5 to 11.4 to 10.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):40.867.725.4
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:14.3-20.225.4

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week recorded a net position of -65,842 contracts in the data reported through Tuesday. This was a weekly boost of 9,416 contracts from the previous week which had a total of -75,258 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 28.3 percent. The commercials are Bullish with a score of 73.3 percent and the small traders (not shown in chart) are Bearish with a score of 30.3 percent.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:14.574.110.3
– Percent of Open Interest Shorts:42.741.015.2
– Net Position:-65,84277,213-11,371
– Gross Longs:33,797172,90524,061
– Gross Shorts:99,63995,69235,432
– Long to Short Ratio:0.3 to 11.8 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):28.373.330.3
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.7-7.90.7

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week recorded a net position of -16,827 contracts in the data reported through Tuesday. This was a weekly gain of 327 contracts from the previous week which had a total of -17,154 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 13.8 percent. The commercials are Bullish with a score of 78.0 percent and the small traders (not shown in chart) are Bearish with a score of 41.2 percent.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:5.469.724.0
– Percent of Open Interest Shorts:45.518.135.4
– Net Position:-16,82721,637-4,810
– Gross Longs:2,27129,24910,058
– Gross Shorts:19,0987,61214,868
– Long to Short Ratio:0.1 to 13.8 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):13.878.041.2
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-25.39.014.8

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week recorded a net position of -12,920 contracts in the data reported through Tuesday. This was a weekly boost of 5,544 contracts from the previous week which had a total of -18,464 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 26.4 percent. The commercials are Bullish-Extreme with a score of 80.6 percent and the small traders (not shown in chart) are Bearish with a score of 27.5 percent.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:26.850.221.8
– Percent of Open Interest Shorts:36.040.022.7
– Net Position:-12,92014,229-1,309
– Gross Longs:37,45670,17330,478
– Gross Shorts:50,37655,94431,787
– Long to Short Ratio:0.7 to 11.3 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):26.480.627.5
– Strength Index Reading (3 Year Range):BearishBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:10.1-3.1-9.6

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week recorded a net position of -44,749 contracts in the data reported through Tuesday. This was a weekly lift of 1,934 contracts from the previous week which had a total of -46,683 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 43.3 percent. The commercials are Bullish with a score of 59.3 percent and the small traders (not shown in chart) are Bearish with a score of 29.6 percent.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:20.467.89.3
– Percent of Open Interest Shorts:48.034.515.0
– Net Position:-44,74954,112-9,363
– Gross Longs:33,214110,09915,029
– Gross Shorts:77,96355,98724,392
– Long to Short Ratio:0.4 to 12.0 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):43.359.329.6
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-15.811.44.1

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week recorded a net position of -6,628 contracts in the data reported through Tuesday. This was a weekly reduction of -261 contracts from the previous week which had a total of -6,367 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 55.1 percent. The commercials are Bearish with a score of 48.3 percent and the small traders (not shown in chart) are Bearish with a score of 31.5 percent.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:35.957.16.3
– Percent of Open Interest Shorts:51.537.410.4
– Net Position:-6,6288,381-1,753
– Gross Longs:15,28524,3112,680
– Gross Shorts:21,91315,9304,433
– Long to Short Ratio:0.7 to 11.5 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):55.148.331.5
– Strength Index Reading (3 Year Range):BullishBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:13.9-15.317.6

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week recorded a net position of 67,851 contracts in the data reported through Tuesday. This was a weekly increase of 8,237 contracts from the previous week which had a total of 59,614 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 56.3 percent. The commercials are Bearish with a score of 41.7 percent and the small traders (not shown in chart) are Bullish with a score of 71.5 percent.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:65.231.53.1
– Percent of Open Interest Shorts:42.856.10.9
– Net Position:67,851-74,5636,712
– Gross Longs:197,70095,5309,390
– Gross Shorts:129,849170,0932,678
– Long to Short Ratio:1.5 to 10.6 to 13.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):56.341.771.5
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:44.9-44.45.5

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week recorded a net position of 9,018 contracts in the data reported through Tuesday. This was a weekly lift of 4,517 contracts from the previous week which had a total of 4,501 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 59.2 percent. The commercials are Bearish with a score of 39.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:69.98.520.2
– Percent of Open Interest Shorts:31.461.35.8
– Net Position:9,018-12,4043,386
– Gross Longs:16,3971,9864,742
– Gross Shorts:7,37914,3901,356
– Long to Short Ratio:2.2 to 10.1 to 13.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):59.239.2100.0
– Strength Index Reading (3 Year Range):BullishBearishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-16.514.817.9

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week recorded a net position of 571 contracts in the data reported through Tuesday. This was a weekly increase of 553 contracts from the previous week which had a total of 18 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 86.9 percent. The commercials are Bearish with a score of 20.1 percent and the small traders (not shown in chart) are Bearish with a score of 20.7 percent.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:78.70.86.9
– Percent of Open Interest Shorts:75.65.95.0
– Net Position:571-914343
– Gross Longs:14,0961371,231
– Gross Shorts:13,5251,051888
– Long to Short Ratio:1.0 to 10.1 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):86.920.120.7
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:10.5-24.0-2.5

 

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 Forex and Currency News Opinions
20 Nov

Bonds Speculator’s bearish bets surge to push 2-Year Bond positions to record low

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 November 15th 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 by Eurodollar & 2-Year Bond

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

Leading the weekly gains for the bond markets was the Eurodollar (145,719 contracts) with the Ultra US Bond (4,465 contracts) also showing a positive week.

The bond markets leading the weekly declines in speculator bets this week was the 2-Year Bond (-102,997 contracts) with the 10-Year Bond (-59,962 contracts), the Fed Funds (-48,469 contracts), the 5-Year Bond (-48,163 contracts), the Long US Bond (-6,956 contracts) and the Ultra 10-Year (-2,545 contracts) also registering lower bets on the week.

Highlighting the COT bonds data this week is the 2-Year Bond position that continues to see the bearish bets pile up. Large speculators sharply added to their bearish positioning this week by a total of -102,997 contracts and marking the largest one-week bearish gain since February. Overall, bearish bets have risen for the past four straight weeks and for five out of the past six weeks. The bearish position has now risen by a total of -250,758 contracts over just the past four weeks.

This continued weakness for the 2-Year has pushed the overall net position standing to the lowest on record for a third straight week with this week’s standing totaling -586,270 contracts, according to CFTC data going back to 1990.

The 2-Year Bond futures price has continued to be in a steep downtrend but has trended a bit higher in the past week off its recent low touched on November 4th at 101.19.

Data Snapshot of Bond Market Traders | Columns Legend
Nov-15-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
Eurodollar7,670,6960-1,966,931172,232,77781-265,84646
FedFunds1,488,04342-26,2853632,82264-6,53743
2-Year2,261,04222-586,2700590,806100-4,53650
Long T-Bond1,199,68743-97,6815378,7453918,93668
10-Year4,015,83366-343,02120405,12970-62,10865
5-Year4,333,91270-547,6183632,20790-84,58958

 

Strength Scores led by US Treasury Bond

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) show that the US Treasury Bond (52.8 percent) leads the bonds category and is the only bond market above the 50 percent level (3-Year Midpoint).

On the downside, the 2-Year Bond (0.0 percent) comes in at the lowest strength level and currently at the bottom of its 3-Year range. The 5-Year Bond (2.7 percent), the Ultra 10-Year Bond (8.2 percent) and the Eurodollar (16.9 percent) join the 2-Year Bond with scores in bearish extreme positions (below 20 percent).

Strength Statistics:
Fed Funds (36.4 percent) vs Fed Funds previous week (42.4 percent)
2-Year Bond (0.0 percent) vs 2-Year Bond previous week (15.3 percent)
5-Year Bond (2.7 percent) vs 5-Year Bond previous week (10.0 percent)
10-Year Bond (20.3 percent) vs 10-Year Bond previous week (29.4 percent)
Ultra 10-Year Bond (8.2 percent) vs Ultra 10-Year Bond previous week (8.9 percent)
US Treasury Bond (52.8 percent) vs US Treasury Bond previous week (55.1 percent)
Ultra US Treasury Bond (31.1 percent) vs Ultra US Treasury Bond previous week (29.3 percent)
Eurodollar (16.9 percent) vs Eurodollar previous week (14.2 percent)

10-Year Bond lead the Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that the 10-Year Bond (3.6 percent) leads the past six weeks trends for bonds this week. The Eurodollar (2.2 percent), the US Treasury Bond (1.9 percent) and the Ultra 10-Year Bond (0.8 percent) fill out the other positive movers in the latest trends data.

The 2-Year Bond (-41.6 percent) leads the downside trend scores currently with a steep drop while the next markets with lower trend scores was the 5-Year Bond (-9.8 percent) followed by the Fed Funds (-2.4 percent).

Strength Trend Statistics:
Fed Funds (-2.4 percent) vs Fed Funds previous week (-9.9 percent)
2-Year Bond (-41.6 percent) vs 2-Year Bond previous week (-24.2 percent)
5-Year Bond (-9.8 percent) vs 5-Year Bond previous week (-8.7 percent)
10-Year Bond (3.6 percent) vs 10-Year Bond previous week (12.5 percent)
Ultra 10-Year Bond (0.8 percent) vs Ultra 10-Year Bond previous week (-4.4 percent)
US Treasury Bond (1.9 percent) vs US Treasury Bond previous week (1.9 percent)
Ultra US Treasury Bond (-0.4 percent) vs Ultra US Treasury Bond previous week (-0.1 percent)
Eurodollar (2.2 percent) vs Eurodollar previous week (0.9 percent)

Individual Bond Markets:

3-Month Eurodollars Futures:

Eurodollar Bonds Futures COT ChartThe 3-Month Eurodollars large speculator standing this week totaled a net position of -1,966,931 contracts in the data reported through Tuesday. This was a weekly lift of 145,719 contracts from the previous week which had a total of -2,112,650 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 16.9 percent. The commercials are Bullish-Extreme with a score of 81.0 percent and the small traders (not shown in chart) are Bearish with a score of 45.9 percent.

3-Month Eurodollars StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:7.367.95.2
– Percent of Open Interest Shorts:32.938.88.7
– Net Position:-1,966,9312,232,777-265,846
– Gross Longs:559,9465,207,904402,188
– Gross Shorts:2,526,8772,975,127668,034
– Long to Short Ratio:0.2 to 11.8 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):16.981.045.9
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:2.2-2.0-2.1

 

30-Day Federal Funds Futures:

Federal Funds 30-Day Bonds Futures COT ChartThe 30-Day Federal Funds large speculator standing this week totaled a net position of -26,285 contracts in the data reported through Tuesday. This was a weekly lowering of -48,469 contracts from the previous week which had a total of 22,184 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 36.4 percent. The commercials are Bullish with a score of 63.9 percent and the small traders (not shown in chart) are Bearish with a score of 43.0 percent.

30-Day Federal Funds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:10.175.62.6
– Percent of Open Interest Shorts:11.873.43.0
– Net Position:-26,28532,822-6,537
– Gross Longs:149,6931,124,42138,519
– Gross Shorts:175,9781,091,59945,056
– Long to Short Ratio:0.9 to 11.0 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):36.463.943.0
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-2.41.029.4

 

2-Year Treasury Note Futures:

2-Year Treasury Bonds Futures COT ChartThe 2-Year Treasury Note large speculator standing this week totaled a net position of -586,270 contracts in the data reported through Tuesday. This was a weekly fall of -102,997 contracts from the previous week which had a total of -483,273 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 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 50.0 percent.

2-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:6.582.28.3
– Percent of Open Interest Shorts:32.456.18.5
– Net Position:-586,270590,806-4,536
– Gross Longs:146,3331,859,038187,082
– Gross Shorts:732,6031,268,232191,618
– Long to Short Ratio:0.2 to 11.5 to 11.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.050.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-41.629.637.5

 

5-Year Treasury Note Futures:

5-Year Treasury Bonds Futures COT ChartThe 5-Year Treasury Note large speculator standing this week totaled a net position of -547,618 contracts in the data reported through Tuesday. This was a weekly decline of -48,163 contracts from the previous week which had a total of -499,455 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 2.7 percent. The commercials are Bullish-Extreme with a score of 90.3 percent and the small traders (not shown in chart) are Bullish with a score of 57.8 percent.

5-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:7.183.87.2
– Percent of Open Interest Shorts:19.869.29.1
– Net Position:-547,618632,207-84,589
– Gross Longs:309,3733,632,210310,934
– Gross Shorts:856,9913,000,003395,523
– Long to Short Ratio:0.4 to 11.2 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):2.790.357.8
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-9.80.915.8

 

10-Year Treasury Note Futures:

10-Year Treasury Notes Bonds Futures COT ChartThe 10-Year Treasury Note large speculator standing this week totaled a net position of -343,021 contracts in the data reported through Tuesday. This was a weekly lowering of -59,962 contracts from the previous week which had a total of -283,059 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 20.3 percent. The commercials are Bullish with a score of 70.0 percent and the small traders (not shown in chart) are Bullish with a score of 65.3 percent.

10-Year Treasury Note StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:11.876.19.4
– Percent of Open Interest Shorts:20.366.011.0
– Net Position:-343,021405,129-62,108
– Gross Longs:472,2883,054,508379,476
– Gross Shorts:815,3092,649,379441,584
– Long to Short Ratio:0.6 to 11.2 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):20.370.065.3
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:3.6-1.4-2.9

 

Ultra 10-Year Notes Futures:

Ultra 10-Year Treasury Notes Bonds Futures COT ChartThe Ultra 10-Year Notes large speculator standing this week totaled a net position of -79,073 contracts in the data reported through Tuesday. This was a weekly decrease of -2,545 contracts from the previous week which had a total of -76,528 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 8.2 percent. The commercials are Bullish-Extreme with a score of 87.6 percent and the small traders (not shown in chart) are Bullish with a score of 57.3 percent.

Ultra 10-Year Notes StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:9.679.99.6
– Percent of Open Interest Shorts:15.366.717.1
– Net Position:-79,073184,254-105,181
– Gross Longs:133,9711,114,722133,372
– Gross Shorts:213,044930,468238,553
– Long to Short Ratio:0.6 to 11.2 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):8.287.657.3
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:0.84.2-12.9

 

US Treasury Bonds Futures:

US Year Treasury Notes Long Bonds Futures COT ChartThe US Treasury Bonds large speculator standing this week totaled a net position of -97,681 contracts in the data reported through Tuesday. This was a weekly fall of -6,956 contracts from the previous week which had a total of -90,725 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 52.8 percent. The commercials are Bearish with a score of 38.7 percent and the small traders (not shown in chart) are Bullish with a score of 67.6 percent.

US Treasury Bonds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:4.879.314.5
– Percent of Open Interest Shorts:12.972.813.0
– Net Position:-97,68178,74518,936
– Gross Longs:57,233951,931174,421
– Gross Shorts:154,914873,186155,485
– Long to Short Ratio:0.4 to 11.1 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):52.838.767.6
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:1.9-2.30.6

 

Ultra US Treasury Bonds Futures:

Ultra US Year Treasury Notes Long Bonds Futures COT ChartThe Ultra US Treasury Bonds large speculator standing this week totaled a net position of -377,708 contracts in the data reported through Tuesday. This was a weekly increase of 4,465 contracts from the previous week which had a total of -382,173 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 31.1 percent. The commercials are Bullish with a score of 72.9 percent and the small traders (not shown in chart) are Bullish with a score of 73.8 percent.

Ultra US Treasury Bonds StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:6.381.511.4
– Percent of Open Interest Shorts:31.659.78.0
– Net Position:-377,708326,61751,091
– Gross Longs:94,5401,217,889170,609
– Gross Shorts:472,248891,272119,518
– Long to Short Ratio:0.2 to 11.4 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):31.172.973.8
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.43.5-4.6

 

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.

Bonds COT Updates Opinions
20 Nov

COT Metals Speculators boost their Gold bullish bets to 13-week high

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 November 15th 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 Gold

The COT precious metals speculator bets were higher this week as all five of the metals markets we cover had higher positioning this week.

Leading the gains for the precious metals markets was Gold (43,931 contracts) with Copper (6,908 contracts), Silver (4,604 contracts), Platinum (3,095 contracts) and Palladium (1,338 contracts) also showing a positive week.

Highlighting the COT metals data this week is the rebound of the Gold speculator bets. The large speculator position for Gold jumped by over +40,000 contracts this week following a gain by over +17,000 contracts. This week’s rise marked the highest weekly gain in 143-weeks and the renewed speculator sentiment has pushed the overall Gold net position back above the +100,000 contract level for the first time since early September. The Gold speculator net standing is now at the highest level since August 16th when the net contracts was +141,164 contracts.

Gold prices have had a bit of an upswing since November 4th as well as the futures price has risen from the (Nov. 4th) opening level of $1,631.00 to close out this week at the $1,754.40 threshold. Gold, also this week, touched its highest level since the middle of August just below $1,792.00 before retreating lower.

Data Snapshot of Commodity Market Traders | Columns Legend
Nov-15-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
WTI Crude1,469,4373278,26718-307,3958129,12848
Gold495,17117126,26925-134,308788,0390
Silver141,6231417,60734-29,4246711,81727
Copper168,96299,82144-13,583563,76247
Palladium8,79314-1,072171,23181-15932
Platinum63,3912722,54439-27,037624,49328
Natural Gas978,4256-152,11433120,8306931,28454
Brent139,0804-25,1946920,782284,41269
Heating Oil275,2542625,66080-46,9332121,27372
Soybeans616,094976,80437-49,04672-27,75824
Corn1,421,55522252,90862-211,86242-41,04619
Coffee191,7436-14,154011,8401002,31432
Sugar832,52226156,19459-201,7793945,58564
Wheat350,09127-22,481029,310100-6,82975

 

Copper & Platinum lead Strength Scores

Strength scores (a measure of the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) showed that Copper (44.1 percent) and Platinum (39.4 percent) lead the metals category. Silver (33.5 percent) comes in as the next highest metals market in strength scores.

On the downside, Palladium (17.5 percent) is at the lowest strength level currently and is in a bearish extreme position with a score under 20 percent.

Strength Statistics:
Gold (24.6 percent) vs Gold previous week (10.0 percent)
Silver (33.5 percent) vs Silver previous week (28.4 percent)
Copper (44.1 percent) vs Copper previous week (38.6 percent)
Platinum (39.4 percent) vs Platinum previous week (35.2 percent)
Palladium (17.5 percent) vs Palladium previous week (9.7 percent)

Platinum tops the Strength Trends

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Platinum (25.9 percent) leads the past six weeks trends for metals this week. Copper (22.3 percent), Gold (12.6 percent) and Silver (9.8 percent) fill out the other positive movers in the latest trends data.

Palladium (-2.8 percent) leads the downside trend scores currently.

Move Statistics:
Gold (12.6 percent) vs Gold previous week (10.0 percent)
Silver (9.8 percent) vs Silver previous week (13.5 percent)
Copper (22.3 percent) vs Copper previous week (24.4 percent)
Platinum (25.9 percent) vs Platinum previous week (25.9 percent)
Palladium (-2.8 percent) vs Palladium previous week (-9.3 percent)

Individual Markets:

Gold Comex Futures:

Gold Futures COT ChartThe Gold Comex Futures large speculator standing this week reached a net position of 126,269 contracts in the data reported through Tuesday. This was a weekly lift of 43,931 contracts from the previous week which had a total of 82,338 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 24.6 percent. The commercials are Bullish with a score of 77.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

Gold Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:45.927.37.5
– Percent of Open Interest Shorts:20.454.45.8
– Net Position:126,269-134,3088,039
– Gross Longs:227,282135,03536,973
– Gross Shorts:101,013269,34328,934
– Long to Short Ratio:2.3 to 10.5 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):24.677.70.0
– Strength Index Reading (3 Year Range):BearishBullishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:12.6-11.7-0.3

 

Silver Comex Futures:

Silver Futures COT ChartThe Silver Comex Futures large speculator standing this week reached a net position of 17,607 contracts in the data reported through Tuesday. This was a weekly increase of 4,604 contracts from the previous week which had a total of 13,003 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 33.5 percent. The commercials are Bullish with a score of 67.4 percent and the small traders (not shown in chart) are Bearish with a score of 27.4 percent.

Silver Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:37.234.217.2
– Percent of Open Interest Shorts:24.854.98.9
– Net Position:17,607-29,42411,817
– Gross Longs:52,69248,39324,386
– Gross Shorts:35,08577,81712,569
– Long to Short Ratio:1.5 to 10.6 to 11.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.567.427.4
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:9.8-11.214.0

 

Copper Grade #1 Futures:

Copper Futures COT ChartThe Copper Grade #1 Futures large speculator standing this week reached a net position of 9,821 contracts in the data reported through Tuesday. This was a weekly gain of 6,908 contracts from the previous week which had a total of 2,913 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 44.1 percent. The commercials are Bullish with a score of 56.5 percent and the small traders (not shown in chart) are Bearish with a score of 47.0 percent.

Copper Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:35.936.510.3
– Percent of Open Interest Shorts:30.144.68.0
– Net Position:9,821-13,5833,762
– Gross Longs:60,73061,69317,332
– Gross Shorts:50,90975,27613,570
– Long to Short Ratio:1.2 to 10.8 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):44.156.547.0
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:22.3-24.520.4

 

Platinum Futures:

Platinum Futures COT ChartThe Platinum Futures large speculator standing this week reached a net position of 22,544 contracts in the data reported through Tuesday. This was a weekly gain of 3,095 contracts from the previous week which had a total of 19,449 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 39.4 percent. The commercials are Bullish with a score of 61.9 percent and the small traders (not shown in chart) are Bearish with a score of 28.3 percent.

Platinum Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:52.227.411.9
– Percent of Open Interest Shorts:16.670.14.8
– Net Position:22,544-27,0374,493
– Gross Longs:33,07917,3747,567
– Gross Shorts:10,53544,4113,074
– Long to Short Ratio:3.1 to 10.4 to 12.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):39.461.928.3
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:25.9-25.18.5

 

Palladium Futures:

Palladium Futures COT ChartThe Palladium Futures large speculator standing this week reached a net position of -1,072 contracts in the data reported through Tuesday. This was a weekly increase of 1,338 contracts from the previous week which had a total of -2,410 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 17.5 percent. The commercials are Bullish-Extreme with a score of 81.1 percent and the small traders (not shown in chart) are Bearish with a score of 32.2 percent.

Palladium Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:22.751.313.2
– Percent of Open Interest Shorts:34.937.315.0
– Net Position:-1,0721,231-159
– Gross Longs:1,9974,5121,161
– Gross Shorts:3,0693,2811,320
– Long to Short Ratio:0.7 to 11.4 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):17.581.132.2
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-2.85.0-23.5

 

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 Metals Opinions
20 Nov
coffee_beans

Soft Commodities Speculators drop their Coffee bets to 158-week low

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 November 15th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Sugar & Cocoa top Weekly Speculator Changes

The COT soft commodities speculator bets were lower overall this week as four out of the eleven soft commodities markets we cover had higher positioning this week while the other seven markets had decreases in contracts.

Leading the gains for soft commodities markets was Sugar (66,012 contracts) with Cocoa (13,895 contracts), Soybean Oil (5,282 contracts) and Lean Hogs (897 contracts) also showing positive weeks.

The softs market leading the declines in speculator bets this week was Corn (-48,646 contracts) with Soybean Meal (-16,485 contracts), Soybeans (-11,005 contracts), Live Cattle (-9,513 contracts), Coffee (-9,471 contracts), Wheat (-5,267 contracts) and Cotton (-364 contracts) also registering lower bets on the week.

A highlight of this week’s COT soft commodities data is the continued decline of the Coffee futures positioning that have hit their first net bearish positions since July of 2020. Large speculators dropped their weekly bets for Coffee for the seventh straight week this week and for the tenth time out of the past eleven weeks. Coffee bets have now fallen by a total of -58,834 contracts over just these past seven weeks and are in an overall bearish position for the second straight week.

The decline in spec bets has happened very rapidly as bullish positions were as high as +40,000 contracts on November 1st while the position leveled at a total net position of -14,154 contracts through Tuesday. This week’s net position marks the lowest speculator standing since November 5th of 2019, a span of 158 weeks.

Coffee prices have been on a steep drop as well with futures prices falling by over -35 percent since late-August. Helping put a dent in prices is an improved outlook for production out of Brazil that is seen as positive for the coffee harvest.

Data Snapshot of Commodity Market Traders | Columns Legend
Nov-15-2022OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
WTI Crude1,469,4373278,26718-307,3958129,12848
Gold495,17117126,26925-134,308788,0390
Silver141,6231417,60734-29,4246711,81727
Copper168,96299,82144-13,583563,76247
Palladium8,79314-1,072171,23181-15932
Platinum63,3912722,54439-27,037624,49328
Natural Gas978,4256-152,11433120,8306931,28454
Brent139,0804-25,1946920,782284,41269
Heating Oil275,2542625,66080-46,9332121,27372
Soybeans616,094976,80437-49,04672-27,75824
Corn1,421,55522252,90862-211,86242-41,04619
Coffee191,7436-14,154011,8401002,31432
Sugar832,52226156,19459-201,7793945,58564
Wheat350,09127-22,481029,310100-6,82975

 

Soybean Meal  & Soybean Oil lead the Strength Scores

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 Soybean Meal (85.8 percent) continues to lead the soft commodity markets and is in a bullish extreme position with a score above 80 percent. Soybean Oil (75.3 percent) comes in as the next highest soft commodity markets in strength scores followed by Corn (62.3 percent) and Sugar (59.4 percent).

On the downside, Coffee (0.0 percent) joins Wheat (0.0 percent) at the lowest strength levels currently and are both in bearish extreme positions (below 20 percent).

Strength Statistics:
Corn (62.3 percent) vs Corn previous week (68.6 percent)
Sugar (59.4 percent) vs Sugar previous week (41.7 percent)
Coffee (0.0 percent) vs Coffee previous week (11.2 percent)
Soybeans (37.0 percent) vs Soybeans previous week (40.3 percent)
Soybean Oil (75.3 percent) vs Soybean Oil previous week (71.7 percent)
Soybean Meal (85.8 percent) vs Soybean Meal previous week (95.0 percent)
Live Cattle (39.5 percent) vs Live Cattle previous week (51.4 percent)
Lean Hogs (52.2 percent) vs Lean Hogs previous week (51.3 percent)
Cotton (24.2 percent) vs Cotton previous week (24.4 percent)
Cocoa (42.4 percent) vs Cocoa previous week (28.7 percent)
Wheat (0.0 percent) vs Wheat previous week (6.2 percent)

Strength Trends led by Soybean Oil, Sugar & Cocoa

Strength Score Trends (or move index, calculates the 6-week changes in strength scores) show that Soybean Oil (31.1 percent) leads the past six weeks trends for soft commodity markets this week. Sugar (29.1 percent), Cocoa (25.4 percent) and Lean Hogs (19.8 percent) fill out the next top movers in the latest trends data.

Coffee (-66.3 percent) leads the downside trend scores currently while the next market with lower trend scores was Wheat (-33.2 percent) followed by Cotton (-13.0 percent).

Strength Trend Statistics:
Corn (-6.7 percent) vs Corn previous week (0.6 percent)
Sugar (29.1 percent) vs Sugar previous week (11.1 percent)
Coffee (-66.3 percent) vs Coffee previous week (-58.1 percent)
Soybeans (3.1 percent) vs Soybeans previous week (2.4 percent)
Soybean Oil (31.1 percent) vs Soybean Oil previous week (31.0 percent)
Soybean Meal (-0.7 percent) vs Soybean Meal previous week (3.4 percent)
Live Cattle (6.0 percent) vs Live Cattle previous week (-4.4 percent)
Lean Hogs (19.8 percent) vs Lean Hogs previous week (1.3 percent)
Cotton (-13.0 percent) vs Cotton previous week (-16.2 percent)
Cocoa (25.4 percent) vs Cocoa previous week (21.5 percent)
Wheat (-33.2 percent) vs Wheat previous week (-23.6 percent)

Individual Soft Commodities Markets:

CORN Futures:

CORN Futures COT ChartThe CORN large speculator standing this week came in at a net position of 252,908 contracts in the data reported through Tuesday. This was a weekly decline of -48,646 contracts from the previous week which had a total of 301,554 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 62.3 percent. The commercials are Bearish with a score of 41.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.5 percent.

CORN Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.246.99.4
– Percent of Open Interest Shorts:9.461.812.2
– Net Position:252,908-211,862-41,046
– Gross Longs:386,487667,033133,045
– Gross Shorts:133,579878,895174,091
– Long to Short Ratio:2.9 to 10.8 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):62.341.719.5
– Strength Index Reading (3 Year Range):BullishBearishBearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-6.74.013.8

 

SUGAR Futures:

SUGAR Futures COT ChartThe SUGAR large speculator standing this week came in at a net position of 156,194 contracts in the data reported through Tuesday. This was a weekly rise of 66,012 contracts from the previous week which had a total of 90,182 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 59.4 percent. The commercials are Bearish with a score of 39.0 percent and the small traders (not shown in chart) are Bullish with a score of 64.2 percent.

SUGAR Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:30.347.011.5
– Percent of Open Interest Shorts:11.571.26.0
– Net Position:156,194-201,77945,585
– Gross Longs:251,928391,03495,587
– Gross Shorts:95,734592,81350,002
– Long to Short Ratio:2.6 to 10.7 to 11.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):59.439.064.2
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:29.1-34.236.2

 

COFFEE Futures:

COFFEE Futures COT ChartThe COFFEE large speculator standing this week came in at a net position of -14,154 contracts in the data reported through Tuesday. This was a weekly decline of -9,471 contracts from the previous week which had a total of -4,683 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 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 31.6 percent.

COFFEE Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:19.554.05.3
– Percent of Open Interest Shorts:26.947.84.1
– Net Position:-14,15411,8402,314
– Gross Longs:37,332103,54410,167
– Gross Shorts:51,48691,7047,853
– Long to Short Ratio:0.7 to 11.1 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.031.6
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-66.363.62.8

 

SOYBEANS Futures:

SOYBEANS Futures COT ChartThe SOYBEANS large speculator standing this week came in at a net position of 76,804 contracts in the data reported through Tuesday. This was a weekly reduction of -11,005 contracts from the previous week which had a total of 87,809 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 37.0 percent. The commercials are Bullish with a score of 71.6 percent and the small traders (not shown in chart) are Bearish with a score of 24.1 percent.

SOYBEANS Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:23.252.87.6
– Percent of Open Interest Shorts:10.860.712.1
– Net Position:76,804-49,046-27,758
– Gross Longs:143,181325,09346,855
– Gross Shorts:66,377374,13974,613
– Long to Short Ratio:2.2 to 10.9 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):37.071.624.1
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:3.1-2.8-1.8

 

SOYBEAN OIL Futures:

SOYBEAN OIL Futures COT ChartThe SOYBEAN OIL large speculator standing this week came in at a net position of 105,263 contracts in the data reported through Tuesday. This was a weekly boost of 5,282 contracts from the previous week which had a total of 99,981 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 75.3 percent. The commercials are Bearish with a score of 24.3 percent and the small traders (not shown in chart) are Bullish with a score of 71.3 percent.

SOYBEAN OIL Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:30.042.88.9
– Percent of Open Interest Shorts:7.368.85.6
– Net Position:105,263-120,76815,505
– Gross Longs:138,838198,01341,274
– Gross Shorts:33,575318,78125,769
– Long to Short Ratio:4.1 to 10.6 to 11.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):75.324.371.3
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:31.1-33.228.7

 

SOYBEAN MEAL Futures:

SOYBEAN MEAL Futures COT ChartThe SOYBEAN MEAL large speculator standing this week came in at a net position of 104,749 contracts in the data reported through Tuesday. This was a weekly reduction of -16,485 contracts from the previous week which had a total of 121,234 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 85.8 percent. The commercials are Bearish-Extreme with a score of 18.3 percent and the small traders (not shown in chart) are Bearish with a score of 34.2 percent.

SOYBEAN MEAL Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:31.341.811.7
– Percent of Open Interest Shorts:5.172.96.8
– Net Position:104,749-124,28219,533
– Gross Longs:125,175167,38746,718
– Gross Shorts:20,426291,66927,185
– Long to Short Ratio:6.1 to 10.6 to 11.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):85.818.334.2
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-0.70.9-2.6

 

LIVE CATTLE Futures:

LIVE CATTLE Futures COT ChartThe LIVE CATTLE large speculator standing this week came in at a net position of 47,916 contracts in the data reported through Tuesday. This was a weekly decrease of -9,513 contracts from the previous week which had a total of 57,429 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 39.5 percent. The commercials are Bearish with a score of 45.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 100.0 percent.

LIVE CATTLE Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:34.634.512.4
– Percent of Open Interest Shorts:17.752.011.7
– Net Position:47,916-49,8451,929
– Gross Longs:98,27498,08135,307
– Gross Shorts:50,358147,92633,378
– Long to Short Ratio:2.0 to 10.7 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):39.545.0100.0
– Strength Index Reading (3 Year Range):BearishBearishBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:6.0-8.14.3

 

LEAN HOGS Futures:

LEAN HOGS Futures COT ChartThe LEAN HOGS large speculator standing this week came in at a net position of 41,759 contracts in the data reported through Tuesday. This was a weekly rise of 897 contracts from the previous week which had a total of 40,862 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 52.2 percent. The commercials are Bullish with a score of 55.3 percent and the small traders (not shown in chart) are Bearish with a score of 47.4 percent.

LEAN HOGS Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:40.134.89.0
– Percent of Open Interest Shorts:18.651.413.9
– Net Position:41,759-32,298-9,461
– Gross Longs:77,83567,50217,551
– Gross Shorts:36,07699,80027,012
– Long to Short Ratio:2.2 to 10.7 to 10.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):52.255.347.4
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:19.8-16.7-20.9

 

COTTON Futures:

COTTON Futures COT ChartThe COTTON large speculator standing this week came in at a net position of 20,113 contracts in the data reported through Tuesday. This was a weekly decline of -364 contracts from the previous week which had a total of 20,477 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 24.2 percent. The commercials are Bullish with a score of 76.5 percent and the small traders (not shown in chart) are Bearish with a score of 21.9 percent.

COTTON Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:33.147.26.9
– Percent of Open Interest Shorts:23.158.16.0
– Net Position:20,113-21,9001,787
– Gross Longs:66,42794,50313,814
– Gross Shorts:46,314116,40312,027
– Long to Short Ratio:1.4 to 10.8 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):24.276.521.9
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-13.012.6-6.5

 

COCOA Futures:

COCOA Futures COT ChartThe COCOA large speculator standing this week came in at a net position of 25,843 contracts in the data reported through Tuesday. This was a weekly advance of 13,895 contracts from the previous week which had a total of 11,948 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 42.4 percent. The commercials are Bullish with a score of 59.2 percent and the small traders (not shown in chart) are Bearish with a score of 24.1 percent.

COCOA Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:32.345.94.5
– Percent of Open Interest Shorts:22.556.83.4
– Net Position:25,843-28,5972,754
– Gross Longs:85,052120,92511,816
– Gross Shorts:59,209149,5229,062
– Long to Short Ratio:1.4 to 10.8 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.459.224.1
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:25.4-26.27.1

 

WHEAT Futures:

WHEAT Futures COT ChartThe WHEAT large speculator standing this week came in at a net position of -22,481 contracts in the data reported through Tuesday. This was a weekly decline of -5,267 contracts from the previous week which had a total of -17,214 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 100.0 percent and the small traders (not shown in chart) are Bullish with a score of 75.0 percent.

WHEAT Futures StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:25.839.69.4
– Percent of Open Interest Shorts:32.231.211.3
– Net Position:-22,48129,310-6,829
– Gross Longs:90,194138,56532,837
– Gross Shorts:112,675109,25539,666
– Long to Short Ratio:0.8 to 11.3 to 10.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):0.0100.075.0
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-33.238.53.6

 

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 Opinions Soft Commodities
18 Nov

Dramatic collapse of the cryptocurrency exchange FTX contains lessons for investors but won’t affect most people

By D. Brian Blank, Mississippi State University and Brandy Hadley, Appalachian State University 

In the fast-paced world of cryptocurrency, vast sums of money can be made or lost in the blink of an eye. In early November 2022, the second-largest cryptocurrency exchange, FTX, was valued at more than US$30 billion. By Nov. 14, FTX was in bankruptcy proceedings along with more than 100 companies connected to it. D. Brian Blank and Brandy Hadley are professors who study finance, investing and fintech. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.

1. What happened?

In 2019, Sam Bankman-Fried founded FTX, a company that ran one of the largest cryptocurrency exchanges.

FTX is where many crypto investors trade and hold their cryptocurrency, similar to the New York Stock Exchange for stocks. Bankman-Fried is also the founder of Alameda Research, a hedge fund that trades and invests in cryptocurrencies and crypto companies.

Within the traditional financial sector, these two companies would be separate firms entirely or at least have divisions and firewalls in place between them. But in early November 2022, news outlets reported that a significant proportion of Alameda’s assets were a type of cryptocurrency released by FTX itself.

A few days later, news broke that FTX had allegedly been loaning customer assets to Alameda for risky trades without the consent of the customers and also issuing its own FTX cryptocurrency for Alameda to use as collateral. As a result, criminal and regulatory investigators began scrutinizing FTX for potentially violating securities law.

These two pieces of news basically led to a bank run on FTX.

Large crypto investors, like FTX’s competitor Binance, as well as individuals, began to sell off cryptocurrency held on FTX’s exchange. FTX quickly lost its ability to meet customer withdrawals and halted trading. On Nov. 14, FTX was also hit by an apparent insider hack and lost $600 million worth of cryptocurrency.

That same day, FTX, Alameda Research and 130 other affiliated companies founded by Bankman-Fried filed for bankruptcy. This action may leave more than a million suppliers, employees and investors who bought cryptocurrencies through the exchange or invested in these companies with no way to get their money back.

Among the groups and individuals who held currency on the FTX platform were many of the normal players in the crypto world, but a number of more traditional investment firms also held assets within FTX. Sequoia Capital, a venture capital firm, as well as the Ontario Teacher’s Pension, are estimated to have held millions of dollars of their investment portfolios in ownership stake of FTX. They have both already written off these investments with FTX as lost.

2. Did a lack of oversight play a role?

In traditional markets, corporations generally limit the risk they expose themselves to by maintaining liquidity and solvency. Liquidity is the ability of a firm to sell assets quickly without those assets losing much value. Solvency is the idea that a company’s assets are worth more than what that company owes to debtors and customers.

But the crypto world has generally operated with much less caution than the traditional financial sector, and FTX is no exception. About two-thirds of the money that FTX owed to the people who held cryptocurrency on its exchange – roughly $11.3 billion of $16 billion owed – was backed by illiquid coins created by FTX. FTX was taking its customers’ money, giving it to Alameda to make risky investments and then creating its own currency, known as FTT, as a replacement – cryptocurrency that it was unable to sell at a high enough price when it needed to.

In addition, nearly 40% of Alameda’s assets were in FTX’s own cryptocurrency – and remember, both companies were founded by the same person.

This all came to a head when investors decided to sell their coins on the exchange. FTX did not have enough liquid assets to meet those demands. This in turn drove the value of FTT from over $26 a coin at the beginning of November to under $2 by Nov. 13. By this point, FTX owed more money to its customers than it was worth.

In regulated exchanges, investing with customer funds is illegal. Additionally, auditors validate financial statements, and firms must publish the amount of money they hold in reserve that is available to fund customer withdrawals. And even if things go wrong, the Securities Investor Protection Corporation – or SIPC – protects depositors against the loss of investments from an exchange failure or financially troubled brokerage firm. None of these guardrails are in place within the crypto world.

3. Why is this a big deal in crypto?

As a result of this meltdown, the company Binance is now considering creating an industry recovery fund – akin to a private version of SIPC insurance – to avoid future failures of crypto exchanges.

But while the collapse of FTX and Alameda – valued at more than $30 billion and now essentially worth nothing – is dramatic, the bigger implication is simply the potential lost trust in crypto. Bank runs are rare in traditional financial institutions, but they are increasingly common in the crypto space. Given that Bankman-Fried and FTX were seen as some of the biggest, most trusted figures in crypto, these events may lead more investors to think twice about putting money in crypto.

4. If I don’t own crypto, should I care?

Though investment in cryptocurrencies has grown rapidly, the entire crypto market – valued at over $3 trillion at its peak – is much smaller than the $120 trillion traditional stock market.

While investors and regulators are still evaluating the consequences of this fall, the impact on any person who doesn’t personally own crypto will be minuscule. It is true that many larger investment funds, like BlackRock and the Ontario Teachers Pension, held investments in FTX, but the estimated $95 million the Ontario Teachers Pension lost through the collapse of FTX is just 0.05% of the entire fund’s investments.

The takeaway for most individuals is not to invest in unregulated markets without understanding the risks. In high-risk environments like crypto, it’s possible to lose everything – a lesson investors in FTX are learning the hard way.The Conversation

About the Author:

D. Brian Blank, Assistant Professor of Finance, Mississippi State University and Brandy Hadley, Associate Professor of Finance and the David A. Thompson Professor in Applied Investments, Appalachian State University

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

Cryptocurrencies Opinions
16 Nov
The Euro against US dollar

Mid-Week Technical Outlook: USD Majors & Commodities

By ForexTime 

– A sense of unease gripped financial markets on Wednesday as a rocket blast in Poland overnight left investors on edge.

Renewed fears of further escalation in geopolitical tensions dragged European markets lower with the risk-off sentiment hitting US equity futures. In the currency space, the dollar got no love which offered an opportunity for G10 currencies to fight back. While gold found comfort above $1780 as market players rushed to safe-haven destinations.

Looking at the economic calendar, dollar volatility could be around the corner as investors closely scrutinize speeches from numerous Fed officials and US economic data. Just this afternoon US retail sales surged 1.3% month-over-month in October after the flat reading in September. Although this report beat market expectations, buying sentiment towards the dollar remained muted. As the week progresses, the developments surrounding the missile blast in Poland are likely to influence sentiment, especially if investors remain jittery about the prospects of further escalation.

With dollar bears marking their territory and the fundamentals pointing to further weakness down the road, G10 currencies could strike back hard.

EURUSD hits 200-day SMA 

A broadly weaker dollar has inspired EURUSD bulls to rally over the last few days. The currency pair has turned bullish on the daily charts with the MACD trading above zero. The 1.0427 level could be a tough nut to crack but a strong breakout above this point may open a path toward 1.0530. If prices are capped below 1.0427, the next key point of interest can be found at 1.0280.

GBPUSD breaks above 1.1850 

Sterling pushed higher on Wednesday after the latest UK inflation figures jumped to a 41-year high of 11.1% in October, exceeding market expectations. This development may re-kindle expectations around the Bank of England raising interest rates aggressively to combat soaring prices. A weaker dollar has also played a role in the GBPUSD’s rally as prices approach levels not seen since mid-August. Looking at the technicals, another solid daily close above 1.1850 could trigger an incline toward 1.2050. Alternatively, a move back under 1.1850 may see a sell-off towards 1.1750 and 1.1500, respectively.

AUDUSD to challenge 200-day SMA?

If the dollar continues its slippery decline, this could push the AUDUSD toward 0.6850. A strong breakout and daily close above 0.6850 has the potential to encourage a move higher toward 0.6950. Should bulls run out of steam before hitting 0.6850, bears could target the 0.6700 level.

USDJPY lingers around 139.50 

The trend is bearish on the USDJPY as there have been consistently lower lows and lower highs. Sustained weakness below 139.50 could trigger a selloff towards 137.50 and lower. Should prices stage a rebound back above 139.50, prices could challenge 142.00

Commodity spotlight – Gold

Gold seems to be on standby as investors digest the latest US retail sales data and developments revolving around Poland. However, the precious metal may resume drawing strength from a weaker dollar and subdued Treasury yields as the trading week progresses. Given how the dollar may be influenced by the numerous speeches from Fed members and US economic data, this could find its way back to gold which is trading below $1780 as of writing.

Gold remains bullish on the daily charts as there have been consistently higher highs and higher lows. A solid move above $1780 could encourage an incline towards the psychological $1800 resistance level – where the 200-day SMA resides. Should this resistance prove to be a tough nut to crack, prices could descend back below $1780 with the next key level of interest found at $1750 and $1715 – just above the 100-day SMA.

Forex-Time-LogoArticle by ForexTime

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

Forex and Currency News Opinions
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