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Archive for Opinions – Page 79

Has Federal Reserve pulled off perfect soft landing? Investors plan moves

By George Prior

The US is now likely to pull off the perfect ‘soft landing’, with the world’s largest economy avoiding a recession as the latest inflation data comes in cooler than expected.

This is the bullish analysis of Nigel Green, the CEO and Founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, as the consumer price index (CPI) rose just 0.2% in June and was up 3% from a year ago, the lowest level since March 2021.

The deVere chief executive says: “The US CPI data raises hopes that the Federal Reserve is going to be able to bring down inflation without steering the US economy into a recession.

“There had been legitimate concerns that with the aggressive monetary policy to cool red-hot inflation, the central bank might overtighten and push the world’s largest economy into a deep and/or protracted recession.

“However, the battle on rising prices is being won, as the data suggests, meaning the pressure is off the Fed for future rate hikes.”

He continues: “Cooling inflation and a strong and resilient labour market suggests that no recession will come in 2023.

“We believe the Fed has pulled off the perfect soft landing.”

The markets appear to agree. On Wall Street, the S&P 500 and the Nasdaq closed at their highest levels since April 2022 following the US CPI release on Thursday.

With a recession likely to be avoided and a soft landing achieved, investors will be looking ahead to a period of potentially more stable economic growth.

They will be working with a financial adviser to consider rebalancing their portfolios to seize the opportunities that will be presented.

“Tech, especially areas such as software development, cloud computing, artificial intelligence, cybersecurity, and e-commerce, should do well,” says Nigel Green. “Investments in pharmaceuticals, biotech, medical devices, and healthcare facilities will also be appealing.

“During periods of economic stability, governments typically focus on infrastructure development. Therefore, investments in areas such as construction, transportation, energy, utilities, and telecomms infrastructure are likely to get a boost, as will the financial sector.”

The deVere CEO concludes: “We’re not out of the woods yet, but it is increasingly likely the US economy will not face a full-blown recession this year.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Economics & Fundamentals Opinions

11 Jul

Sweden is joining Nato: what that means for the alliance and the war in Ukraine

By Simon J Smith, Staffordshire University and Jordan Becker, United States Military Academy West Point

In a surprise move, Turkey has ended its veto on Sweden joining Nato, thereby removing all the barriers to its membership of the military alliance.

Hungary quickly followed suit and, as a result of the two countries’ support, a consensus was able to be reached at the 2023 Nato summit in Vilnius, Lithuania. Turkish president Recep Tayyip Erdoğan agreeing to support Sweden’s bid to join will be touted as one of the key achievements of the summit.

Sweden submitted its formal application for membership in May 2022 alongside Finland, which was admitted into the alliance in April 2023.

Sweden, though not a formal member, has had a very close relationship with Nato for almost 30 years, since joining the alliance’s Partnership for Peace programme in 1994. It has contributed to Nato missions. And as a member of the European Union and contributor to the bloc’s common security and defence policy, it has also worked closely with the vast majority of European Nato allies.

In pursuing Nato membership, both Sweden and Finland have dramatically shifted their traditional policy of military non-alignment. A critical driver of this move was, clearly, Russia’s invasion of Ukraine in February 2022. It is also more evidence that Russian president Vladimir Putin has failed to achieve two of his own strategic objectives: weakening solidarity in the alliance and preventing further Nato enlargement towards Russia’s borders.

Finland and Sweden’s accession is of significant operational importance to how Nato defends allied territory against Russian aggression. Integrating these two nations on its north flank (the Atlantic and European Arctic) will help to solidify plans for defending its Ukraine-adjacent centre (from the Baltic Sea to the Alps). This will ensure that Russia has to contend with powerful and interoperable military forces across its entire western border.

Why Turkey lifted its veto

For a few years now, Turkey’s relationship with Nato has been nuanced and strained. Turkey’s objections to Sweden’s accession were ostensibly connected to its concerns over Sweden’s policy towards the Kurdistan Workers’ Party, or PKK.

Turkey has accused Sweden of hosting Kurdish militants. Nato has acknowledged this as a legitimate security concern and Sweden has made concessions as part of its journey towards Nato.

The main material driver of the agreement, however, may always have been a carrot being dangled by the US. American president Joe Biden now appears to be moving forward with plans to transfer F-16 fighter jets to Turkey – a deal that appears to have been unlocked by Erdoğan’s changed stance on Sweden. But it is often the case that a host of surrounding deals and suggestions of deals can help facilitate movement at Nato. Everyone, including Turkey, now seems able to sell the developments as a win to their constituents back home.

The ‘Nordic round’

Sweden’s accession means all Nordic nations are now part of Nato. As well as being significant in operational and military terms, this enlargement has major political, strategic and defence planning implications. Although Finland and Sweden have been “virtual allies” for years, their formal accession means some changes in practice.

Strategically, the two are now free to work seamlessly with the rest of the Nato allies to plan for collective defence. Integrating strategic plans is extremely valuable, particularly considering Finland’s massive border with Russia and Sweden’s possession of critical terrain like the Baltic Sea island of Gotland. This will increase strategic interoperability and coordination.

Nato allies also open their defence planning books to one another in unprecedented ways. Finland and Sweden will now undergo bilateral (with Nato’s international secretariat) and multilateral (with all allies) examinations as part of the Nato defence planning process. They will also contribute to the strategic decisions that undergird that process.

Their defence investments will also be scrutinised (and they will scrutinise the spending of other allies). Initial analysis suggests that while Finland and Sweden have lagged behind their Nordic neighbours’ increases in defence investment since 2014. Finland’s investment in defence leapt significantly leading up to and following its accession to Nato. While we may not know for months if the same is true of Sweden, we may expect similar increases on its part. Alliance norms and peer pressure are powerful.

The expansion of Nato to include Sweden is a major step for all these reasons. But while anyone watching the Vilnius summit will naturally now be asking whether the shift changes the situation for Ukraine’s membership aspirations, an answer is unlikely to be on the near horizon. Any final decision on Ukraine being offered a membership action plan for the time being is a bridge too far, especially in the current context of an ongoing war with an outcome that, as yet, is unpredictable.

About the Author:

Simon J Smith, Associate Professor of Security and International Relations, Staffordshire University and Jordan Becker, Director, SOSH Research Lab Assistant Professor of International Affairs, United States Military Academy West Point

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

Economics & Fundamentals Opinions

11 Jul

Millionaires continue to pile into crypto: poll

By George Prior

High net worth (HNW) investors have not lost any confidence in cryptocurrencies, despite the dismal so-called crypto winter of 2022, as the robust first half of year continues for the market.

85% of HNW clients have considered, or currently already are, investing in cryptocurrencies such as Bitcoin so far in 2023, according to a survey carried out by deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations.

The poll’s findings were up from 82% of the organisation’s HNW clients with between £1m and £5m of investable assets who sought advice on cryptocurrencies throughout 2022, as a whole.

Nigel Green, chief executive and founder of deVere Group, comments: “The half year crypto poll reveals that, despite the crypto market delivering its worst performance since 2018 last year, 2023 has seen a remarkable turnaround for digital currencies.

“This sustained market bounce is quite incredible considering just how dark the 2022 crypto market was, with a string of serious headline-grabbing events triggering a domino effect of financial losses that led to a shattering of investor confidence in cryptocurrencies.

“Last year’s price drops also came as investors reduced their exposure to risk-on assets, including stocks and crypto, due to heightened concerns about inflation and slower economic growth.”

Amongst other incidents, in May 2022, the TerraUSD and Luna stablecoins crashed, taking billions of dollars of investor equity down with it. The market was further rattled by the bankruptcy of crypto exchange FTX in November, which also wiped out billions of investor money. Allegations of financial wrongdoing were tabled against the firm’s leaders, including the company’s founder Sam Bankman-Fried.

“It really was about as bad as it could’ve been for the crypto market last year. And 2023 has, so, far been characterised by the US Securities and Exchange Commission (SEC) ramping up oversight in the digital asset space.

“The fact, then, Bitcoin has gained 80% already in 2023, putting it on track for its best annual performance since 2020, and that Ethereum prices are also up 52% so far this year, is truly impressive.”

The deVere CEO notes: “Against this backdrop of the so-called ‘crypto winter’, and the macroeconomic headwinds, HNWs are consistently seeking advice from their financial advisors about including digital currencies into their portfolios, or increasing their exposure to them.”

He added that despite the surveyed group being “typically more conservative,” he believes the interest stems from Bitcoin’s core values of being “digital, global, and borderless.”

The deVere Group CEO also notes the cryptocurrency market is now experiencing “upside momentum due to global cooling inflation trends which will improve the outlook for risk-on assets.”

Wealthy individuals are not the only ones who have continued their crypto interest and holdings over the last year. Institutional investors, namely Wall Street giants are also forging ahead into the space.

Nigel Green concludes: “If HNWs are continuing to express such huge interest in crypto, as market conditions steadily improve, they’re going to be amongst the first to capitalise on the anticipated continued price rises of the major digital currencies.”

About:

Cryptocurrencies Opinions

10 Jul

Markets brace for volatility ahead of Q2 earnings season

By George Prior

Stock markets are braced for a “bout of heightened volatility” as the second-quarter earnings season kicks off this week, giving an insight in the health of corporate America.

The warning from Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, comes ahead of earnings reports from the likes of BlackRock, JPMorgan Chase, Wells Fargo, and Citi.

This will be followed the week after by Tesla, Netflix, IBM, Bank of America, Goldman Sachs, Morgan Stanley, Johnson & Johnson, and United Airlines, amongst others.

The deVere Group chief executive says: “Markets are bracing for what could be the worst reporting season since the end of the pandemic.

“In the last quarterly earnings, there was a lot of negative guidance from companies. We’re likely to see this having turned out to be correct amid the brewing of a perfect storm of several major economic headwinds.

“These include the persisting challenge of inflation, meaning central banks will need to continue with, or resume, interest rate rises to bring inflation back to target; and that developed markets will experience the lag effect of monetary policy tightening during the second half of 2023.

“As companies’ costs exceed their sales, as is currently the case for many corporates, earnings take a hit.”

He continues: “With earnings being less than stellar – with some analysts saying they could be the worst since Q2 2020 – we expect a bout of heightened market volatility as investors assess the health of corporate America.

One of the main aspects of the reports that investors will be looking for this season is guidance.
“Guidance will be critical as indicators show the economy is headed for a downturn and investors will be eager to know which companies are best-positioned to manage this. Guidance helps evaluate a company’s past performance in light of its future prospects.”

Nigel Green comments: “When costs are going up, investors should increasingly be looking at a company’s and a sector’s ability to maintain margin.

“Investors should be paying close attention to margin because it can indicate how well a company is managing costs and competing in its industry.

“It can also impact a corporation’s ability to invest in growth opportunities or pay dividends to shareholders.”

Previously, he has suggested that these include energy, healthcare, luxury goods, and agriculture.

“We’ll look at energy because there’s already a shortage of energy in the world right now.

“Healthcare is a robust sector as people will always need to stay healthy – this has come into focus more than ever since the pandemic. Also, despite wider market volatility, there’s strong earnings potential due to ageing populations and other demographic changes. Plus, healthcare is becoming increasingly tech-driven, which offers fresh opportunities.”

He goes on to say: “Luxury goods can maintain margin due to the inherent aspirational ‘elite and exclusive’ aspect of the sector.

“Agriculture is another one as populations in emerging markets around the world are eating more meat. As they eat more meat, there needs to be more grain produced.”

He concludes: “The earnings reports are a critical test for the stock market rally. Investors should buckle up.”

About:

Opinions Stock Market News

08 Jul

Speculators push Canadian Dollar bets into bullish level for 1st time in 41 weeks

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 Monday July 3rd 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.

Weekly Speculator Changes led by Canadian Dollar

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

Leading the gains for the currency markets was the Canadian Dollar (7,374 contracts) with the New Zealand Dollar (1,661 contracts), Swiss Franc (1,542 contracts) and Bitcoin (18 contracts) also showing positive weeks.

The currencies seeing declines in speculator bets on the week were the Australian Dollar (-5,158 contracts) with the Japanese Yen (-5,050 contracts), Mexican Peso (-1,109 contracts), the British Pound (-1,729 contracts), the EuroFX (-2,191 contracts), the US Dollar Index (-651 contracts) and the Brazilian Real (-491 contracts) also registering lower bets on the week.

Speculators push Canadian Dollar bets into bullish level for 1st time in 41 weeks

Highlighting the COT currency’s data this week is the new bullish positioning in the Canadian dollar. Large speculative Canadian dollar positions rose this week for the fourth consecutive week and for the fifth time in the past six weeks.

Speculators have now added +42,856 net contracts to the overall position in just the last four weeks. This positive sentiment has pushed the CAD speculator net position (currently at +4,527 contracts) to the first bullish level of the past 41 weeks, dating back to September 9th of 2022.

The Canadian dollar’s futures price (versus the US dollar) has been in an uptrend since hitting a recent 2023-low in March of 2022 near 0.7223. The CAD front month futures price climbed back over the 200-day moving average in June and closed this week at the 0.7541 level. Helping the CAD go higher at the end of this week was the better than expected Canadian jobs report which could help propel the currency higher and continue on its current uptrend.

Data Snapshot of Forex Market Traders | Columns Legend

Jul-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
USD Index	26,619	7	14,317	49	-16,580	49	2,263	41
EUR	725,927	56	142,837	73	-189,459	26	46,622	53
GBP	221,021	50	50,265	99	-63,664	2	13,399	84
JPY	265,066	89	-117,920	0	126,010	97	-8,090	37
CHF	40,639	38	-3,404	46	7,565	57	-4,161	43
CAD	156,284	31	4,527	59	-18,815	43	14,288	55
AUD	153,744	44	-44,582	44	51,374	57	-6,792	36
NZD	34,057	18	830	56	1,511	50	-2,341	22
MXN	238,269	51	95,240	97	-99,399	2	4,159	38
RUB	20,930	4	7,543	31	-7,150	69	-393	24
BRL	66,547	62	31,104	75	-27,440	31	-3,664	15
Bitcoin	17,008	85	-2,076	41	1,132	0	944	34

Strength Scores led by British Pound & Mexican Peso

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the British Pound (99 percent) and the Mexican Peso (97 percent) lead the currency markets this week and are in Extreme-Bullish levels. The Brazilian Real (75 percent), EuroFX (73 percent) and the Canadian Dollar (59 percent) come in as the next highest in the weekly strength scores.

On the downside, the Japanese Yen (0 percent) comes in at the lowest strength levels currently and is in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (48.8 percent) vs US Dollar Index previous week (49.9 percent)
EuroFX (73.4 percent) vs EuroFX previous week (74.3 percent)
British Pound Sterling (98.7 percent) vs British Pound Sterling previous week (100.0 percent)
Japanese Yen (0.0 percent) vs Japanese Yen previous week (3.0 percent)
Swiss Franc (45.6 percent) vs Swiss Franc previous week (41.5 percent)
Canadian Dollar (58.8 percent) vs Canadian Dollar previous week (51.9 percent)
Australian Dollar (43.5 percent) vs Australian Dollar previous week (48.3 percent)
New Zealand Dollar (55.8 percent) vs New Zealand Dollar previous week (51.3 percent)
Mexican Peso (97.3 percent) vs Mexican Peso previous week (97.9 percent)
Brazilian Real (75.3 percent) vs Brazilian Real previous week (76.0 percent)
Bitcoin (40.7 percent) vs Bitcoin previous week (40.4 percent)

Canadian Dollar & British Pound top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Canadian Dollar (49 percent) and the British Pound (29 percent) lead the past six weeks trends for the currencies. The Mexican Peso (11 percent), the US Dollar Index (5 percent) and the Australian Dollar (4 percent) are the next highest positive movers in the latest trends data.

Bitcoin (-52 percent) leads the downside trend scores currently with the Japanese Yen (-22 percent), EuroFX (-12 percent) and the Swiss Franc (-7 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (5.1 percent) vs US Dollar Index previous week (9.1 percent)
EuroFX (-11.9 percent) vs EuroFX previous week (-16.2 percent)
British Pound Sterling (29.2 percent) vs British Pound Sterling previous week (29.8 percent)
Japanese Yen (-22.1 percent) vs Japanese Yen previous week (-28.5 percent)
Swiss Franc (-6.6 percent) vs Swiss Franc previous week (-8.2 percent)
Canadian Dollar (49.5 percent) vs Canadian Dollar previous week (37.4 percent)
Australian Dollar (4.2 percent) vs Australian Dollar previous week (13.1 percent)
New Zealand Dollar (3.2 percent) vs New Zealand Dollar previous week (3.4 percent)
Mexican Peso (11.2 percent) vs Mexican Peso previous week (13.9 percent)
Brazilian Real (-2.0 percent) vs Brazilian Real previous week (-2.6 percent)
Bitcoin (-51.8 percent) vs Bitcoin previous week (-54.2 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

The US Dollar Index large speculator standing this week reached a net position of 14,317 contracts in the data reported through Tuesday. This was a weekly reduction of -651 contracts from the previous week which had a total of 14,968 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 48.8 percent. The commercials are Bearish with a score of 49.4 percent and the small traders (not shown in chart) are Bearish with a score of 41.3 percent.

Price Trend-Following Model: Strong Uptrend

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

US DOLLAR INDEX Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	76.1	2.2	16.8
– Percent of Open Interest Shorts:	22.4	64.5	8.3
– Net Position:	14,317	-16,580	2,263
– Gross Longs:	20,267	584	4,462
– Gross Shorts:	5,950	17,164	2,199
– Long to Short Ratio:	3.4 to 1	0.0 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.8	49.4	41.3
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.1	-4.3	-4.0

Euro Currency Futures:

The Euro Currency large speculator standing this week reached a net position of 142,837 contracts in the data reported through Tuesday. This was a weekly fall of -2,191 contracts from the previous week which had a total of 145,028 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 73.4 percent. The commercials are Bearish with a score of 26.5 percent and the small traders (not shown in chart) are Bullish with a score of 53.4 percent.

Price Trend-Following Model: Strong Uptrend

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

EURO Currency Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.5	55.3	12.5
– Percent of Open Interest Shorts:	10.8	81.4	6.1
– Net Position:	142,837	-189,459	46,622
– Gross Longs:	221,272	401,256	90,921
– Gross Shorts:	78,435	590,715	44,299
– Long to Short Ratio:	2.8 to 1	0.7 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	73.4	26.5	53.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.9	11.7	-6.1

British Pound Sterling Futures:

The British Pound Sterling large speculator standing this week reached a net position of 50,265 contracts in the data reported through Tuesday. This was a weekly decrease of -1,729 contracts from the previous week which had a total of 51,994 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 98.7 percent. The commercials are Bearish-Extreme with a score of 1.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.3 percent.

Price Trend-Following Model: Strong Uptrend

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

BRITISH POUND Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	43.6	33.7	16.6
– Percent of Open Interest Shorts:	20.9	62.5	10.5
– Net Position:	50,265	-63,664	13,399
– Gross Longs:	96,461	74,446	36,707
– Gross Shorts:	46,196	138,110	23,308
– Long to Short Ratio:	2.1 to 1	0.5 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	98.7	1.9	84.3
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	29.2	-28.7	16.3

Japanese Yen Futures:

The Japanese Yen large speculator standing this week reached a net position of -117,920 contracts in the data reported through Tuesday. This was a weekly lowering of -5,050 contracts from the previous week which had a total of -112,870 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 97.1 percent and the small traders (not shown in chart) are Bearish with a score of 37.0 percent.

Price Trend-Following Model: Strong Downtrend

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

JAPANESE YEN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.7	71.7	11.5
– Percent of Open Interest Shorts:	60.2	24.2	14.5
– Net Position:	-117,920	126,010	-8,090
– Gross Longs:	41,713	190,157	30,449
– Gross Shorts:	159,633	64,147	38,539
– Long to Short Ratio:	0.3 to 1	3.0 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	97.1	37.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.1	16.4	7.4

Swiss Franc Futures:

The Swiss Franc large speculator standing this week reached a net position of -3,404 contracts in the data reported through Tuesday. This was a weekly boost of 1,542 contracts from the previous week which had a total of -4,946 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 45.6 percent. The commercials are Bullish with a score of 57.5 percent and the small traders (not shown in chart) are Bearish with a score of 43.4 percent.

Price Trend-Following Model: Uptrend

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

SWISS FRANC Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.2	45.9	27.5
– Percent of Open Interest Shorts:	34.5	27.2	37.8
– Net Position:	-3,404	7,565	-4,161
– Gross Longs:	10,634	18,633	11,193
– Gross Shorts:	14,038	11,068	15,354
– Long to Short Ratio:	0.8 to 1	1.7 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	45.6	57.5	43.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.6	9.7	-11.4

Canadian Dollar Futures:

The Canadian Dollar large speculator standing this week reached a net position of 4,527 contracts in the data reported through Tuesday. This was a weekly gain of 7,374 contracts from the previous week which had a total of -2,847 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 58.8 percent. The commercials are Bearish with a score of 43.3 percent and the small traders (not shown in chart) are Bullish with a score of 54.5 percent.

Price Trend-Following Model: Strong Uptrend

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

CANADIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.3	47.0	22.9
– Percent of Open Interest Shorts:	25.4	59.0	13.7
– Net Position:	4,527	-18,815	14,288
– Gross Longs:	44,178	73,437	35,761
– Gross Shorts:	39,651	92,252	21,473
– Long to Short Ratio:	1.1 to 1	0.8 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	58.8	43.3	54.5
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	49.5	-46.2	33.1

Australian Dollar Futures:

The Australian Dollar large speculator standing this week reached a net position of -44,582 contracts in the data reported through Tuesday. This was a weekly reduction of -5,158 contracts from the previous week which had a total of -39,424 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 43.5 percent. The commercials are Bullish with a score of 57.2 percent and the small traders (not shown in chart) are Bearish with a score of 35.9 percent.

Price Trend-Following Model: Weak Downtrend

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

AUSTRALIAN DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	32.6	53.4	11.9
– Percent of Open Interest Shorts:	61.6	20.0	16.3
– Net Position:	-44,582	51,374	-6,792
– Gross Longs:	50,170	82,076	18,331
– Gross Shorts:	94,752	30,702	25,123
– Long to Short Ratio:	0.5 to 1	2.7 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.5	57.2	35.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	4.2	-6.5	10.2

New Zealand Dollar Futures:

The New Zealand Dollar large speculator standing this week reached a net position of 830 contracts in the data reported through Tuesday. This was a weekly gain of 1,661 contracts from the previous week which had a total of -831 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 55.8 percent. The commercials are Bullish with a score of 50.1 percent and the small traders (not shown in chart) are Bearish with a score of 22.1 percent.

Price Trend-Following Model: Weak Downtrend

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

NEW ZEALAND DOLLAR Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	38.7	53.4	7.0
– Percent of Open Interest Shorts:	36.2	48.9	13.9
– Net Position:	830	1,511	-2,341
– Gross Longs:	13,170	18,176	2,390
– Gross Shorts:	12,340	16,665	4,731
– Long to Short Ratio:	1.1 to 1	1.1 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	55.8	50.1	22.1
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.2	4.9	-38.8

Mexican Peso Futures:

The Mexican Peso large speculator standing this week reached a net position of 95,240 contracts in the data reported through Tuesday. This was a weekly reduction of -1,109 contracts from the previous week which had a total of 96,349 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 97.3 percent. The commercials are Bearish-Extreme with a score of 2.2 percent and the small traders (not shown in chart) are Bearish with a score of 37.7 percent.

Price Trend-Following Model: Strong Uptrend

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

MEXICAN PESO Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.0	44.1	3.6
– Percent of Open Interest Shorts:	12.0	85.9	1.9
– Net Position:	95,240	-99,399	4,159
– Gross Longs:	123,919	105,172	8,685
– Gross Shorts:	28,679	204,571	4,526
– Long to Short Ratio:	4.3 to 1	0.5 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	97.3	2.2	37.7
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.2	-10.0	-9.7

Brazilian Real Futures:

The Brazilian Real large speculator standing this week reached a net position of 31,104 contracts in the data reported through Tuesday. This was a weekly fall of -491 contracts from the previous week which had a total of 31,595 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 30.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.8 percent.

Price Trend-Following Model: Uptrend

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

BRAZIL REAL Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	57.1	35.3	7.6
– Percent of Open Interest Shorts:	10.4	76.5	13.1
– Net Position:	31,104	-27,440	-3,664
– Gross Longs:	38,012	23,461	5,070
– Gross Shorts:	6,908	50,901	8,734
– Long to Short Ratio:	5.5 to 1	0.5 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	75.3	30.9	14.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.0	11.4	-60.8

Bitcoin Futures:

The Bitcoin large speculator standing this week reached a net position of -2,076 contracts in the data reported through Tuesday. This was a weekly boost of 18 contracts from the previous week which had a total of -2,094 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 40.7 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 34.4 percent.

Price Trend-Following Model: Strong Uptrend

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

BITCOIN Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	75.6	10.0	9.2
– Percent of Open Interest Shorts:	87.8	3.3	3.7
– Net Position:	-2,076	1,132	944
– Gross Longs:	12,854	1,698	1,568
– Gross Shorts:	14,930	566	624
– Long to Short Ratio:	0.9 to 1	3.0 to 1	2.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.7	100.0	34.4
– Strength Index Reading (3 Year Range):	Bearish	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-51.8	91.6	13.5

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

08 Jul

Speculator Extremes: GBP, MXN, 2-Year and Palladium lead Bullish & Bearish Positions

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on July 3rd.

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

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

Here Are This Week’s Most Bullish Speculator Positions:

British Pound

The British Pound speculator position comes in as the most bullish extreme standing this week. The British Pound speculator level is currently at a 98.7 percent score of its 3-year range.

The six-week trend for the percent strength score totaled 29.2 this week. The overall net speculator position was a total of 50,265 net contracts this week with a change of -1,729 contract in the weekly speculator bets.

Mexican Peso

The Mexican Peso speculator position comes next in the extreme standings this week. The Mexican Peso speculator level is now at a 97.3 percent score of its 3-year range.

The six-week trend for the percent strength score was 11.2 this week. The speculator position registered 95,240 net contracts this week with a weekly change of -1,109 contracts in speculator bets.

3-Month Secured Overnight Financing Rate

The 3-Month Secured Overnight Financing Rate speculator position comes in third this week in the extreme standings. The 3-Month Secured Overnight Financing Rate speculator level resides at a 97.0 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at 23.5 this week. The overall speculator position was 239,839 net contracts this week with a change of -44,151 contracts in the weekly speculator bets.

Cocoa Futures

The Cocoa Futures speculator position comes up number four in the extreme standings this week. The Cocoa Futures speculator level is at a 94.4 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled a change of 7.6 this week. The overall speculator position was 72,584 net contracts this week with a change of 1,032 contracts in the speculator bets.

Live Cattle

The Live Cattle speculator position rounds out the top five in this week’s bullish extreme standings. The Live Cattle speculator level sits at a 92.7 percent score of its 3-year range. The six-week trend for the speculator strength score was 4.1 this week.

The speculator position was 105,443 net contracts this week with a change of 2,354 contracts in the weekly speculator bets.

This Week’s Most Bearish Speculator Positions:

Ultra U.S. Treasury Bonds

The Ultra U.S. Treasury Bonds speculator position comes in as the most bearish extreme standing this week. The Ultra U.S. Treasury Bonds speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -17.2 this week. The overall speculator position was -450,572 net contracts this week with a change of -26,881 contracts in the speculator bets.

2-Year Bond

The 2-Year Bond speculator position comes in next for the most bearish extreme standing on the week. The 2-Year Bond speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -14.7 this week. The speculator position was -1,058,426 net contracts this week with a change of -44,022 contracts in the weekly speculator bets.

1-Month Secured Overnight Financing Rate

The 1-Month Secured Overnight Financing Rate speculator position comes in as third most bearish extreme standing of the week. The 1-Month Secured Overnight Financing Rate speculator level resides at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -48.2 this week. The overall speculator position was -206,500 net contracts this week with a change of -18,761 contracts in the speculator bets.

Japanese Yen

The Japanese Yen speculator position comes in as this week’s fourth most bearish extreme standing. The Japanese Yen speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -22.1 this week. The speculator position was -117,920 net contracts this week with a change of -5,050 contracts in the weekly speculator bets.

Palladium

Finally, the Palladium speculator position comes in as the fifth most bearish extreme standing for this week. The Palladium speculator level is at a 0.0 percent score of its 3-year range.

The six-week trend for the speculator strength score was -22.4 this week. The speculator position was -7,890 net contracts this week with a change of -566 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

COT Updates Opinions

08 Jul

COT Metals Charts: Weekly Speculator Changes led by Gold

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 Monday July 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Gold

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

Leading the gains for the metals was Gold (11,187 contracts) with Steel (1,150 contracts) also showing a positive week.

The markets with declines in speculator bets for the week were Copper (-11,702 contracts), Palladium (-566 contracts), Platinum (-4,093 contracts) and Silver (-1,062 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Jul-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
Gold	448,063	12	163,097	49	-184,717	53	21,620	34
Silver	114,421	0	17,990	44	-29,569	58	11,579	31
Copper	204,399	46	1,888	32	-4,003	68	2,115	32
Palladium	14,781	100	-7,890	0	8,358	100	-468	14
Platinum	69,383	70	8,067	34	-13,570	65	5,503	42

Strength Scores led by Steel & Gold

On the downside, Palladium (0 percent)comes in at the lowest strength level currently and is in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Gold (48.9 percent) vs Gold previous week (43.9 percent)
Silver (43.9 percent) vs Silver previous week (45.4 percent)
Copper (23.3 percent) vs Copper previous week (33.4 percent)
Platinum (34.2 percent) vs Platinum previous week (43.6 percent)
Palladium (0.0 percent) vs Palladium previous week (4.9 percent)
Steel (72.8 percent) vs Palladium previous week (69.5 percent)

Copper & Steel top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Copper (23 percent) and Steel (15 percent) lead the past six weeks trends for metals.

Platinum (-45 percent) leads the downside trend scores currently.

Move Statistics:
Gold (1.0 percent) vs Gold previous week (-12.3 percent)
Silver (-5.7 percent) vs Silver previous week (-6.8 percent)
Copper (18.2 percent) vs Copper previous week (30.7 percent)
Platinum (-44.8 percent) vs Platinum previous week (-31.5 percent)
Palladium (-22.4 percent) vs Palladium previous week (-20.7 percent)
Steel (15.0 percent) vs Steel previous week (9.1 percent)

Individual Markets:

Gold Comex Futures:

The Gold Comex Futures large speculator standing this week recorded a net position of 163,097 contracts in the data reported through Tuesday. This was a weekly boost of 11,187 contracts from the previous week which had a total of 151,910 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 48.9 percent. The commercials are Bullish with a score of 52.6 percent and the small traders (not shown in chart) are Bearish with a score of 34.1 percent.

Price Trend-Following Model: Weak Uptrend

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

Gold Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.5	25.6	10.2
– Percent of Open Interest Shorts:	16.1	66.9	5.3
– Net Position:	163,097	-184,717	21,620
– Gross Longs:	235,081	114,905	45,490
– Gross Shorts:	71,984	299,622	23,870
– Long to Short Ratio:	3.3 to 1	0.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.9	52.6	34.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.0	0.9	-11.7

Silver Comex Futures:

The Silver Comex Futures large speculator standing this week recorded a net position of 17,990 contracts in the data reported through Tuesday. This was a weekly lowering of -1,062 contracts from the previous week which had a total of 19,052 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 43.9 percent. The commercials are Bullish with a score of 58.1 percent and the small traders (not shown in chart) are Bearish with a score of 30.7 percent.

Price Trend-Following Model: Weak Uptrend

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

Silver Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.6	33.0	20.1
– Percent of Open Interest Shorts:	24.9	58.9	10.0
– Net Position:	17,990	-29,569	11,579
– Gross Longs:	46,433	37,784	23,020
– Gross Shorts:	28,443	67,353	11,441
– Long to Short Ratio:	1.6 to 1	0.6 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.9	58.1	30.7
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.7	6.5	-8.0

Copper Grade #1 Futures:

The Copper Grade #1 Futures large speculator standing this week recorded a net position of -8,762 contracts in the data reported through Tuesday. This was a weekly fall of -11,702 contracts from the previous week which had a total of 2,940 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 23.3 percent. The commercials are Bullish with a score of 77.1 percent and the small traders (not shown in chart) are Bearish with a score of 32.0 percent.

Price Trend-Following Model: Downtrend

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

Copper Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.7	42.4	8.2
– Percent of Open Interest Shorts:	30.7	44.4	7.2
– Net Position:	1,888	-4,003	2,115
– Gross Longs:	64,740	86,761	16,759
– Gross Shorts:	62,852	90,764	14,644
– Long to Short Ratio:	1.0 to 1	1.0 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	32.5	68.3	31.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	23.1	-19.7	-19.0

Platinum Futures:

The Platinum Futures large speculator standing this week recorded a net position of 8,067 contracts in the data reported through Tuesday. This was a weekly lowering of -4,093 contracts from the previous week which had a total of 12,160 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 34.2 percent. The commercials are Bullish with a score of 65.4 percent and the small traders (not shown in chart) are Bearish with a score of 41.8 percent.

Price Trend-Following Model: Strong Downtrend

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

Platinum Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	52.5	28.6	13.0
– Percent of Open Interest Shorts:	40.9	48.2	5.1
– Net Position:	8,067	-13,570	5,503
– Gross Longs:	36,443	19,856	9,026
– Gross Shorts:	28,376	33,426	3,523
– Long to Short Ratio:	1.3 to 1	0.6 to 1	2.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.2	65.4	41.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-44.8	38.4	11.0

Palladium Futures:

The Palladium Futures large speculator standing this week recorded a net position of -7,890 contracts in the data reported through Tuesday. This was a weekly decline of -566 contracts from the previous week which had a total of -7,324 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-Extreme with a score of 13.6 percent.

Price Trend-Following Model: Strong Downtrend

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

Palladium Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.6	63.1	9.9
– Percent of Open Interest Shorts:	76.0	6.6	13.1
– Net Position:	-7,890	8,358	-468
– Gross Longs:	3,342	9,330	1,463
– Gross Shorts:	11,232	972	1,931
– Long to Short Ratio:	0.3 to 1	9.6 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	13.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-22.4	21.0	-5.3

Steel Futures Futures:

The Steel Futures large speculator standing this week recorded a net position of -130 contracts in the data reported through Tuesday. This was a weekly boost of 1,150 contracts from the previous week which had a total of -1,280 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 72.8 percent. The commercials are Bearish with a score of 26.9 percent and the small traders (not shown in chart) are Bearish with a score of 40.6 percent.

Price Trend-Following Model: Strong Downtrend

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

Steel Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.5	74.9	1.3
– Percent of Open Interest Shorts:	18.1	75.1	0.7
– Net Position:	-130	-28	158
– Gross Longs:	4,129	17,669	312
– Gross Shorts:	4,259	17,697	154
– Long to Short Ratio:	1.0 to 1	1.0 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	72.8	26.9	40.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	15.0	-16.0	40.6

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Metals Opinions

08 Jul

COT Bonds Charts: Speculator bets led by 10-Year Bonds

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 Monday July 3rd and shows a quick view of how large traders (for-profit speculators and commercial hedgers) were positioned in the futures markets.

Weekly Speculator Changes led by 10-Year Bonds & Ultra 10-Year Bonds

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

The only market with gains for the bond category was the 10-Year Bonds with a total rise of 20,321 contracts.

The bond markets with declines in speculator bets for the week were the SOFR 3-Months (-44,151 contracts), the 2-Year Bonds (-44,022 contracts), 5-Year Bonds (-31,326 contracts), the US Treasury Bonds (-24,681 contracts), the Ultra Treasury Bonds (-26,881 contracts), the Fed Funds (-17,553 contracts) and the Ultra 10-Year Bonds (-8,713 contracts) also registering lower bets on the week.

Data Snapshot of Bond Market Traders | Columns Legend

Jul-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
SOFR-3-Months	9,300,042	89	239,839	97	-233,436	2	-6,403	84
FedFunds	1,414,525	39	-106,758	34	115,921	66	-9,163	73
2-Year	3,667,737	100	-1,058,426	0	970,602	100	87,824	97
Long T-Bond	1,242,918	63	-139,929	39	106,742	49	33,187	73
10-Year	4,737,762	91	-780,678	7	719,909	96	60,769	87
5-Year	5,080,610	99	-1,029,814	0	1,026,687	100	3,127	82

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

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the SOFR 3-Months (97 percent). The US Treasury Bonds (39 percent) and the Fed Funds (34 percent) come in as the next highest in the weekly strength scores.

On the downside, the Ultra Treasury Bonds (0 percent), the 5-Year Bonds (0 percent), the 2-Year Bonds (0 percent) and the 10-Year Bonds (7 percent) come in at the lowest strength level currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Fed Funds (33.5 percent) vs Fed Funds previous week (36.3 percent)
2-Year Bond (0.0 percent) vs 2-Year Bond previous week (3.8 percent)
5-Year Bond (0.5 percent) vs 5-Year Bond previous week (3.3 percent)
10-Year Bond (6.8 percent) vs 10-Year Bond previous week (4.8 percent)
Ultra 10-Year Bond (15.9 percent) vs Ultra 10-Year Bond previous week (17.7 percent)
US Treasury Bond (39.1 percent) vs US Treasury Bond previous week (47.1 percent)
Ultra US Treasury Bond (0.0 percent) vs Ultra US Treasury Bond previous week (11.1 percent)
SOFR 3-Months (97.0 percent) vs SOFR 3-Months previous week (100.0 percent)

SOFR 3-Months & Ultra 10-Year Bonds top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the SOFR 3-Months (24 percent) and the Ultra 10-Year Bonds (4 percent) lead the past six weeks trends for bonds. The 10-Year Bonds (-1 percent) and the are the next highest positive movers in the latest trends data.

The US Treasury Bonds (-31 percent), the Ultra Treasury Bonds (-17 percent) and the 2-Year Bonds (-15 percent) lead the downside trend scores currently.

Strength Trend Statistics:
Fed Funds (-2.9 percent) vs Fed Funds previous week (-3.4 percent)
2-Year Bond (-14.7 percent) vs 2-Year Bond previous week (-14.0 percent)
5-Year Bond (-8.5 percent) vs 5-Year Bond previous week (-6.6 percent)
10-Year Bond (-0.9 percent) vs 10-Year Bond previous week (-10.5 percent)
Ultra 10-Year Bond (3.7 percent) vs Ultra 10-Year Bond previous week (11.2 percent)
US Treasury Bond (-31.5 percent) vs US Treasury Bond previous week (-17.5 percent)
Ultra US Treasury Bond (-17.2 percent) vs Ultra US Treasury Bond previous week (-14.4 percent)
SOFR 3-Months (23.5 percent) vs SOFR 3-Months previous week (31.1 percent)

Secured Overnight Financing Rate (3-Month) Futures:

The Secured Overnight Financing Rate (3-Month) large speculator standing this week came in at a net position of 239,839 contracts in the data reported through Tuesday. This was a weekly decline of -44,151 contracts from the previous week which had a total of 283,990 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 97.0 percent. The commercials are Bearish-Extreme with a score of 2.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 84.4 percent.

Price Trend-Following Model: Weak Uptrend

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

SOFR 3-Months Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.2	58.6	0.3
– Percent of Open Interest Shorts:	17.6	61.1	0.4
– Net Position:	239,839	-233,436	-6,403
– Gross Longs:	1,880,577	5,453,300	28,213
– Gross Shorts:	1,640,738	5,686,736	34,616
– Long to Short Ratio:	1.1 to 1	1.0 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	97.0	2.1	84.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	23.5	-23.9	0.5

30-Day Federal Funds Futures:

The 30-Day Federal Funds large speculator standing this week came in at a net position of -106,758 contracts in the data reported through Tuesday. This was a weekly reduction of -17,553 contracts from the previous week which had a total of -89,205 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 66.3 percent and the small traders (not shown in chart) are Bullish with a score of 73.0 percent.

Price Trend-Following Model: Downtrend

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

30-Day Federal Funds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.5	72.0	2.5
– Percent of Open Interest Shorts:	14.0	63.8	3.1
– Net Position:	-106,758	115,921	-9,163
– Gross Longs:	91,610	1,018,379	35,112
– Gross Shorts:	198,368	902,458	44,275
– Long to Short Ratio:	0.5 to 1	1.1 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	33.5	66.3	73.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-2.9	1.4	18.9

2-Year Treasury Note Futures:

The 2-Year Treasury Note large speculator standing this week came in at a net position of -1,058,426 contracts in the data reported through Tuesday. This was a weekly reduction of -44,022 contracts from the previous week which had a total of -1,014,404 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-Extreme with a score of 96.6 percent.

Price Trend-Following Model: Strong Downtrend

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

2-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	11.1	81.2	6.6
– Percent of Open Interest Shorts:	39.9	54.7	4.2
– Net Position:	-1,058,426	970,602	87,824
– Gross Longs:	405,459	2,977,688	241,676
– Gross Shorts:	1,463,885	2,007,086	153,852
– Long to Short Ratio:	0.3 to 1	1.5 to 1	1.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	100.0	96.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-14.7	16.7	-0.9

5-Year Treasury Note Futures:

The 5-Year Treasury Note large speculator standing this week came in at a net position of -1,029,814 contracts in the data reported through Tuesday. This was a weekly reduction of -31,326 contracts from the previous week which had a total of -998,488 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.5 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.9 percent.

Price Trend-Following Model: Strong Downtrend

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

5-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	6.9	84.6	7.3
– Percent of Open Interest Shorts:	27.1	64.4	7.3
– Net Position:	-1,029,814	1,026,687	3,127
– Gross Longs:	348,230	4,297,985	373,393
– Gross Shorts:	1,378,044	3,271,298	370,266
– Long to Short Ratio:	0.3 to 1	1.3 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.5	100.0	81.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-8.5	13.0	-13.3

10-Year Treasury Note Futures:

The 10-Year Treasury Note large speculator standing this week came in at a net position of -780,678 contracts in the data reported through Tuesday. This was a weekly boost of 20,321 contracts from the previous week which had a total of -800,999 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 6.8 percent. The commercials are Bullish-Extreme with a score of 95.9 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 86.7 percent.

Price Trend-Following Model: Strong Downtrend

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

10-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.2	80.2	8.8
– Percent of Open Interest Shorts:	25.6	65.0	7.6
– Net Position:	-780,678	719,909	60,769
– Gross Longs:	434,456	3,798,675	418,993
– Gross Shorts:	1,215,134	3,078,766	358,224
– Long to Short Ratio:	0.4 to 1	1.2 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	6.8	95.9	86.7
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.9	4.0	-6.2

Ultra 10-Year Notes Futures:

The Ultra 10-Year Notes large speculator standing this week came in at a net position of -139,901 contracts in the data reported through Tuesday. This was a weekly lowering of -8,713 contracts from the previous week which had a total of -131,188 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 15.9 percent. The commercials are Bullish with a score of 76.4 percent and the small traders (not shown in chart) are Bullish with a score of 79.9 percent.

Price Trend-Following Model: Weak Uptrend

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

Ultra 10-Year Notes Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	9.9	76.8	11.8
– Percent of Open Interest Shorts:	18.1	65.2	15.2
– Net Position:	-139,901	197,302	-57,401
– Gross Longs:	168,089	1,304,780	201,280
– Gross Shorts:	307,990	1,107,478	258,681
– Long to Short Ratio:	0.5 to 1	1.2 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	15.9	76.4	79.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.7	-8.1	11.5

US Treasury Bonds Futures:

The US Treasury Bonds large speculator standing this week came in at a net position of -139,929 contracts in the data reported through Tuesday. This was a weekly decrease of -24,681 contracts from the previous week which had a total of -115,248 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 39.1 percent. The commercials are Bearish with a score of 48.7 percent and the small traders (not shown in chart) are Bullish with a score of 72.6 percent.

Price Trend-Following Model: Strong Downtrend

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

US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	5.7	79.3	14.3
– Percent of Open Interest Shorts:	16.9	70.7	11.6
– Net Position:	-139,929	106,742	33,187
– Gross Longs:	70,648	985,219	177,299
– Gross Shorts:	210,577	878,477	144,112
– Long to Short Ratio:	0.3 to 1	1.1 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	39.1	48.7	72.6
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-31.5	36.7	-4.6

Ultra US Treasury Bonds Futures:

The Ultra US Treasury Bonds large speculator standing this week came in at a net position of -450,572 contracts in the data reported through Tuesday. This was a weekly decline of -26,881 contracts from the previous week which had a total of -423,691 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 99.2 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 90.3 percent.

Price Trend-Following Model: Strong Downtrend

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

Ultra US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	4.6	83.6	11.5
– Percent of Open Interest Shorts:	34.2	57.7	7.8
– Net Position:	-450,572	394,354	56,218
– Gross Longs:	69,955	1,272,590	174,627
– Gross Shorts:	520,527	878,236	118,409
– Long to Short Ratio:	0.1 to 1	1.4 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.0	99.2	90.3
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-17.2	23.2	-2.3

Article By InvestMacro – Receive our weekly COT Newsletter

Bonds COT Updates Opinions

07 Jul

Bitcoin and the Big Blockchains Update After Steep Runup

Source: Clive Maund (7/4/23)

Technical Analyst Clive Maund takes a look at the current state of Bitcoin and Big Blockchain stocks to tell you where he believes it is all headed.

The article posted on the site toward the end of May looking at Bitcoin and a range of Blockchain stocks turned out to be prescient, for although it took them a couple of weeks longer to get moving, when they did move, they really moved, so that, with the exception of RIOT Platforms (formerly RIOT Blockchain), we are up about 50% on these stocks in a month.

Starting with Bitcoin itself, we see on its latest 6-month chart below that after the article was posted, it dribbled lower toward our revised uptrend channel boundary before turning and taking off strongly higher in the middle of this month, rising sharply to resistance in the vicinity of its mid-April highs where it has stalled out with a tight trading range forming that looks like a bull Flag.

Meanwhile, Hut 8 Mining Corp. (HUT:NASDAQ;HUT:TSX), which is continuing to work on its merger with U.S. Data Mining Group, took off strongly higher in the middle of this month so that it is now up about 50% from where we bought it.

Hive Blockchain has performed very well indeed, rising steeply over the past couple of weeks, so we are now up about 50% from where we bought.

However, it is starting to look overbought and a bit tired here after this big runup, with a toppy-looking doji candle appearing on the chart yesterday, which suggests that a period of consolidation or reaction is imminent, although the persistent strong volume on the advance means that if it does react back, it probably won’t be by very much.

On this chart for HIVE from the late May article, we can see the correctly identified Cup & Handle base that spawned the strong advance.

Moving on, we see that Marathon Digital Holdings Inc. (MARA:NASDAQ) also broke strongly higher at the same time, following a tight standoff that we figured would lead to an upside breakout.

MARA also put in a short-term toppy candle yesterday, so traders may want to scale back positions here to sidestep a possible consolidation / reaction that, again, is unlikely to be severe.

On the chart for MARA from the late May article, we can see that it had already broken out of a rather different-looking Cup & Handle base early in April and had returned to test support at the top of the pattern.

The only one of our small range of Blockchain stocks that hasn’t performed so far is Riot Platforms Inc. (RIOT:NASDAQ) (formerly RIOT Blockchain), and while this may be a sign of incipient weakness, it is still well positioned to break above the nearby resistance level into another upleg, and if it does this upleg is likely to be big.

RIOT’s relatively poor performance in recent weeks may be due to lingering fallout from a “hit piece” on the company and the industry by no less than the New York Times. The company mounted a vigorous response on 10th April, calling the attacks baseless and politically motivated, and from what I know about the NYT as it exists today, such an attack by it may be worn by the victim as a “badge of honor” for as I understand it, truly intelligent and discriminating people no longer take this publication seriously and haven’t done for a long time.

Given the immediate outlook for the other Blockchains reviewed here, there is the possibility that the stock will react back to the support shown on our chart and then turn up, in which case the uptrend boundary will require to be adjusted.

Important Disclosures:

Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

For additional disclosures, please click here.

CliveMaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

Cryptocurrencies Opinions

06 Jul

Chasing Down a Winner

Source: Michael Ballanger (7/3/23)

With investors scrambling at buzzwords, Michael Ballanger of GGM Advisory Inc. looks at one company he believes is a winner beyond the exciting jargon of the day.

There are moments in my long career that stand out as “watershed” moments where a simple telephone call or a chance meeting at a mining conference created an impression upon me that had a discernible impact on my life at the time. The memories of those conversations are vivid, and they rarely leave me, especially when I am confronted with that eerie feeling that occurs at the precise moment of revelation that something important just happened.

A few years back, I wrote a piece entitled “Serendipity,” where I spoke of events that occurred while boating or playing sports or searching out investment ideas that came literally “out of the blue,” as in totally unexpected occurrences but because the outcomes were always favorable, they stand out over the years as “life lessons” and deserve to be passed along.

I was once in a meeting where one of my partners, a rough-and-tumble prison guard from LaRonge, Saskatchewan, got out of his seat and proceeded to explain in no uncertain terms that since stock certificates are made out of newsprint, they deserve little more value than the paper with which they are printed.

When it is all said and done, these glamorized slabs of altered newsprint are really only worth the people that put their names to the certificate, which is why professional money managers would tell us that of all the bullet points on their “Prerequisites for Investment,” there is only one word that matters, and that is the word “management.”

His crystallizing line came when this strapping Prairie lad told the group that “the last time I looked, newsprint is going for a buck eighty-six a pound!”

That statement, coming from a man with, shall I say, “limited” knowledge of the securities world, enlightened me to the stark reality that not all citizens of this planet look at stock certificates with the same kind of shock and awe envy.

Stock certificates are indeed nearly worthless in and of themselves, and only when they are recognized as “titles” to a share of a venture do they begin to get recognition.

In the current market environment, pieces of finely crafted newsprint with detailed etching and meticulous legal scribbling can be worth next to nothing if the word “gold” is contained in the scribbling, or it can be worth a small fortune if the words “artificial intelligence” can be seen.

Ten years ago in Canada, the word “cannabis” magically elevated the value of a tenth-of-a-pound certificate to many times the going rate for newsprint, and a few years later, the word “crypto” replaced “cannabis” creating yet another generation of self-enabled millionaires scalping trading profits from the safety of their cellphones.

When it is all said and done, these glamorized slabs of altered newsprint are really only worth the people that put their names to the certificate, which is why professional money managers would tell us that of all the bullet points on their “Prerequisites for Investment,” there is only one word that matters, and that is the word “management.”

Volt Lithium

With the prior few paragraphs as the appropriate preamble, it is no accident that I had yet another magical moment that only with the fullness of time can be classified as “life-altering.”

I was scanning a few of the websites that cover the companies I follow and about which I write from time to time when I came across a site that posted a screenshot of a list of insiders that had been recently buying stock. As I peered down the list, I came across the name of the Chairman of the Board of a company that I have owned since early 2021, Warner Uhl, with the company being Volt Lithium Corp. (VLT:TSV;VLTLF:US).

It seems that with the stock price down over 65% from the May 24 peak, Mr. Uhl decided to do what I have been doing, and that is buying more of that “glorified newsprint.”

I have spoken to Warner Uhl perhaps twice in my life going back to mid-2021 when I was trying to get a handle on the direction of his company (then called Allied Copper Corp.) after some early hiccups resulted in a trading halt. The second call was after I noticed his first (small) insider transaction, which was just after they announced the move to amalgamate with Volt Lithium Corp. Without hesitation, I rang him up after a brief conversation. I was delighted to learn that he was an aficionado of lithium as well as copper and that he would be staying on as Chairman.

Fast-forward to June 27, 2023.

Insiders of junior Canadian resource deals rarely buy positions in their own deals; they prefer to use the “Directors’ Incentive Options” instead of their own cash to beef up their notional, if not actual, ownership. With markets on the defensive and retail investors puking out positions at the first sign of any size bids, I found the recent insider activity at Volt to be a breath of fresh air but this last purchase by Mr. Uhl caught my undivided attention.

Why Buy Now?

Why buy now? I picked up the phone resulting in a 25-minute conversation with a man who, in his early career, toiled on the Mt. Milligan Project, and the best description of his contribution can be gleaned only after lifting it from his impressive resumé:

2009 – 2013 Project Director, AMEC (Mt. Milligan project)

Project Director for EPCM services, in a joint venture with Fluor, for a 60,000 tpd copper-gold project with open-pit mining, conventional concentrator, gold gravity concentration, water treatment, tailings management, utilities and infrastructure, and an offsite concentrate loading and handling facility. Managed an engineering staff of 250 and an onsite staff of 120 persons overseeing a peak of 1,600 contractors. Oversaw the design, permitting, construction, and commissioning. The work that Mr. Uhl directed was built under budget and on time. Over 5.0 million man-hours without a lost-time accident. All this was accomplished with a very inexperienced industrial workforce and significant participation by local indigenous companies.

For the past several years, Warner has toiled for the mighty Worley Canada, providers of professional services in the energy, chemicals, and resources sectors (including copper and lithium). His title is “Regional Director for Study Management in the Americas, Technology and Expert Solutions, Worley, Canada.”

Warner has over three-hundred project study managers and engineers reporting to him on various projects within a larger company employing over 50,000 people and generating over US$10 billion in sales.

Now, buying 150,000 shares in the open market for CA$40,500 may not seem like a big deal, but to my sexagenarian eyes, it was like a message from the Messiah. I asked Warner today why he bought the stock, and his reply was quite simple. The market was missing the significance of the last press release, which, after third-party vetting and sign-off by Sproule Inc., reported that their pilot plant test confirmed the cost per tonne of a mere US$3,977 required to produce 1,000 tonnes of lithium carbonate from the oilfield brines.

It seems that the “knock” on Volt is that few investors believe their claim that their Direct Lithium Extraction (DLE) technology actually works. There are a number of companies out there that shall remain anonymous that think that their DLE technology will work on a larger scale basis, but to date, nothing compares to Volt.

By calling Warner Uhl, whose company is currently working on a US$3 billion lithium extraction deal in Argentina, I asked a man that knows lithium extraction and all of the challenges to commercial processing of oilfield brines WHY he bought the stock. As obvious as the answer is to everyone close to the deal, It was almost an embarrassment to ask that question.

Volt Lithium Process

His answer was exactly as one would expect; based upon the extrapolation of prospective profitability using a DLE technology that he trusts, the stock price was “disconnected” from its market potential.

The market “disconnect” lies in the mistaken assumption that Volt’s claim is either overstated or false, but if one drills down into Sproule, one will quickly appreciate the significance of their involvement and why IIROC gave their blessing on the release.

Warner went on to explain the “green company” benefits whereby Volt returns formerly toxic brines to the subsurface aquifer in pristine shape, free of all impurities, including oil, for which they are paid a royalty by Cabot Energy. This is a feature of immense benefit to politicians, and with a great deal of government money allocated to the battery metals hunt and to water treatment, it is not a stretch to expect Volt to be approved for government grants as a means of defraying commercial development costs.

“I would urge all shareholders to do what they can to retain their positions because as a longer-term investment, I think they will do quite well.”

That is an endorsement of the highest order from Volt’s Chairman and a person with decades of experience in the building of mines around the world and who is on the record as a buyer of shares.

Under threat of “overkill,” I want to hammer home the significance of Volt’s insider activity, and as you can observe from the graphic shown below, it is not only the Chairman adding to positions. Several directors, as well as CEO Alex Wiley, have stepped up to take advantage of the recent weakness, and over my many decades of dodging the poisonous darts of the insidious TSX Venture Exchange, this is an extremely valuable tool and certainly must be heeded.

Whenever you get a stock guy (me) with several decades behind him discussing DLE technology with a veteran mine builder and engineer (Uhl), it can many times be a difficult interaction, but I have always gravitated to the technical people rather than the “pitchmen” because the validity of the “pitch” lies solely in the hands of the technicians.

Over the past forty-five years, I have encountered so much horse manure in the boardrooms of Bay and Granville Streets that I could fertilize the Canadian Prairies if I could ever have bottled it. This is why the actions of Warner Uhl spoke louder than anything on their website or in their power-point presentation. When phenomenal growth stories are disconnected from the market due to faulty assumptions, they represent truly unique opportunities once one is able to define the disconnect.

As I have now explained this “disconnect,” it explains why Volt Lithium Corp. is now my largest holding and why I am adding to the position from the grandkids’ education pool and Granny’s bingo money and since Granny will want that money back by Labor Day, I must be very confident.

Important Disclosures:

As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volt Lithium Corp.
Michael Ballanger: I, or members of my immediate household or family, own securities of: Volt Lithium Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Michael Ballanger Disclosures

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.

Metals Opinions

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

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