The COT Report: Gold And Crude Oil At Important Levels

The following is a recap of the September 16 COT Report (Commitment Of Traders) released by the CFTC (Commodity Futures Trading Commission) looking at COT data and futures positions of non-commercial holdings as of September 13. 

Note that the change in COT report data is week-over-week. Excerpts of this blog post originally appeared on Paban’s blog.

GOLD

Notwithstanding if the Fed moves next week, or in December or if ever, or if the dollar rallies or weakens, one thing that is certain to impact gold’s price is flows, or a lack thereof, into gold ETFs.  These have proven to be popular vehicles for those seeking exposure to the metal.

Sign up for our FREE newsletter
and receive our best trading ideas and research



In the week ended Wednesday, the SPDR gold ETF (NYSEARCA:GLD), lost $702 million (courtesy of ETF.com).

Spot gold prices bottomed at $1045.4/ounce on December 3rd last year.  Since then, GLD has attracted $7.7 billion.  Since the metal peaked on July 6th at $1,377.5, it has essentially gone sideways to slightly down.

Gold is once again testing support at $1,300, which has been tested several times in the past three months.

September 16 COT Report:  Currently net long 285.4k, down 22.4k.

september-16-cot-report-gold-futures-long-positions-chart

CRUDE OIL

The International Energy Agency cut its global oil demand forecast by about 100,000 barrels per day for this year, to 1.3 million b/d.  Next year, it sees oil demand rising 1.2 mb/d, down 200,000 b/d from prior forecast.  Wobbling demand in China and India was primarily blamed.

For the most part, the weekly EIA data added salt to injury.

In the week ended September 9th, crude stocks fell by 559,000 barrels to 510.8 million barrels – the lowest since February 26th this year.

Gasoline stocks, however, jumped 567,000 barrels to 228.4 million barrels, and distillate inventory increased 4.6 million barrels to 162.8 million barrels.  The latter was the highest since April 8th this year.

Crude oil imports rose by 993,000 barrels per day to 8.1 million b/d, reversing half of the 1.8-mb/d decline in the previous week, which was probably influenced by hurricane Hermine.

Crude oil production rose by 35,000 b/d to 8.5 mb/d – a three-week high.  Production peaked at 9.61 mb/d in the June 5th week last year.

Refinery utilization dropped eight-tenths of a point to 92.9 percent.

Once again, spot West Texas Intermediate crude oil is testing support at $43-$43.50, which was defended early this month.  It has lost the 50-day moving average, which is now dropping.

Since the crude peaked on June 9th at $51.67/barrel, it has been making lower highs.  The August 3rd low of $39.19 has taken on a new significance.

September 16 COT Report:  Currently net long 317.5k, up 19.2k.

september-16-cot-report-crude-oil-futures-net-long-positions-chart

E-MINI S&P 500

Last week, selling accelerated when the S&P 500 Index (INDEXSP:.INX) lost 2160.  This week, buyers showed up near 2120 in all of the first four sessions.

The S&P 500 peaked at 2134.72 in May last year, and had essentially been going sideways since February that year, when it first hit 2119.59.  Hence the significance of 2120.  Should the bulls not be able to defend this support, selling is bound to accelerate again.

So far, so good.  The index tacked on 0.5 percent this week, but closed off the highs.

Resistance is heavy in the 2160-2178 range, including the 50-day moving average (2168).  Weekly indicators remain overbought, but the index is oversold on a daily basis.

It all boils down to flows.

The week ended Wednesday saw the SPDR S&P 500 ETF (NYSEARCA:SPY), losing $3.4 billion (courtesy of ETF.com), but it is possible this changed Thursday … and needs to if daily oversold conditions were to unwind.

In the same week, U.S.-based equity funds lost a massive $14.4 billion (courtesy of Lipper).  Since the February 10th week this year, $90 billion has been redeemed.  The S&P 500 bottomed early February, then rallying 21 percent.

September 16 COT Report:  Currently net long 93.5k, down 90.1k.

september 16 cot report s&p 500 futures net long positions chart

NASDAQ 100 INDEX (mini)

Apple (AAPL) constitutes 10.5 percent of the Nasdaq 100.  It rallied 11.4 percent for the week, almost single-handedly carrying the index, which was up 2.9 percent.  Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) and Facebook (FB) all rallied, but less than the index did.

Last week’s bearish engulfing candle was all but negated.  The index is once again knocking on 4840, which in the past month repelled rally attempts three times … should be an important breakout near-term should it happen.  Medium-term, the index is vulnerable.

In the week ended Wednesday, QQQ, the PowerShares Nasdaq 100 ETF, continued to suffer outflows, losing $1.7 billion, following outflows of $1.4 billion in the prior two (courtesy of ETF.com).

September 16 COT Report:  Currently net long 96.2k, down 47.6k.

september-16-cot-report-nasdaq-100-futures-net-long-positions-chart

VIX Volatility Index

Spot VIX spiked to 20.51 on Monday before reversing hard to close in the red.  That likely is a spike reversal.  The spot, overbought on a daily basis, has room to head lower near-term.

Also using Monday’s intra-day highs, the VIX-to-VXV ratio spiked to 1.07.  Prior to this, the ratio languished in oversold territory for nearly 10 weeks.

That said, medium-term, volatility is probably not done rallying.  There is just too much betting on continued volatility compression.

End-August short interest in VXX, the iPath S&P 500 VIX short-term futures ETN, dropped 4.8 percent period-over-period, but the mid-August reading of 32.6 million was the highest ever.

Non-commercials reduced net shorts 16 percent week-over-week but the prior week was the highest ever.

September 16 COT Report:  Currently net short 112.9k, down 20.9k.

september-16-cot-report-vix-volatility-futures-net-short-positions-chart

Thanks for reading.

 

Twitter: @hedgopia

Author may hold a position in mentioned securities at the time of publication.  Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.