by Macro Story
The COT report for the week ending September 20, 2011 shows copper still
setting up for further weakness while oil looks flat and the 30 year yield
possibly due for a move higher. Most interesting are the moves in the USD.
Copper: Finally after sounding like a broken record copper
has broken to the downside. Commercial net has been signaling this move for a
while and in fact had to readjust over the summer as copper remained stubbornly
high in price. Interesting to note even with the current weakness in copper
commercial net has in fact gone net long (buying copper into lower prices)
signaling even further selling to come.
Oil (WTI): Oil looks poised to remain slightly pressured to
range bound. No major change to report from this week’s report.
Long Bond: Based on a slight reduction in net short
positions for commercial accounts it appears the 30 year yield may in fact move
slightly higher over the coming week.
US Dollar: Very interesting changes
in position for both non reporting (retail) and commercial accounts. The USD did
break out of a multi-month trading range this week and has broken through
multi-year resistance. Below are two charts, the first shows how commercial net
moves relatively to the USD (i.e. they short or sell into strength). The second
chart shows how commercial and non reporting move inverse to one another.
USD VS Commercial Net
- notice the massive divergence signaling a major move higher in the
USD is highly probable or at least anticipated by commercial net.
USD Commercial VS Non
Reporting – Notice the extreme changes to positions for both. The non
reporting scale on the chart below is inverted to show the correlation. Although
easy to dismiss this as a USD selloff is pending as retail is massively net long
it is important to note that commercial net is supporting a move higher in the
USD.
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