This Week's CoT: Futures And What Hedge Funds Are Buying

In the 12 months to February, foreigners purchased $376.8 billion in US equities – a record. This is quite a reversal from April 2019 when they sold $214.6 billion worth – also a record.

Housing starts (April) are due out on Tuesday. Starts surged 19.4 percent m/m in March to a seasonally adjusted annual rate of 1.74 million units – the highest since June 2006.

Friday brings existing home sales (April). In March, sales dropped 3.7 percent m/m to 6.01 million units (SAAR). Last October, sales hit 6.73 million, having earlier dropped to 4.01 million in May.

WTI crude oil: Currently net long 537.8k, down 13.4k.

Once again, oil bulls were denied at $66-$67. On Wednesday, WTI ($65.37/barrel) ticked $66.63 before retreating; a week before that, sellers showed up after the crude touched $66.76.

The daily remains overbought. The 50-day at $63 has gained significance. The average also approximates a rising trend line from March. A loss of this support can hasten a move toward $58. Alternatively, a decisive $66-$67 breakout opens the door toward mid-$70s.

In the week to May 7, US crude production increased 100,000 barrels per day to 11 million b/d. As did crude imports, which were up 37,000 b/d to 5.5 mb/d. Gasoline stocks rose as well – up 378,000 barrels to 236.2 million barrels. Refinery utilization dropped four-tenths of a percentage point to 86.1 percent. Stocks of crude and distillates, however, fell – down 1.8 million barrels and 1.7 million barrels respectively to 236.2 million barrels and 134.4 million barrels.

E-mini S&P 500: Currently net short 36.8k, up 3k.

Since reclaiming the 50-day (4064) in late April last year, the S&P 500 (4173.85) has tested the average eight times and is yet to breach it on a sustained basis. On Wednesday, the day the large cap index tumbled 2.1 percent, the average was just about tested – successfully.

At the lows, the index was down 4.2 percent, breaching a rising trend line from the low of March last year, but bulls regrouped to rally to only lose 1.4 percent for the week. The trend line was saved.

On the daily, there is room to rally more.

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