Dec

5

I looked at my little COT summarization service and the conclusion is one has a pretty one-sided speculative long trade in commodities.  Funds are buying, commercials are selling.

Here are the markets that, in the past 18 months, large specs have never been as net-long, and commercials never as net-short as of this past Tuesday …

  1. Cocoa
  2. Gold
  3. NASDAQ
  4. Platinum
  5. Lumber
  6. Rice
  7. Soybean Oil
  8. Mexican Peso
  9. Hogs
  10. VIX
  11. Swiss Franc

And the ones that are only slightly off the extreme polarization — within the 10% percentile…

  1. Yen
  2. Cotton
  3. Copper
  4. Orange Juice
  5. 2 Yr Treasuries
  6. Australian Dollar
  7. Kansas Wheat

Expand to the 15% percentile and you pick up…

  1. Crude Oil
  2. 10-Year Treasuries Canadian Dollar
  3. Silver

Within the 10% percentile going the other way — commercials substantially net-long and specs substantially net-short are just…

  1. Natural gas
  2. Interest rate swaps
  3. 30-day Fed Funds

A couple of interesting things:

2 year and 10 year T-notes are very popular with specs, while the 5 year notes are substantially the other way — big divergence. (What — 5's an unlucky number?)

Both commercials and large specs are substantially long against small specs who have a very large net-short position in S&P e-minis.

George Parkanyi, Canadian telecom entrepreneur and ETF trader, blogs at StockAdventures.


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