Exposing How Traders Are Currently Positioned In Bonds, Commodities, Currencies, And Stocks

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Includes: BAL, CORN, EWJ, FXA, FXB, GLD, IEF, IEI, JJC, SLV, SPY, UNG, USO, UUP, VXX, WEAT
by: Free CoT Data

Summary

Bonds: Sell-side dealers have quickly gotten long both short-term and mid-term Treasuries.

Commodities: Producers and users are extremely long natural gas and cotton. Money managers have kept covering their crude short.

Currencies: Money managers have cut some of their long exposure to the U.S. Dollar Index. They've also gotten bullish on the Australian dollar.

Stocks: Money managers are still extremely short U.S. stocks after the bounce.

In a previous article, I outlined my approach for analyzing CoT data to reveal how different types of traders are positioned in the futures markets. If you missed it, give the article a read to see the method behind my analysis.

This is the third in a series of weekly updates that will outline how traders are positioned, and how that positioning has recently changed. I break down the updates by asset class, so let's get started.

Bonds

No real extreme positioning. Sell-side dealers have quickly gotten long both short-term (NYSEARCA:IEI) and mid-term (NYSEARCA:IEF) Treasuries.

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Commodities

Producers and users are extremely long natural gas (NYSEARCA:UNG).

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Producers and users are also extremely long cotton (NYSEARCA:BAL) as prices approach a six-year low.

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Money managers have quickly gotten long both gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV). This is expected - money managers typically behave like trend followers and add to longs as price rises. Silver is actually now a very crowded long among money managers.

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Producers & users are very long agricultural commodities, specifically corn (NYSEARCA:CORN) and wheat (NYSEARCA:WEAT).

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Money managers have continued to cover their huge short position in WTI crude (NYSEARCA:USO). They are now as long as they were at the top of the bounce last May. It is notable that producers and users remain extremely short.

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Money managers have also aggressively gotten long copper futures (NYSEARCA:JJC).

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Currencies

No true extreme positioning. Money managers have cut their long exposure to the U.S. Dollar Index (NYSEARCA:UUP).

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Money managers have piled into the Australian Dollar (NYSEARCA:FXA).

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Money managers are still very short the British pound (NYSEARCA:FXB).

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Stocks

Positioning within stock futures (NYSEARCA:SPY) still defies expectations. Last fall, money managers got extremely short all U.S. equity futures like they were in February of this year. The difference is that during last October's 10%+ rally, money managers covered some of their short. This time around, they have stayed persistently short.

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Money managers have actually been getting more short the Nikkei (NYSEARCA:EWJ) as it's bounced.

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Finally, money managers are very long VIX futures (NYSEARCA:VXX). This goes hand in hand with their equity short. Historically, money managers getting crowded in a long vol trade has marked short-term tops in the VIX. The -45% five-week drop in spot VIX has been the biggest ever, so it's surprising to see money managers only cut their bullish positioning by a bit.

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Conclusion

  • Money managers have gotten much more bullish on crude oil, gold, silver, and copper.
  • Commodity producers and users are extremely long natural gas and cotton.
  • Money managers have stayed short U.S. stocks, covering very little during the recent bounce.

If you've got any questions about CoT data, don't hesitate to leave me a comment below.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.