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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 Aug. 8th.

This weekly extreme positions report highlights the most bullish and the most bearish positions for the speculator category. Extreme positioning in these markets can 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 see 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.

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 direction.

These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, speculator contracts can often 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 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.

Now, here are this week's most bullish speculator positions.

Cocoa Futures

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

The six-week trend for the strength score totaled 8.9 this week. The overall net speculator position was a total of 79,502 net contracts this week, with a change of 1,288 contract in the weekly speculator bets.

Mexican Peso

The Mexican peso speculator positioning came in next in the extreme standings this week. The Mexican peso speculator level is now at a 90.2% score of its three-year range.

The six-week trend for the strength score was -7.8 this week. The speculator position registered 83,651 net contracts this week, with a weekly change of -4,897 contracts in speculator bets.

British Pound

The British pound speculator positioning came in third this week in the extreme standings. The British pound speculator level resides at a 88.4% score of its three-year range.

The six-week trend for the speculator strength score came in at -3.5 this week. The overall speculator position was 47,020 net contracts this week, with a change of -2,542 contracts in the weekly speculator bets.

VIX

The VIX speculator positioning came in number four in the extreme standings this week. The VIX speculator level is at a 87.1% score of its three-year range.

The six-week trend for the speculator strength score totaled a change of 14.9 this week. The overall speculator position was -44,404 net contracts this week, with a change of -2,238 contracts in the speculator bets.

Dow Jones Mini

The Dow Jones Mini speculator positioning rounded out the top five in this week’s bullish extreme standings. The Dow Jones Mini speculator level sits at a 85.3% score of its three-year range.

The six-week trend for the speculator strength score was 65.0 this week. The speculator position was 4,031 net contracts this week, with a change of 2,451 contracts in the weekly speculator bets.

Now, here are this week's most bearish speculator positions.

Palladium

The palladium speculator positioning came in as the most bearish extreme standing this 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 -20.6 this week. The overall speculator position was -10,192 net contracts this week, with a change of -895 contracts in the speculator bets.

5-Year Bond

The 5-year bond speculator positioning came in next for the most bearish extreme standing on the week. The 5-year bond speculator level is at a 2.0% score of its three-year range.

The six-week trend for the speculator strength score was -17.1 this week. The speculator position was -1,230,307 net contracts this week, with a change of 26,739 contracts in the weekly speculator bets.

2-Year Bond

The 2-year bond speculator positioning came in as third most bearish extreme standing of the week. The 2-year bond speculator level resides at a 3.0% score of its three-year range.

The six-week trend for the speculator strength score was -7.7 this week. The overall speculator position was -1,109,126 net contracts this week, with a change of -13,463 contracts in the speculator bets.

Ultra U.S. Treasury Bonds

The Ultra U.S. Treasury bond speculator positioning came in as this week’s fourth most bearish extreme standing. The Ultra U.S. Treasury bond speculator level is at a 4.6% score of its three-year range.

The six-week trend for the speculator strength score was -8.6 this week. The speculator position was -445,088 net contracts this week, with a change of 11,341 contracts in the weekly speculator bets.

Ultra 10-Year U.S. T-Note

Finally, the Ultra 10-year U.S. T-note speculator positioning came in as the fifth most bearish extreme standing for this week. The Ultra 10-year U.S. T-note speculator level is at a 13.9% score of its three-year range.

The six-week trend for the speculator strength score was -3.8 this week. The speculator position was -149,951 net contracts this week, with a change of 35,286 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 it 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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