1. Commitments of Traders: What are the Big Boys Up To?
By Jim Wyckoff
I have discussed in past articles how volume and open interest can be used to help identify and confirm market situations and trading opportunities. I'll take open interest one step farther in this column by examining the Commitments of Traders (C.O.T.) report, issued by the Commodity Futures Trading Commission (CFTC).
The C.O.T. report is released bi-weekly--every other Friday afternoon. There is also a C.O.T. report issued on the following Mondays that includes futures and options data. However, this report is not as closely followed as the Friday afternoon report that covers only futures, because the combined futures and options report has less history.
The CFTC requires futures traders and hedgers who hold market positions larger than the CFTC's required reporting levels to report their positions on a daily basis. This is how the C.O.T. report is derived.
The C.O.T. report breaks down by open interest large trader positions into "Commercial" and "Non-Commercial" categories. Commercial traders are required to register with the CFTC by showing a related cash business for which futures are used as a hedge. The Non-Commercial category is comprised of large speculators--namely the commodity funds. The balance of open interest is qualified under the "Non-reportable" classification that includes both small commercial hedgers and small speculators.
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2. Hot Market Report: Raw Commodity Sector Still Stuck in a Major Rut
The daily bar chart for the Goldman Sachs Commodity Index (GSCI) shows the near-term technical posture for the gauge of the raw commodity sector remains bearish. It's my bias that this major bust cycle in raw commodities is closer to ending--probably sometime in the first half of 2016. However, if the GSCI drops to a new multi-year low, identified by the support line seen on the daily chart, then it would be likely the raw commodity sector slump would grind on for at least many more months.
7:30 AM CDT - Durable Goods-Ex Transportation(Sep)
7:30 AM CDT - Durable Orders(Sep)
8:00 AM CDT - Case-Shiller 20-City Index(Aug)
9:00 AM CDT - Consumer Confidence(Oct)
LT: Nov Copper Options(CMX)
Nov Gold Options(CMX)
Nov Silver Options(CMX)
Nov Natural Gas Options(NYM)
Nov RBOB & ULSD Options(NYM)
6:00 AM CDT - MBA Mortgage Purchase Index
9:30 AM CDT - API & DOE Energy Stats
1:00 PM CDT - FOMC Rate Decision(Oct)
2:00 PM CDT - Dairy Products Sales
LT: Oct Copper(CMX)
Nov Natural Gas(NYM)
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - GDP-Adv(Q3)
7:30 AM CDT - Chain Deflator-Adv(Q3)
9:00 AM CDT - Pending Home Sales(Sep)
9:30 AM CDT - EIA Gas Storage
3:30 PM CDT - Money Supply
FN: Nov Natural Gas(NYM)
LT: Oct Feeder Cattle(CME)
Oct Feeder Cattle Options(CME)
7:30 AM CDT - Employment Cost Index(Q3)
7:30 AM CDT - PCE Prices-Core(Sep)
7:30 AM CDT - Personal Income & Spending(Sep)
8:45 AM CDT - Chicago PMI(Oct)
8:55 AM CDT - Michigan Sentiment-Final(Oct)
FN: Nov Gold(CMX)
Nov Rough Rice(CBT)
LT: Oct Fed Funds(CME)
Oct Live Cattle(CME)
Nov RBOB & ULSD(NYM)
Oct Fed Funds Options(CME)
Nov Lumber Options(CME)
9:00 AM CST - Construction Spending(Sep)
9:00 AM CST - ISM Index(Oct)
LT: Nov Orange Juice(ICE)
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!