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The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on Sept. 5.

This weekly extreme positioning report highlights the most bullish and the most bearish positions for the speculator category. Extreme positioning in these markets can often foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous three years. We define over 80% as extremely bullish and under 20% as extremely bearish.

You can compare Strength Index scores across all markets in the data table or the cot leaders table. Now, here are this week's most bullish speculator positions.

Speculators or Non-Commercials Notes

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds, and other significant for-profit participants. The speculators are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions.

These traders often look to buy when prices are rising, and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as when the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction.

This process usually plays out over many months to years, and it can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

Bitcoin

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The Bitcoin speculator positioning came in as the most bullish extreme standing this week. The Bitcoin speculator level is currently at a 100.0% score of its three-year range.

The six-week trend for the percentage strength score totaled 41.6 this week. The overall net speculator position was a total of 2,039 net contracts this week, with a change of 532 contract in the weekly speculator bets.

Cocoa Futures

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The cocoa futures speculator positioning came next in the extreme standings this week. The cocoa futures speculator level is now at a 100.0% score of its three-year range.

The six-week trend for the percentage strength score was 8.7 this week. The speculator position registered 86,220 net contracts this week, with a weekly change of 2,999 contracts in speculator bets.

Three-Month Secured Overnight Financing Rate

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The three-month secured overnight financing rate speculator positioning came in third this week in the extreme standings. The three-month secured overnight financing rate speculator level resides at a 96.4% score of its three-year range.

The six-week trend for the speculator strength score came in at 18.2 this week. The overall speculator position was 272,072 net contracts this week, with a change of -53,150 contracts in the weekly speculator bets.

Heating Oil

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The heating oil speculator positioning came up as number four in the extreme standings this week. The heating oil speculator level is at a 95.6% score of its three-year range.

The six-week trend for the speculator strength score totaled a change of 25.9 this week. The overall speculator position was 38,737 net contracts this week, with a change of -715 contracts in the speculator bets.

British Pound

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The British pound speculator positioning rounded out the top five in this week’s bullish extreme standings. The British pound speculator level sits at a 88.0% score of its three-year range. The six-week trend for the speculator strength score was -8.8 this week. The speculator position was 46,384 net contracts this week, with a change of -2,017 contracts in the weekly speculator bets.

Now, let's move on to the the week's most bearish speculator positions.

MSCI EAFE MINI

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The MSCI EAFE MINI speculator positioning came in as the most bearish extreme standing this week. The MSCI EAFE MINI speculator level is at a 0.0% score of its three-year range.

The six-week trend for the speculator strength score was -8.5 this week. The overall speculator position was -38,079 net contracts this week, with a change of -11,282 contracts in the speculator bets.

Palladium

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The palladium speculator positioning came in next for the most bearish extreme standing on the week. The palladium speculator level is at a 0.0% score of its three-year range.

The six-week trend for the speculator strength score was -17.9 this week. The speculator position was -11,021 net contracts this week, with a change of -1,045 contracts in the weekly speculator bets.

Corn

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The corn speculator positioning came in as the third most bearish extreme standing of the week. The corn speculator level resides at a 2.7% score of its three-year range.

The six-week trend for the speculator strength score was -19.0 this week. The overall speculator position was -45,632 net contracts this week, with a change of -9,819 contracts in the speculator bets.

2-Year Bond

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The 2-year bond speculator positioning came in as this week’s fourth most bearish extreme standing. The 2-year bond speculator level is at a 3.9% score of its three-year range.

The six-week trend for the speculator strength score was -5.3 this week. The speculator position was -1,217,890 net contracts this week, with a change of -48,034 contracts in the weekly speculator bets.

10-Year Note

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Finally, the 10-year note speculator positioning came in as the fifth most bearish extreme standing for this week. The 10-year note speculator level is at a 5.7% score of its three-year range.

The six-week trend for the speculator strength score was -16.3 this week. The speculator position was -791,535 net contracts this week, with a change of 14,018 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Newsletter

COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is three days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits), and non-reportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

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