Commitment Of Traders: Peek Into Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of January 14, 2020.

10-year note: Currently net short 223.6k, up 44.3k.

 

Bond bulls and bears continue to fight over control of trend-line support from early September when the 10-year Treasury yield (1.84 percent) bottomed at 1.43 percent, which essentially matched the July 2012 trough of 1.39 percent and the low four years after that of 1.34 percent.  That trend line extends to 1.70s.  Both Wednesday and Thursday, rates touched 1.78 percent intraday before rising.

Even if bears (on price) succeed in pushing the 10-year rate higher, which is likely near term, the 50-day moving average lies right at 1.84 percent.  A little above that, around 1.88 percent, lies trend-line resistance from Christmas Eve.  Then comes 1.95-1.97 percent which provided resistance in both November and December.  The 200-day rests at 1.96 percent.

In other words, there is plenty of overhead resistance for a sustained rally to occur – not music to the ears of non-commercials who hold tons of net shorts in 10-year note futures.

30-year bond: Currently net short 57.2k, down 41.5k.

Markets are closed Monday for observance of Martin Luther King Jr. holiday.

Existing home sales (December) are due out Wednesday.  November sales were down 1.7 percent month-over-month to a seasonally adjusted annual rate of 5.35 million units.  The cycle high 5.72 million was recorded in November 2017.  During the housing bubble, sales peaked at 7.26 million in September 2005.  Despite this, the price of an existing home jumped to a new all-time high of $285,300 last June, with November at $271,300.  Inventory stood at 1.64 million in November – a nine-month low.

WTI crude oil: Currently net long 719.2k, down 45.3k.

 

Last Wednesday, the cash ($58.58/barrel) staged a massive reversal after tagging $65.65 intraday.  The downward momentum continued this week, although the drop was contained, down 0.8 percent for the week.  The 50-day ($58.94) was lost Monday.  The 200-day ($57.80) also lies in the vicinity, which bulls defended all week.  Right around here also lies trend-line support from the lows of early October last year.  A breach exposes the crude to a test of $55.

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