CoT: Peek Into The Future Through Futures, How Hedge Funds Are Positioned

Following futures positions of non-commercials are as of March 26, 2019.

10-year noteCurrently net short 166.3k, up 2.3k.

Mid-December last year, the 10-year Treasury rate lost a trend line from July 2016 when it bottomed at 1.34 percent.  This was soon followed by a two-month sideways move during which bond bears consistently showed up in defense of 2.62 percent – a crucial level going back a decade.  In the middle of this month, this support was gone, which probably took out lots of stops.  The 10-year (2.41 percent) quickly fell to Thursday’s intraday low of 2.36 percent.  Yields could eventually head toward two percent, but bears (price) have an opportunity to stabilize matters here.  Thursday also flashed a spinning top.  Support around that session’s low goes back eight-plus years.  The daily is way oversold.

30-year bondCurrently net short 18k, down 12.3k.

Major economic releases next week are as follows.

Retail sales (February) and ISM manufacturing index (March) are scheduled for Monday.

In January, retail sales increased 2.3 percent year-over-year to a seasonally adjusted annual rate of $504.4 billion.  Growth has softened since last July’s 6.6-percent jump.  The all-time high of $511.6 billion was reached last October.

Manufacturing activity in February fell 2.4 points month-over-month to 54.2, which was the lowest since November 2016.  Last August’s 60.8 was the highest since 61.4 in May 2004.

Tuesday, durable goods orders for February are on tap.  January orders for non-defense capital goods ex-aircraft – proxy for business capex plans – rose 4.2 percent y/y to $68.9 billion.  As recently as last July, orders rose at an 8.8-percent annual pace.

Wednesday brings March’s ISM non-manufacturing index.  Services activity in February rose three points m/m to 59.7.

Jobs data for March are due out Friday.  February only produced much-weaker-than-expected 20,000 non-farm jobs.  That said, January’s 311,000 was way better than expected.

Crude oilCurrently net long 555.2k, up 25.3k.

Bulls continued to defend the mini-breakout at $58 from two weeks ago.  They at the same time were not able to bust out of $60, toward testing the 200-day moving average ($61.76).  During the October-December rout last year, the cash ($60.14/barrel) lost a trend line from February 2016 when the crude bottomed at $26.05.  The underside of that trend line gets tested around $62.

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