InvestMacro

COT Bonds Charts: Speculator Bets led by 10-Year Bonds & US Treasury Bonds

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

The latest COT data is updated through Tuesday October 8th 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 & US Treasury Bonds

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

Leading the gains for the bond markets was the 10-Year Bonds (183,760 contracts) with the US Treasury Bonds (20,403 contracts) also showing a positive week.

The bond markets with declines in speculator bets for the week were the SOFR 3-Months (-225,896 contracts), the 2-Year Bonds (-46,817 contracts), the Fed Funds (-54,222 contracts), the 5-Year Bonds (-49,535 contracts), the SOFR 1-Month (-27,938 contracts), the Ultra Treasury Bonds (-19,033 contracts) and with the Ultra 10-Year Bonds (-1,918 contracts) also registering lower bets on the week.

Bonds Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Fed Funds & Ultra 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 Fed Funds (90 percent) and the Ultra Treasury Bonds (81 percent) lead the bond markets this week. The SOFR 3-Months (79 percent) come in as the next highest in the weekly strength scores.

On the downside, the 5-Year Bonds (8 percent), the SOFR 1-Month (8 percent), the 10-Year Bonds (16 percent) and the 2-Year Bonds (16 percent) come in at the lowest strength level currently and are in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
Fed Funds (90.0 percent) vs Fed Funds previous week (100.0 percent)
2-Year Bond (16.0 percent) vs 2-Year Bond previous week (19.0 percent)
5-Year Bond (8.4 percent) vs 5-Year Bond previous week (11.4 percent)
10-Year Bond (16.1 percent) vs 10-Year Bond previous week (0.0 percent)
Ultra 10-Year Bond (40.7 percent) vs Ultra 10-Year Bond previous week (41.1 percent)
US Treasury Bond (57.0 percent) vs US Treasury Bond previous week (49.8 percent)
Ultra US Treasury Bond (80.6 percent) vs Ultra US Treasury Bond previous week (89.4 percent)
SOFR 1-Month (7.7 percent) vs SOFR 1-Month previous week (15.0 percent)
SOFR 3-Months (79.3 percent) vs SOFR 3-Months previous week (91.0 percent)

Fed Funds top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Fed Funds (70 percent) lead the past six weeks trends for bonds. The Ultra 10-Year Bonds (5 percent) and the 5-Year Bonds (3 percent) are the next highest positive movers in the latest trends data.

The US Treasury Bonds (-22 percent) and the 2-Year Bonds (-13 percent) lead the downside trend scores currently with the SOFR 3-Months (-9 percent) and the Ultra Treasury Bonds (-6 percent) following next with lower trend scores.

Strength Trend Statistics:
Fed Funds (69.8 percent) vs Fed Funds previous week (70.6 percent)
2-Year Bond (-12.5 percent) vs 2-Year Bond previous week (-1.6 percent)
5-Year Bond (3.4 percent) vs 5-Year Bond previous week (11.4 percent)
10-Year Bond (-4.0 percent) vs 10-Year Bond previous week (-9.3 percent)
Ultra 10-Year Bond (5.3 percent) vs Ultra 10-Year Bond previous week (11.5 percent)
US Treasury Bond (-21.6 percent) vs US Treasury Bond previous week (-22.0 percent)
Ultra US Treasury Bond (-5.8 percent) vs Ultra US Treasury Bond previous week (28.9 percent)
SOFR 1-Month (-47.6 percent) vs SOFR 1-Month previous week (-50.9 percent)
SOFR 3-Months (-9.4 percent) vs SOFR 3-Months previous week (11.0 percent)

30-Day Federal Funds Futures:

The 30-Day Federal Funds large speculator standing this week reached a net position of 191,471 contracts in the data reported through Tuesday. This was a weekly reduction of -54,222 contracts from the previous week which had a total of 245,693 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 90.0 percent. The commercials are Bearish-Extreme with a score of 9.5 percent and the small traders (not shown in chart) are Bullish with a score of 62.4 percent.

Price Trend-Following Model: Downtrend

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

30-Day Federal Funds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.1	50.9	4.1
– Percent of Open Interest Shorts:	13.9	59.5	4.6
– Net Position:	191,471	-179,097	-12,374
– Gross Longs:	481,131	1,059,607	84,379
– Gross Shorts:	289,660	1,238,704	96,753
– Long to Short Ratio:	1.7 to 1	0.9 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	90.0	9.5	62.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	69.8	-68.4	-4.2

Secured Overnight Financing Rate (3-Month) Futures:

The Secured Overnight Financing Rate (3-Month) large speculator standing this week reached a net position of 368,420 contracts in the data reported through Tuesday. This was a weekly lowering of -225,896 contracts from the previous week which had a total of 594,316 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 79.3 percent. The commercials are Bearish with a score of 20.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 90.4 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:	15.9	55.7	1.0
– Percent of Open Interest Shorts:	12.3	59.4	0.9
– Net Position:	368,420	-373,123	4,703
– Gross Longs:	1,630,441	5,720,105	100,511
– Gross Shorts:	1,262,021	6,093,228	95,808
– Long to Short Ratio:	1.3 to 1	0.9 to 1	1.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	79.3	20.3	90.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-9.4	9.1	3.4

Individual Bond Markets:

Secured Overnight Financing Rate (1-Month) Futures:

The Secured Overnight Financing Rate (1-Month) large speculator standing this week reached a net position of -222,460 contracts in the data reported through Tuesday. This was a weekly lowering of -27,938 contracts from the previous week which had a total of -194,522 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 7.7 percent. The commercials are Bullish-Extreme with a score of 92.5 percent and the small traders (not shown in chart) are Bullish with a score of 51.0 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

SOFR 1-Month Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.2	66.4	0.8
– Percent of Open Interest Shorts:	29.7	46.8	0.9
– Net Position:	-222,460	223,071	-611
– Gross Longs:	115,999	755,402	9,260
– Gross Shorts:	338,459	532,331	9,871
– Long to Short Ratio:	0.3 to 1	1.4 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	7.7	92.5	51.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-47.6	47.5	1.5

2-Year Treasury Note Futures:

The 2-Year Treasury Note large speculator standing this week reached a net position of -1,225,036 contracts in the data reported through Tuesday. This was a weekly reduction of -46,817 contracts from the previous week which had a total of -1,178,219 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.0 percent. The commercials are Bullish with a score of 78.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.0 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

2-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	14.3	77.6	6.6
– Percent of Open Interest Shorts:	41.9	54.3	2.3
– Net Position:	-1,225,036	1,034,896	190,140
– Gross Longs:	635,254	3,446,184	292,339
– Gross Shorts:	1,860,290	2,411,288	102,199
– Long to Short Ratio:	0.3 to 1	1.4 to 1	2.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.0	78.0	96.0
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.5	13.8	2.5

5-Year Treasury Note Futures:

The 5-Year Treasury Note large speculator standing this week reached a net position of -1,600,325 contracts in the data reported through Tuesday. This was a weekly reduction of -49,535 contracts from the previous week which had a total of -1,550,790 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 8.4 percent. The commercials are Bullish-Extreme with a score of 92.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 89.9 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

5-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.8	83.4	7.4
– Percent of Open Interest Shorts:	33.4	61.0	4.3
– Net Position:	-1,600,325	1,404,836	195,489
– Gross Longs:	488,596	5,223,372	463,588
– Gross Shorts:	2,088,921	3,818,536	268,099
– Long to Short Ratio:	0.2 to 1	1.4 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	8.4	92.8	89.9
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.4	-4.2	-0.9

10-Year Treasury Note Futures:

The 10-Year Treasury Note large speculator standing this week reached a net position of -960,129 contracts in the data reported through Tuesday. This was a weekly gain of 183,760 contracts from the previous week which had a total of -1,143,889 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 16.1 percent. The commercials are Bullish with a score of 77.4 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 99.1 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

10-Year Treasury Note Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.1	77.6	9.8
– Percent of Open Interest Shorts:	30.0	60.9	6.6
– Net Position:	-960,129	805,589	154,540
– Gross Longs:	489,605	3,746,029	475,440
– Gross Shorts:	1,449,734	2,940,440	320,900
– Long to Short Ratio:	0.3 to 1	1.3 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	16.1	77.4	99.1
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.0	6.2	-0.9

Ultra 10-Year Notes Futures:

The Ultra 10-Year Notes large speculator standing this week reached a net position of -82,467 contracts in the data reported through Tuesday. This was a weekly reduction of -1,918 contracts from the previous week which had a total of -80,549 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 Bearish with a score of 47.3 percent and the small traders (not shown in chart) are Bullish with a score of 69.6 percent.

Price Trend-Following Model: Weak Uptrend

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

Ultra 10-Year Notes Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.0	73.9	9.6
– Percent of Open Interest Shorts:	19.7	66.9	12.9
– Net Position:	-82,467	155,448	-72,981
– Gross Longs:	352,173	1,630,033	211,286
– Gross Shorts:	434,640	1,474,585	284,267
– Long to Short Ratio:	0.8 to 1	1.1 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	40.7	47.3	69.6
– Strength Index Reading (3 Year Range):	Bearish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.3	3.0	-21.3

US Treasury Bonds Futures:

The US Treasury Bonds large speculator standing this week reached a net position of -76,175 contracts in the data reported through Tuesday. This was a weekly advance of 20,403 contracts from the previous week which had a total of -96,578 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 57.0 percent. The commercials are Bearish with a score of 20.3 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 88.4 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	20.6	65.1	13.5
– Percent of Open Interest Shorts:	24.9	66.6	7.7
– Net Position:	-76,175	-25,386	101,561
– Gross Longs:	362,540	1,148,669	237,597
– Gross Shorts:	438,715	1,174,055	136,036
– Long to Short Ratio:	0.8 to 1	1.0 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	57.0	20.3	88.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-21.6	19.4	3.0

Ultra US Treasury Bonds Futures:

The Ultra US Treasury Bonds large speculator standing this week reached a net position of -282,251 contracts in the data reported through Tuesday. This was a weekly fall of -19,033 contracts from the previous week which had a total of -263,218 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 80.6 percent. The commercials are Bearish with a score of 26.6 percent and the small traders (not shown in chart) are Bearish with a score of 28.8 percent.

Price Trend-Following Model: Weak Uptrend

Our weekly trend-following model classifies the current market price position as: Weak Uptrend.

Ultra US Treasury Bonds Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	10.1	79.2	10.6
– Percent of Open Interest Shorts:	26.7	63.6	9.6
– Net Position:	-282,251	265,926	16,325
– Gross Longs:	172,856	1,351,055	180,774
– Gross Shorts:	455,107	1,085,129	164,449
– Long to Short Ratio:	0.4 to 1	1.2 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	80.6	26.6	28.8
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-5.8	6.1	0.4

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.

12 Oct

COT Soft Commodities Charts: Speculator Bets led higher by Corn & Soybeans

By InvestMacro

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

The latest COT data is updated through Tuesday October 8th 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 higher by Corn & Soybeans

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

Leading the gains for the softs markets was Corn (43,264 contracts) with Soybeans (22,511 contracts), Lean Hogs (14,156 contracts), Live Cattle (11,909 contracts), Soybean Oil (10,065 contracts) and with Cocoa (558 contracts) also showing a positive week.

The markets with the declines in speculator bets this week were Sugar (-26,375 contracts) with Wheat (-7,366 contracts), Coffee (-5,098 contracts), Soybean Meal (-4,175 contracts) and Cotton (-1,553 contracts) also registering lower bets on the week.

Soft Commodities Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by Coffee & Soybean Oil

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 Coffee (87 percent) and Soybean Oil (74 percent) lead the softs markets this week. Soybean Meal (68 percent), Lean Hogs (67 percent) and Wheat (60 percent) come in as the next highest in the weekly strength scores.

On the downside, Cotton (22 percent) and Soybeans (34 percent) come in at the lowest strength levels currently followed next by Sugar (38 percent) and Corn (38 percent).

Strength Statistics:
Corn (38.5 percent) vs Corn previous week (33.0 percent)
Sugar (37.8 percent) vs Sugar previous week (47.1 percent)
Coffee (87.0 percent) vs Coffee previous week (92.0 percent)
Soybeans (34.5 percent) vs Soybeans previous week (29.2 percent)
Soybean Oil (74.4 percent) vs Soybean Oil previous week (68.9 percent)
Soybean Meal (68.4 percent) vs Soybean Meal previous week (70.1 percent)
Live Cattle (48.8 percent) vs Live Cattle previous week (35.9 percent)
Lean Hogs (67.1 percent) vs Lean Hogs previous week (53.4 percent)
Cotton (22.3 percent) vs Cotton previous week (23.3 percent)
Cocoa (50.7 percent) vs Cocoa previous week (50.1 percent)
Wheat (60.4 percent) vs Wheat previous week (65.7 percent)

Soybean Oil & Lean Hogs top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Soybean Oil (49 percent) and Lean Hogs (44 percent) lead the past six weeks trends for soft commodities. Soybean Meal (34 percent), Live Cattle (33 percent) and Soybeans (31 percent) are the next highest positive movers in the latest trends data.

Coffee (-4 percent) leads the downside trend scores currently and is the only market with a negative trend.

Strength Trend Statistics:
Corn (23.5 percent) vs Corn previous week (20.1 percent)
Sugar (19.5 percent) vs Sugar previous week (38.8 percent)
Coffee (-4.1 percent) vs Coffee previous week (3.6 percent)
Soybeans (31.4 percent) vs Soybeans previous week (24.8 percent)
Soybean Oil (49.3 percent) vs Soybean Oil previous week (50.8 percent)
Soybean Meal (34.0 percent) vs Soybean Meal previous week (37.1 percent)
Live Cattle (33.4 percent) vs Live Cattle previous week (18.6 percent)
Lean Hogs (43.6 percent) vs Lean Hogs previous week (39.6 percent)
Cotton (16.5 percent) vs Cotton previous week (21.2 percent)
Cocoa (9.9 percent) vs Cocoa previous week (10.7 percent)
Wheat (13.8 percent) vs Wheat previous week (14.1 percent)

Individual Soft Commodities Markets:

CORN Futures:

The CORN large speculator standing this week recorded a net position of 36,071 contracts in the data reported through Tuesday. This was a weekly gain of 43,264 contracts from the previous week which had a total of -7,193 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 Bearish with a score of 38.5 percent. The commercials are Bullish with a score of 65.2 percent and the small traders (not shown in chart) are Bearish with a score of 32.9 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

CORN Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	21.7	44.9	8.5
– Percent of Open Interest Shorts:	19.2	43.5	12.3
– Net Position:	36,071	20,228	-56,299
– Gross Longs:	323,640	670,624	127,234
– Gross Shorts:	287,569	650,396	183,533
– Long to Short Ratio:	1.1 to 1	1.0 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	38.5	65.2	32.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	23.5	-20.6	-39.5

SUGAR Futures:

The SUGAR large speculator standing this week recorded a net position of 103,086 contracts in the data reported through Tuesday. This was a weekly reduction of -26,375 contracts from the previous week which had a total of 129,461 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 37.8 percent. The commercials are Bullish with a score of 56.3 percent and the small traders (not shown in chart) are Bullish with a score of 67.2 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

SUGAR Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.8	47.8	10.1
– Percent of Open Interest Shorts:	15.9	65.2	5.6
– Net Position:	103,086	-139,667	36,581
– Gross Longs:	230,158	382,030	81,111
– Gross Shorts:	127,072	521,697	44,530
– Long to Short Ratio:	1.8 to 1	0.7 to 1	1.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	37.8	56.3	67.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	19.5	-24.9	41.0

COFFEE Futures:

The COFFEE large speculator standing this week recorded a net position of 62,715 contracts in the data reported through Tuesday. This was a weekly decrease of -5,098 contracts from the previous week which had a total of 67,813 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 87.0 percent. The commercials are Bearish-Extreme with a score of 12.2 percent and the small traders (not shown in chart) are Bullish with a score of 71.2 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

COFFEE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	36.2	39.8	4.1
– Percent of Open Interest Shorts:	6.6	71.1	2.4
– Net Position:	62,715	-66,254	3,539
– Gross Longs:	76,743	84,209	8,621
– Gross Shorts:	14,028	150,463	5,082
– Long to Short Ratio:	5.5 to 1	0.6 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	87.0	12.2	71.2
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.1	4.1	-1.2

SOYBEANS Futures:

The SOYBEANS large speculator standing this week recorded a net position of -51,186 contracts in the data reported through Tuesday. This was a weekly boost of 22,511 contracts from the previous week which had a total of -73,697 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 34.5 percent. The commercials are Bullish with a score of 69.5 percent and the small traders (not shown in chart) are Bearish with a score of 27.1 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

SOYBEANS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	16.4	59.9	5.3
– Percent of Open Interest Shorts:	22.2	50.4	9.0
– Net Position:	-51,186	83,915	-32,729
– Gross Longs:	144,361	528,197	46,489
– Gross Shorts:	195,547	444,282	79,218
– Long to Short Ratio:	0.7 to 1	1.2 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	34.5	69.5	27.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	31.4	-28.5	-47.0

SOYBEAN OIL Futures:

The SOYBEAN OIL large speculator standing this week recorded a net position of 60,259 contracts in the data reported through Tuesday. This was a weekly lift of 10,065 contracts from the previous week which had a total of 50,194 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 74.4 percent. The commercials are Bearish with a score of 32.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.0 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

SOYBEAN OIL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	29.0	48.2	5.9
– Percent of Open Interest Shorts:	17.4	60.1	5.5
– Net Position:	60,259	-62,043	1,784
– Gross Longs:	150,758	250,162	30,403
– Gross Shorts:	90,499	312,205	28,619
– Long to Short Ratio:	1.7 to 1	0.8 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	74.4	32.3	21.0
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	49.3	-43.6	-7.0

SOYBEAN MEAL Futures:

The SOYBEAN MEAL large speculator standing this week recorded a net position of 99,847 contracts in the data reported through Tuesday. This was a weekly decline of -4,175 contracts from the previous week which had a total of 104,022 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 68.4 percent. The commercials are Bearish with a score of 27.1 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 81.5 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

SOYBEAN MEAL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.9	40.9	9.8
– Percent of Open Interest Shorts:	11.0	63.8	4.8
– Net Position:	99,847	-127,797	27,950
– Gross Longs:	160,991	227,883	54,493
– Gross Shorts:	61,144	355,680	26,543
– Long to Short Ratio:	2.6 to 1	0.6 to 1	2.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	68.4	27.1	81.5
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	34.0	-35.7	33.3

LIVE CATTLE Futures:

The LIVE CATTLE large speculator standing this week recorded a net position of 64,760 contracts in the data reported through Tuesday. This was a weekly lift of 11,909 contracts from the previous week which had a total of 52,851 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 Bullish with a score of 66.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 0.0 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

LIVE CATTLE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	40.2	34.5	7.7
– Percent of Open Interest Shorts:	19.9	48.9	13.7
– Net Position:	64,760	-45,798	-18,962
– Gross Longs:	128,051	110,049	24,596
– Gross Shorts:	63,291	155,847	43,558
– Long to Short Ratio:	2.0 to 1	0.7 to 1	0.6 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	48.8	66.3	0.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	33.4	-29.4	-32.3

LEAN HOGS Futures:

The LEAN HOGS large speculator standing this week recorded a net position of 33,305 contracts in the data reported through Tuesday. This was a weekly lift of 14,156 contracts from the previous week which had a total of 19,149 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 67.1 percent. The commercials are Bearish with a score of 31.0 percent and the small traders (not shown in chart) are Bullish with a score of 59.7 percent.

Price Trend-Following Model: Downtrend

Our weekly trend-following model classifies the current market price position as: Downtrend.

LEAN HOGS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	42.1	34.0	7.3
– Percent of Open Interest Shorts:	30.8	43.6	9.1
– Net Position:	33,305	-28,030	-5,275
– Gross Longs:	123,646	99,845	21,505
– Gross Shorts:	90,341	127,875	26,780
– Long to Short Ratio:	1.4 to 1	0.8 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	67.1	31.0	59.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	43.6	-48.2	-6.5

COTTON Futures:

The COTTON large speculator standing this week recorded a net position of -11,641 contracts in the data reported through Tuesday. This was a weekly reduction of -1,553 contracts from the previous week which had a total of -10,088 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.3 percent. The commercials are Bullish with a score of 77.4 percent and the small traders (not shown in chart) are Bearish with a score of 23.9 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

COTTON Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	25.3	49.4	5.7
– Percent of Open Interest Shorts:	30.1	45.1	5.2
– Net Position:	-11,641	10,404	1,237
– Gross Longs:	61,941	120,801	14,048
– Gross Shorts:	73,582	110,397	12,811
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	22.3	77.4	23.9
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	16.5	-16.1	11.7

COCOA Futures:

The COCOA large speculator standing this week recorded a net position of 39,936 contracts in the data reported through Tuesday. This was a weekly rise of 558 contracts from the previous week which had a total of 39,378 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 50.7 percent. The commercials are Bearish with a score of 45.0 percent and the small traders (not shown in chart) are Bullish with a score of 71.6 percent.

Price Trend-Following Model: Strong Downtrend

Our weekly trend-following model classifies the current market price position as: Strong Downtrend.

COCOA Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	39.6	31.8	8.0
– Percent of Open Interest Shorts:	10.5	65.9	3.0
– Net Position:	39,936	-46,917	6,981
– Gross Longs:	54,387	43,661	11,054
– Gross Shorts:	14,451	90,578	4,073
– Long to Short Ratio:	3.8 to 1	0.5 to 1	2.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	50.7	45.0	71.6
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.9	-9.5	-2.4

WHEAT Futures:

The WHEAT large speculator standing this week recorded a net position of -13,498 contracts in the data reported through Tuesday. This was a weekly decline of -7,366 contracts from the previous week which had a total of -6,132 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 60.4 percent. The commercials are Bearish with a score of 40.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.8 percent.

Price Trend-Following Model: Weak Downtrend

Our weekly trend-following model classifies the current market price position as: Weak Downtrend.

WHEAT Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.3	35.4	7.8
– Percent of Open Interest Shorts:	31.8	30.4	9.4
– Net Position:	-13,498	19,744	-6,246
– Gross Longs:	111,760	139,482	30,672
– Gross Shorts:	125,258	119,738	36,918
– Long to Short Ratio:	0.9 to 1	1.2 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	60.4	40.0	23.8
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	13.8	-12.3	-16.3

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Financial News Soft Commodities

12 Oct

COT Stock Market Charts: Speculator Bets led by MSCI EAFE-Mini & VIX

By InvestMacro

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

The latest COT data is updated through Tuesday October 8th 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 MSCI EAFE-Mini & VIX

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

Leading the gains for the stock markets was the VIX (12,869 contracts) and with the MSCI EAFE-Mini (638 contracts) also showing a positive week.

The markets with the declines in speculator bets this week were the Russell-Mini (-15,342 contracts), the S&P500-Mini (-13,189 contracts), the Nasdaq-Mini (-2,784 contracts), the DowJones-Mini (-2,764 contracts) and with the Nikkei 225 (-498 contracts) also registering lower bets on the week.

Stock Market Net Speculators Leaderboard

Legend: Weekly Speculators Change | Speculators Current Net Position | Speculators Strength Score compared to last 3-Years (0-100 range)

Strength Scores led by VIX & Russell-Mini

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the VIX (100 percent) and the Russell-Mini (88 percent) lead the stock markets this week. The DowJones-Mini (84 percent) and the S&P500-Mini (64 percent) come in as the next highest in the weekly strength scores.

On the downside, the MSCI EAFE-Mini (38 percent) comes in at the lowest strength level currently.

Strength Statistics:
VIX (100.0 percent) vs VIX previous week (87.5 percent)
S&P500-Mini (63.9 percent) vs S&P500-Mini previous week (65.9 percent)
DowJones-Mini (83.5 percent) vs DowJones-Mini previous week (88.0 percent)
Nasdaq-Mini (59.8 percent) vs Nasdaq-Mini previous week (64.1 percent)
Russell2000-Mini (88.1 percent) vs Russell2000-Mini previous week (98.9 percent)
Nikkei USD (59.2 percent) vs Nikkei USD previous week (63.4 percent)
EAFE-Mini (38.4 percent) vs EAFE-Mini previous week (37.7 percent)

VIX & Russell-Mini top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the VIX (27 percent) leads the past six weeks trends for the stock markets. The Russell-Mini (14 percent), the S&P500-Mini (11 percent) and the DowJones-Mini (10 percent) are the next highest positive movers in the latest trends data.

The Nasdaq-Mini (-13 percent) leads the downside trend scores currently with the Nikkei USD (-6 percent) coming in as the next market with lower trend scores.

Strength Trend Statistics:
VIX (26.6 percent) vs VIX previous week (8.4 percent)
S&P500-Mini (11.4 percent) vs S&P500-Mini previous week (13.8 percent)
DowJones-Mini (9.6 percent) vs DowJones-Mini previous week (16.8 percent)
Nasdaq-Mini (-12.6 percent) vs Nasdaq-Mini previous week (7.3 percent)
Russell2000-Mini (14.3 percent) vs Russell2000-Mini previous week (33.5 percent)
Nikkei USD (-6.3 percent) vs Nikkei USD previous week (16.2 percent)
EAFE-Mini (5.8 percent) vs EAFE-Mini previous week (10.3 percent)

Individual Stock Market Charts:

VIX Volatility Futures:

The VIX Volatility large speculator standing this week recorded a net position of -3,008 contracts in the data reported through Tuesday. This was a weekly lift of 12,869 contracts from the previous week which had a total of -15,877 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 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish with a score of 79.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

VIX Volatility Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.4	40.1	7.7
– Percent of Open Interest Shorts:	29.3	38.8	8.2
– Net Position:	-3,008	4,478	-1,470
– Gross Longs:	96,893	136,562	26,327
– Gross Shorts:	99,901	132,084	27,797
– Long to Short Ratio:	1.0 to 1	1.0 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	79.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	26.6	-24.0	-10.0

S&P500 Mini Futures:

The S&P500 Mini large speculator standing this week recorded a net position of -5,644 contracts in the data reported through Tuesday. This was a weekly decline of -13,189 contracts from the previous week which had a total of 7,545 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 63.9 percent. The commercials are Bearish with a score of 27.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 86.5 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

S&P500 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	15.1	71.0	12.3
– Percent of Open Interest Shorts:	15.4	75.1	8.0
– Net Position:	-5,644	-87,667	93,311
– Gross Longs:	322,686	1,514,535	263,087
– Gross Shorts:	328,330	1,602,202	169,776
– Long to Short Ratio:	1.0 to 1	0.9 to 1	1.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	63.9	27.8	86.5
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	11.4	-8.1	-8.2

Dow Jones Mini Futures:

The Dow Jones Mini large speculator standing this week recorded a net position of 14,286 contracts in the data reported through Tuesday. This was a weekly fall of -2,764 contracts from the previous week which had a total of 17,050 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 83.5 percent. The commercials are Bearish-Extreme with a score of 15.2 percent and the small traders (not shown in chart) are Bullish with a score of 63.9 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

Dow Jones Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.3	57.5	16.2
– Percent of Open Interest Shorts:	7.4	76.2	14.4
– Net Position:	14,286	-15,843	1,557
– Gross Longs:	20,585	48,713	13,762
– Gross Shorts:	6,299	64,556	12,205
– Long to Short Ratio:	3.3 to 1	0.8 to 1	1.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	83.5	15.2	63.9
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	9.6	-7.8	-3.2

Nasdaq Mini Futures:

The Nasdaq Mini large speculator standing this week recorded a net position of 13,295 contracts in the data reported through Tuesday. This was a weekly lowering of -2,784 contracts from the previous week which had a total of 16,079 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 59.8 percent. The commercials are Bearish with a score of 25.4 percent and the small traders (not shown in chart) are Bullish with a score of 76.4 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

Nasdaq Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	22.8	56.8	15.7
– Percent of Open Interest Shorts:	17.5	66.7	11.1
– Net Position:	13,295	-24,754	11,459
– Gross Longs:	57,058	141,994	39,326
– Gross Shorts:	43,763	166,748	27,867
– Long to Short Ratio:	1.3 to 1	0.9 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.8	25.4	76.4
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-12.6	12.5	-6.3

Russell 2000 Mini Futures:

The Russell 2000 Mini large speculator standing this week recorded a net position of 5,007 contracts in the data reported through Tuesday. This was a weekly decrease of -15,342 contracts from the previous week which had a total of 20,349 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 88.1 percent. The commercials are Bearish-Extreme with a score of 11.2 percent and the small traders (not shown in chart) are Bullish with a score of 74.4 percent.

Price Trend-Following Model: Uptrend

Our weekly trend-following model classifies the current market price position as: Uptrend.

Russell 2000 Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	17.8	72.7	7.2
– Percent of Open Interest Shorts:	16.6	76.9	4.1
– Net Position:	5,007	-18,479	13,472
– Gross Longs:	78,784	322,420	31,844
– Gross Shorts:	73,777	340,899	18,372
– Long to Short Ratio:	1.1 to 1	0.9 to 1	1.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	88.1	11.2	74.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	14.3	-11.3	-7.2

Nikkei Stock Average (USD) Futures:

The Nikkei Stock Average (USD) large speculator standing this week recorded a net position of -2,464 contracts in the data reported through Tuesday. This was a weekly decrease of -498 contracts from the previous week which had a total of -1,966 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 37.5 percent and the small traders (not shown in chart) are Bullish with a score of 60.1 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

Nikkei Stock Average Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	2.0	70.2	27.7
– Percent of Open Interest Shorts:	24.7	55.7	19.5
– Net Position:	-2,464	1,576	888
– Gross Longs:	221	7,620	3,008
– Gross Shorts:	2,685	6,044	2,120
– Long to Short Ratio:	0.1 to 1	1.3 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.2	37.5	60.1
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.3	4.8	1.0

MSCI EAFE Mini Futures:

The MSCI EAFE Mini large speculator standing this week recorded a net position of -28,274 contracts in the data reported through Tuesday. This was a weekly advance of 638 contracts from the previous week which had a total of -28,912 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 38.4 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 46.8 percent.

Price Trend-Following Model: Strong Uptrend

Our weekly trend-following model classifies the current market price position as: Strong Uptrend.

MSCI EAFE Mini Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	7.8	89.0	3.0
– Percent of Open Interest Shorts:	14.7	83.6	1.5
– Net Position:	-28,274	22,292	5,982
– Gross Longs:	31,695	363,803	12,173
– Gross Shorts:	59,969	341,511	6,191
– Long to Short Ratio:	0.5 to 1	1.1 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	38.4	59.3	46.8
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	5.8	-4.0	-7.6

Article By InvestMacro – Receive our weekly COT Newsletter

COT Updates Financial News Stock Market News

11 Oct

Gold Recovers Amid Mixed US Economic Indicators

By RoboForex Analytical Department

Gold prices recovered, reaching 2,644.00 USD per troy ounce on Friday, as investors navigated mixed signals from recent US economic data. The resilience in September’s employment market introduced some hesitations regarding the Federal Reserve’s pace of monetary easing, as the robust job data might warrant a less aggressive approach to rate cuts.

Recent inflation reports further complicated the market. While the overall consumer price index slowed, it was less than anticipated, and core inflation, which excludes volatile food and energy prices, actually increased. These developments have hindered progress in easing price pressures, leading to adjustments in expectations for US monetary policy.

Initially, there was speculation of a significant 50-basis-point rate cut; however, given the current economic landscape, a more conservative rate cut of 25 basis points is now deemed more likely at the Fed’s November meeting. This scenario holds an 86% probability, according to market forecasts. For gold, which does not yield coupon income, the prospect of easing by the US Federal Open Market Committee (FOMC) remains a positive catalyst, particularly in a lower interest rate environment where bonds and other interest-bearing assets become less competitive.

Despite the recent uptick, gold is on track to register its second consecutive weekly decline.

Technical analysis of gold (XAU/USD)

The gold market experienced a correction down to 2,605.00 but has since shown signs of resurgence. The current technical setup suggests a potential continuation towards 2,676.50, which would mark the next target in this upward trend. Following the achievement of this level, a correction back to 2,645.00 may occur. This bullish scenario is supported by the MACD indicator, which, although below zero, is gearing up for a potential rise, indicating strengthening momentum.

On the hourly chart, gold has formed a consolidation range above 2,605.00 and has broken upwards. It nearly reached the target of 2,644.00. Today, we might see the formation of a narrow consolidation range, and if a downward exit occurs, a corrective move to 2,625.00 could be expected. Following this correction, the market may gear up for another rise towards 2,662.00. This forecast is technically backed by the Stochastic oscillator, with its signal line currently above 80 but poised to start a decline, suggesting a short-term pullback before further gains.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Metals

11 Oct

Hurricane Milton is putting downward pressure on natural gas and upward pressure on oil

By JustMarkets

At Thursday’s close, the Dow Jones Index (US30) was down 0.14%, while the S&P 500 Index (US500) decreased by 0.21%. The NASDAQ Technology Index (US100) closed negative 0.05%. The US stocks closed slightly lower on Thursday following the release of a sharper-than-expected inflation report, adding to uncertainty over the Federal Reserve’s upcoming rate decision in November.

The US inflation eased to 2.4% in September but exceeded average expectations of 2.3%, halting recent progress on disinflation amid rising housing, transportation, and food prices. Nevertheless, bullish assets received support from a surge in jobless claims, which refuted the view that the US labor market remains too resistant to restrictive interest rates following the release of the latest jobs report. Despite the inflation data, Fed officials are divided on whether to keep cutting rates, with some favoring a pause.

The Canadian dollar weakened to 1.37 per US dollar in October, hitting a nine-week low amid declining foreign exchange inflows and a stronger US dollar. Canada’s trade deficit widened to 1.10 billion Canadian dollars in August, the widest since May. This was helped by a 1.0% drop in exports, particularly a 4.1% drop in shipments of crude oil, the country’s main export. In addition, expectations of softening labor market data due out today fueled speculation of further monetary easing by the Bank of Canada.

Equity markets in Europe mostly fell yesterday. Germany’s DAX (DE40) fell by 0.23%, France’s CAC 40 (FR40) closed down 0.24%, Spain’s IBEX 35 (ES35) lost 0.72%, and the UK’s FTSE 100 (UK100) closed negative 0.07%.

In Europe, reports from the ECB’s last monetary policy meeting in September showed that the ECB wanted to keep options open for the next meetings and took a cautious stance on the next move. The Central Bank is expected to cut interest rates by 25 bps next week, the third cut this year.

WTI crude prices rose by 3.5% to $75.8 a barrel on Thursday amid rising demand for fuel in the US after Hurricane Milton hit Florida, concerns about supply disruptions from the Middle East, and expectations of rising energy demand in the US and China. Hurricane Milton knocked out power to more than 3.4 million homes and businesses, and nearly a quarter of gas stations across the state ran out of gasoline. These outages in one of the world’s largest oil-consuming regions contributed to the price spike. In addition, markets remain choppy, especially after Israel’s defense minister vowed that the response to Iran will be “deadly, precise and unexpected.” Additional pressure on prices comes from weak demand estimates, reinforced by China’s recent briefing, which provided few specifics on additional stimulus measures.

The US natural gas (XNG/USD) prices fell to $2.66/MMBtu, extending their decline from a three-month high of $3, as evidence of high supply reinforced weaker demand caused by hurricanes in the southeastern United States. New data from the EIA showed that natural gas inventories in the lower 48 states rose by 82 billion cubic feet in the week ending October 4, the biggest increase since March, and sharply above market expectations of a 71 billion cubic feet increase. Bearish pressure was also driven by the aftermath of Hurricane Milton on Florida’s Gulf Coast, which forced residential power outages and reduced electricity demand from gas-fired generators.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was up 0.26%, China’s FTSE China A50 (CHA50) jumped 2.24%, Hong Kong’s Hang Seng (HK50) added 2.98%, and Australia’s ASX 200 (AU200) posted a modest 0.43% gain. Investors are cautiously awaiting the announcement of further stimulus measures from the Finance Ministry’s press conference on Saturday. Markets anticipate that officials will announce a major fiscal stimulus package, which is expected to amount to 2–3 trillion yuan. On Thursday, China’s Central Bank opened a 500 billion yuan swap facility to fund stock purchases by financial institutions as the recent stimulus rally began to fade.

The Bank of Korea cut its benchmark rate by 25 bps to 3.25% at its October meeting, the first cut since May 2020, in line with market estimates. The move brought borrowing costs to the lowest level in nearly two years, reflecting easing inflation, lower economic output, and efforts to curb household debt caused by mortgages.

S&P 500 (US500) 5,780.05 −11.99 (−0.21%)

Dow Jones (US30) 42,454.12 −57.88 (−0.14%)

DAX (DE40) 19,210.90 −44.03 (−0.23%)

FTSE 100 (UK100) 8,237.73 −6.01 (−0.07%)

USD Index 102.85 −0.08 (−0.07%)

News feed for: 2024.10.11

UK GDP (m/m) at 09:00 (GMT+3);
UK Industrial Production (m/m) at 09:00 (GMT+3);
UK Manufacturing Production (m/m) at 09:00 (GMT+3);
UK Trade Balance (m/m) at 09:00 (GMT+3);
German Consumer Price Index (m/m) at 09:00 (GMT+3);
US Producer Price Index (m/m) at 15:30 (GMT+3);
Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
Canada BoC Business Outlook Survey (m/m) at 17:30 (GMT+3).

By JustMarkets

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

Economics & Fundamentals Financial News

11 Oct

Week Ahead: Will TSMC rejoin the trillion-dollar club?

By ForexTime

US listed TSMC shares ↑ almost 80% YTD

Less than 4% away from all-time high created in July

Forward guidance for Q4 in focus

FXTM’s TWN index could see fresh volatility

Technical levels for TSMC – $192.65, $183.00 and $177.00

Another slew of key data releases and corporate earnings could rock markets in the week ahead:

Saturday, 12th October

CN50: China’s Ministry of Finance holds briefing

Sunday, 13th October

CN50: China PPI, CPI

Monday, 14th October

CN50: China trade
US500: Fed Governor Christopher Waller speech

Tuesday, 15th October

CAD: Canada CPI, existing home sales
EU50: Eurozone industrial production, Germany ZEW survey
JP225: Japan industrial production
UK100: UK jobless claims, unemployment
US500: Goldman Sachs, Bank of America, Citigroup earnings

Wednesday, 16th October

NZD: New Zealand CPI
ZAR: South Africa retail sales
UK100: UK CPI
NETH25: ASML earnings
US500: Morgan Stanley earnings

Thursday, 17th October

AU200: Australia unemployment
EU50: Eurozone CPI, ECB rate decision
JP225: Japan tertiary index, trade
SG20: Singapore trade
NAS100: US retail sales, jobless claims, industrial production, Netflix earnings
TWN: Taiwan Semiconductor Manufacturing Company (TSMC) earnings

Friday, 18th October

CN50: China GDP, retail sales, industrial production, home prices
JP225: Japan CPI
UK100: UK retail sales

The spotlight shines on the world’s largest contract chipmaker with a market cap of almost $1 trillion.

US-listed shares of Taiwan Semiconductor Manufacturing Company (TSMC) are up almost 80% year-to-date, logging only one negative month in 2024.

Note: TSMC shares can be traded on the Taiwan Stock Exchange (TWSE) and New York Stock Exchange (NYSE).

Back in July, TSMC shares hit an all-time high at $192.65 after strong Q2 revenues – giving the company a trillion-dollar valuation momentarily before stocks later tumbled.

Still, prices have rebounded since August with a recent report revealing that TSMC’s September sales jumped 39.6% year-on-year.

bloomberg TSMC

This welcome development along with a positive earnings release could push the company’s stock higher.

When will earnings be published?

TSMC reports its third-quarter earnings on Thursday 17th October before US markets open.

Market expectations

The chipmaker is expected to post earnings of $1.78 per share with Q3 revenues seen rising to $23.28 billion from $17.28 in the prior year.

What to watch out for

Back in July, TSMC forecasted third quarter revenue in a range of between $22.4 billion to $23.2 billion.

But the chipmaker has already beaten these forecasts with consolidated sales in Q3 (July – September) hitting $23.6 billion, thanks to AI demand from major clients like Nvidia and Apple.

So much focus will be on the company’s earnings and forward guidance for Q4 which could serve as a key gauge for AI demand.

What does this mean for FXTM’s TWN index.

FXTM’s TWN index tracks the underlying FTSE Taiwan RIC Capped Index.

And TSMC makes up just under 20% of the index weighting, meaning that the upcoming earnings could result in heightened volatility.

The index is up almost 3% this month, bringing year-to-date gains to roughly 22%. Prices have been trending higher in recent weeks with the all-time high 7% away at 2046.8.

Key levels of interest can be found at 1930 and 1825.

Technical picture

TSMC shares are trending higher on the weekly charts with prices trading above the 21, 50 and 100-week SMA. However, the Relative Strength Index (RSI) is near 70 – signaling that prices may be overbought.

TSM

On the daily charts, the trend is bullish with prices are trading less than 4% away from its all-time high created in July at $192.65.

A decline below $183.00 may see prices test the 21-day SMA at $177.0 and $170.0.

Should $183.0 prove to be reliable support, this may open a path back to the all-time high at $192.65 and beyond.

TSMS1

Article by ForexTime

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

Opinions Stock Market News

10 Oct

Investors expect inflationary pressures to ease in the US. The People’s Bank of China launched a mechanism to support the stock market

By JustMarkets

At the end of Wednesday, the Dow Jones Index (US30) rose by 1.03%, while the S&P 500 Index (US500) gained 0.71%. The NASDAQ Technology Index (US100) closed yesterday positive 0.60%. Positive comments from Fed Vice Chairman Jefferson are helping stocks rise as he said the US economy is growing at a “robust pace”. Stocks also rose on speculation that today’s US consumer price report will ease price pressures. Economists expect annualized core inflation, which excludes food and fuel costs, to slow to 3.1% from 3.2%. Overall inflation is forecast at 2.3% y/y, down from 2.5% y/y in the previous month. The easing inflationary pressures and Friday’s strong employment report will convince the US Fed that inflation is on a steady path towards the 2% target. This will increase the likelihood that the US Fed will cut rates by 0.25% at each of its meetings in November and December. A sharper decline in inflationary pressures would be a negative scenario for the US dollar but positive for gold and risk assets (euro, pound, equities).

Minutes from the last FOMC meeting in September showed that Fed policymakers were divided over the size of the rate cut, with some participants favoring a quarter-point cut instead of the mandated 50 bps. Investors currently estimate the probability of a quarter-point rate cut in November at 78%.

Boeing’s (BA) stock price is down more than 3% and tops the list of losers in the S&P 500 (US500) and Dow Jones (US30). After talks to end a nearly month-long labor strike, it failed. Alphabet (GOOGL) shares fell more than 1% after the US Justice Department told a federal judge that it was considering recommending that Google be forced to sell some of its operations to settle an antitrust lawsuit.

Mexico’s core annual inflation rate fell to 3.91% in September, the lowest level since February 2021, down from 4% in August and slightly below forecasts. The annual inflation rate fell for the second consecutive month to 4.58%, the lowest level since March and below market expectations of 4.62%. Weakening price pressures may prompt the Bank of Mexico to consider further interest rate cuts after recent cuts, which would put pressure on the Mexican peso.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.99%, France’s CAC 40 (FR40) closed up 0.52%, Spain’s IBEX 35 (ES35) added 0.06%, and the UK’s FTSE 100 (UK100) closed positive 0.65%.

ECB Governing Council representative Villeroy de Galhau said yesterday that an ECB interest rate cut next week is very likely and will not be the last. Still, the subsequent pace will depend on developments in the fight against inflation. His colleague, ECB Governing Council spokesman Kazaks, also said interest rates should be cut further because of the weakening Eurozone economy. Swaps discount the odds of a 25 bps ECB rate cut at the October 17 meeting by 94% and a 25 bps rate cut at the December 12 meeting by 100%.

WTI crude oil prices fell to $73.2 a barrel on Wednesday after falling 4.6% the previous day amid weak demand and rising supply. EIA data showed a 5.810 million barrel increase in US crude inventories, which exceeded market expectations by 2 million barrels, while API data totaled nearly 11 million. In addition, the US EIA revised its 2025 demand forecast downward, citing slowing economic growth in China and North America, which put additional pressure on oil prices.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) rose by 0.67%, China’s FTSE China A50 (CHA50) fell by 5.79%, Hong Kong’s Hang Seng (HK50) lost 0.91%, and Australia’s ASX 200 (AU200) posted modest gains of 0.17% over yesterday.

Today, the People’s Bank of China (PBOC) launched a RMB500 billion swap facility, allowing eligible financial institutions to use assets as collateral to provide liquidity. The initiative, known as the Swap Fund for Securities, Funds and Insurance Companies (SFISF), is part of the central bank’s efforts to develop a new structural monetary policy tool to support the stock market. This facility allows securities, funds, and insurance companies to obtain liquid assets to purchase equities using their bonds, ETFs, and stocks included in the CSI 300 index as guarantees.

S&P 500 (US500) 5,792.04 +40.91 (+0.71%)

Dow Jones (US30) 42,512.00 +431.63 (+1.03%)

DAX (DE40) 19,254.93 +188.46 (+0.99%)

FTSE 100 (UK100) 8,243.74 +53.13 (+0.65%)

USD index 102.93 −0.39 (−0.38%)

News feed for: 2024.10.10

US FOMC Member Daly Speaks at 01:00 (GMT+3);
German Retail Sales (m/m) at 09:00 (GMT+3);
Eurozone ECB Monetary Meeting Accounts at 14:30 (GMT+3);
US Consumer Price Index (m/m) at 15:30 (GMT+3);
US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

Economics & Fundamentals Financial News

10 Oct

AUD/USD Stabilises Near Monthly Low Amid Mixed Signals

By RoboForex Analytical Department

The AUD/USD pair has halted its nearly continuous seven-day decline, stabilising around 0.6730 on Thursday. This level marks the monthly low for the Australian dollar, which has faced significant pressures lately due to a strengthening US dollar and uncertainties in China, Australia’s largest trading partner.

Market influences and economic indicators

The recent US jobs report and the Federal Reserve’s latest meeting minutes have led investors to reassess their expectations for future US rate cuts, affecting the currency pair. Additionally, no new stimulus measures have been announced in China, impacting sentiment, given that earlier stimulative actions are still not fully reflected in the economic performance.

In Australia, inflation expectations have decreased to a three-year low of 4% in October, providing a somewhat positive signal. However, the minutes from the Reserve Bank of Australia’s (RBA) latest meeting revealed discussions around both potential rate cuts and hikes, reflecting ongoing uncertainty about the economic outlook. The RBA concluded that the current interest rate appropriately balances the risks associated with inflation and labour market conditions.

AUD/USD technical analysis

The AUD/USD pair recently completed a downward wave to 0.6707 and is now forming a consolidation range above this level. If the pair breaks downwards, it could target a further decline to 0.6682. Conversely, an upward break might lead to a corrective move towards 0.6796. After this correction, the downward trend could continue towards 0.6655. The MACD indicator supports a bearish outlook, with its signal line positioned below zero and trending downwards.

On the hourly chart, the pair is consolidating around 0.6734. An upward breakout could lead to a rise towards 0.6815. Following this, a new downward phase could begin, potentially reaching 0.6710. If this level is breached, the decline could extend towards 0.6682. The Stochastic oscillator, with its signal line below 80 and poised to move downwards, aligns with this potential downward trajectory.

Conclusion

Investors and traders should closely monitor further developments from both the Federal Reserve and the RBA, as well as any new economic data from China, which could significantly influence the direction of the AUD/USD pair. The complex interplay of US monetary policy expectations, Chinese economic actions, and domestic Australian economic indicators will likely continue to drive volatility in the currency pair.

Disclaimer

Financial News Forex and Currency News

10 Oct

USDInd: Eyes 100-day SMA ahead of US CPI data

By ForexTime

USDInd ↑ 2% in October

Traders pricing in 85% prob of Fed cut in November

Over past year, US CPI triggered ↑ 0.8% & ↓ 0.6%

Technical levels – 100 & 200-day SMA

Dollar bulls continue to dominate the G10 space, crushing all obstacles.

A mixture of geopolitical risk and cooling Fed cut bets continue to support upside gains.

USD

And the dollar could see more volatility this afternoon thanks to the incoming US inflation data.

US inflation is expected to cool further in September, supporting expectations around lower US interest rates. However, last Friday’s strong jobs data has extinguished hopes around another jumbo-sized cut by the Fed.

In fact, traders are now pricing in an 85% probability of a 25-basis point cut by November with a 77% probability of another 25bp cut by December.

wirp

Beyond the CPI report, it will be wise to keep an eye on other US data and speeches by numerous Fed officials which could provide more clues on the Fed’s policy path.

Golden nugget: Over the past 12 months, the US CPI report has triggered upside moves of as much as 0.8% of declines of 0.6% in a 6-hour window post-release.

Taking a look at the charts, the USDInd is firmly bullish on the daily charts with prices hitting a fresh two month high. The index has gained roughly 2% since the start of October, taking its YTD gains to 1.6%.

After shedding almost 5% in Q3, dollars bulls could stage a return this quarter if bets around lower US interest rates continue to fall.

Since securing a solid close above 101.94, bulls have their eyes on the 100-day SMA at 103.30. However, the Relative Strength Index (RSI) is signalling that prices are near overbought territory.

A hotter-than-expected US CPI report that dampens Fed cut bets may push the dollar higher. Key levels of interest can be found at 103.30 and the 200-day SMA at 103.80.

A cooler than expected US CPI report may move prices back below 101.94.

Article by ForexTime

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

Financial News Forex and Currency News

09 Oct

How a subfield of physics led to breakthroughs in AI – and from there to this year’s Nobel Prize

By Veera Sundararaghavan, University of Michigan

John J. Hopfield and Geoffrey E. Hinton received the Nobel Prize in physics on Oct. 8, 2024, for their research on machine learning algorithms and neural networks that help computers learn. Their work has been fundamental in developing neural network theories that underpin generative artificial intelligence.

A neural network is a computational model consisting of layers of interconnected neurons. Like the neurons in your brain, these neurons process and send along a piece of information. Each neural layer receives a piece of data, processes it and passes the result to the next layer. By the end of the sequence, the network has processed and refined the data into something more useful.

While it might seem surprising that Hopfield and Hinton received the physics prize for their contributions to neural networks, used in computer science, their work is deeply rooted in the principles of physics, particularly a subfield called statistical mechanics.

As a computational materials scientist, I was excited to see this area of research recognized with the prize. Hopfield and Hinton’s work has allowed my colleagues and me to study a process called generative learning for materials sciences, a method that is behind many popular technologies like ChatGPT.

What is statistical mechanics?

Statistical mechanics is a branch of physics that uses statistical methods to explain the behavior of systems made up of a large number of particles.

Instead of focusing on individual particles, researchers using statistical mechanics look at the collective behavior of many particles. Seeing how they all act together helps researchers understand the system’s large-scale macroscopic properties like temperature, pressure and magnetization.

For example, physicist Ernst Ising developed a statistical mechanics model for magnetism in the 1920s. Ising imagined magnetism as the collective behavior of atomic spins interacting with their neighbors.

In Ising’s model, there are higher and lower energy states for the system, and the material is more likely to exist in the lowest energy state.

One key idea in statistical mechanics is the Boltzmann distribution, which quantifies how likely a given state is. This distribution describes the probability of a system being in a particular state – like solid, liquid or gas – based on its energy and temperature.

Ising exactly predicted the phase transition of a magnet using the Boltzmann distribution. He figured out the temperature at which the material changed from being magnetic to nonmagnetic.

Phase changes happen at predictable temperatures. Ice melts to water at a specific temperature because the Boltzmann distribution predicts that when it gets warm, the water molecules are more likely to take on a disordered – or liquid – state.

Statistical mechanics tells researchers about the properties of a larger system, and how individual objects in that system act collectively.

In materials, atoms arrange themselves into specific crystal structures that use the lowest amount of energy. When it’s cold, water molecules freeze into ice crystals with low energy states.

Similarly, in biology, proteins fold into low energy shapes, which allow them to function as specific antibodies – like a lock and key – targeting a virus.

Neural networks and statistical mechanics

Fundamentally, all neural networks work on a similar principle – to minimize energy. Neural networks use this principle to solve computing problems.

For example, imagine an image made up of pixels where you only can see a part of the picture. Some pixels are visible, while the rest are hidden. To determine what the image is, you consider all possible ways the hidden pixels could fit together with the visible pieces. From there, you would choose from among what statistical mechanics would say are the most likely states out of all the possible options.

A diagram showing statistical mechanics on the left, with a graph showing three atomic structures, with the one at the lowest energy labeled the most stable. On the right is labeled neural networks, showing two photos of trees, one only half visible. — In statistical mechanics, researchers try to find the most stable physical structure of a material. Neural networks use the same principle to solve complex computing problems.
Veera Sundararaghavan

Hopfield and Hinton developed a theory for neural networks based on the idea of statistical mechanics. Just like Ising before them, who modeled the collective interaction of atomic spins to solve the photo problem with a neural network, Hopfield and Hinton imagined collective interactions of pixels. They represented these pixels as neurons.

Just as in statistical physics, the energy of an image refers to how likely a particular configuration of pixels is. A Hopfield network would solve this problem by finding the lowest energy arrangements of hidden pixels.

However, unlike in statistical mechanics – where the energy is determined by known atomic interactions – neural networks learn these energies from data.

Hinton popularized the development of a technique called backpropagation. This technique helps the model figure out the interaction energies between these neurons, and this algorithm underpins much of modern AI learning.

The Boltzmann machine

Building upon Hopfield’s work, Hinton imagined another neural network, called the Boltzmann machine. It consists of visible neurons, which we can observe, and hidden neurons, which help the network learn complex patterns.

In a Boltzmann machine, you can determine the probability that the picture looks a certain way. To figure out this probability, you can sum up all the possible states the hidden pixels could be in. This gives you the total probability of the visible pixels being in a specific arrangement.

My group has worked on implementing Boltzmann machines in quantum computers for generative learning.

In generative learning, the network learns to generate new data samples that resemble the data the researchers fed the network to train it. For example, it might generate new images of handwritten numbers after being trained on similar images. The network can generate these by sampling from the learned probability distribution.

Generative learning underpins modern AI – it’s what allows the generation of AI art, videos and text.

Hopfield and Hinton have significantly influenced AI research by leveraging tools from statistical physics. Their work draws parallels between how nature determines the physical states of a material and how neural networks predict the likelihood of solutions to complex computer science problems.

About the Author:

Veera Sundararaghavan, Professor of Aerospace Engineering, University of Michigan

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

Opinions Programming

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Weekly Speculator Changes led by 10-Year Bonds & US Treasury Bonds

Bonds Net Speculators Leaderboard

Strength Scores led by Fed Funds & Ultra Treasury Bonds

Fed Funds top the 6-Week Strength Trends

30-Day Federal Funds Futures:

Price Trend-Following Model: Downtrend

Secured Overnight Financing Rate (3-Month) Futures:

Price Trend-Following Model: Weak Uptrend

Individual Bond Markets:

Secured Overnight Financing Rate (1-Month) Futures:

Price Trend-Following Model: Strong Uptrend

2-Year Treasury Note Futures:

Price Trend-Following Model: Uptrend

5-Year Treasury Note Futures:

Price Trend-Following Model: Uptrend

10-Year Treasury Note Futures:

Price Trend-Following Model: Weak Uptrend

Ultra 10-Year Notes Futures:

Price Trend-Following Model: Weak Uptrend

US Treasury Bonds Futures:

Price Trend-Following Model: Weak Uptrend

Ultra US Treasury Bonds Futures:

Price Trend-Following Model: Weak Uptrend

Weekly Speculator Changes led higher by Corn & Soybeans

Soft Commodities Net Speculators Leaderboard

Strength Scores led by Coffee & Soybean Oil

Soybean Oil & Lean Hogs top the 6-Week Strength Trends

Individual Soft Commodities Markets:

CORN Futures:

Price Trend-Following Model: Downtrend

SUGAR Futures:

Price Trend-Following Model: Strong Uptrend

COFFEE Futures:

Price Trend-Following Model: Uptrend

SOYBEANS Futures:

Price Trend-Following Model: Downtrend

SOYBEAN OIL Futures:

Price Trend-Following Model: Weak Downtrend

SOYBEAN MEAL Futures:

Price Trend-Following Model: Downtrend

LIVE CATTLE Futures:

Price Trend-Following Model: Weak Downtrend

LEAN HOGS Futures:

Price Trend-Following Model: Downtrend

COTTON Futures:

Price Trend-Following Model: Weak Downtrend

COCOA Futures:

Price Trend-Following Model: Strong Downtrend

WHEAT Futures:

Price Trend-Following Model: Weak Downtrend

Weekly Speculator Changes led by MSCI EAFE-Mini & VIX

Stock Market Net Speculators Leaderboard

Strength Scores led by VIX & Russell-Mini

VIX & Russell-Mini top the 6-Week Strength Trends

Individual Stock Market Charts:

VIX Volatility Futures:

Price Trend-Following Model: Strong Uptrend

S&P500 Mini Futures:

Price Trend-Following Model: Strong Uptrend

Dow Jones Mini Futures:

Price Trend-Following Model: Strong Uptrend

Nasdaq Mini Futures:

Price Trend-Following Model: Strong Uptrend

Russell 2000 Mini Futures:

Price Trend-Following Model: Uptrend

Nikkei Stock Average (USD) Futures:

Price Trend-Following Model: Strong Uptrend

MSCI EAFE Mini Futures:

Price Trend-Following Model: Strong Uptrend

News feed for: 2024.10.11

Another slew of key data releases and corporate earnings could rock markets in the week ahead:

When will earnings be published?

Market expectations

What to watch out for

What does this mean for FXTM’s TWN index.

Technical picture

News feed for: 2024.10.10

Dollar bulls continue to dominate the G10 space, crushing all obstacles.

Golden nugget: Over the past 12 months, the US CPI report has triggered upside moves of as much as 0.8% of declines of 0.6% in a 6-hour window post-release.

What is statistical mechanics?