The crude business of crude oil

Market Pulse: Feb 13, 2012

COT Data

Take a good look at the weekly chart below. First, the top COT report is the older legacy report showing Commercials net short -201,157 contracts. This is the difference between their long positions, which were 620,629 contracts, and their short positions, which were -821,786 short. Large Spec showed a net long position of 168,885 contracts. This is the difference between 315,171 contracts long and -146,286 contracts net short.

But to get the true picture of “big money” look at the Disaggregated report. You now see Swap Dealers have a net short position of -122,252 contracts. This is the difference of 165,410 long contracts and -287,662 short contracts. Producers (true commercials) come in at -78,905 contracts net short, which is the difference between 245,608 contracts long and -345,513 contracts short. When comparing with the legacy report you will see these two net figures add up the -201,157 contracts net short. If you try to calculate the longs and shorts to compare with the legacy, you will see a difference of 209,611 contract on the long and short side. That is how many spreads the Swap Dealers are currently holding and they need to be added to the longs and shorts of the legacy report. Producers (true commercials) do not hold spreads. Managed Money is the only group net long at 173,469 contracts. This is from the difference between 211,129 long contracts and -37,660 short contracts. MORE importantly look how the Swap Dealer for the first time ever started into net short territory the fourth quarter of 2010. And now we see Swap Dealers sitting on a larger net short position than Producers, another first. If you trade energy options, futures or ETFs and you are not looking at this information, you will not see the bottom line of what moves crude oil — “big money.” It is as easy as just opening your eyes and looking at the right information.

Also watch the dollar. Remember crude would not have been trading at $147 a barrel in 2008 with the US Dollar Index at 80.

Commodity

12-mo low

12-mo hi

10-Feb

3-Feb

Cattle (feed)

-1,889

5,543

-1,889

-1,545

Cattle (live)

-40,877

10,437

-27,358

-20,581

Hogs

-46,574

21,270

-17,884

-10,784

Corn

-413,915

-36,487

-110,142

-100,112

Oats

-7,738

290

-997

290

Soybeans

-193,048

28,178

-42,160

-18,996

Soybean meal

-76,105

32,081

-6,240

4,796

Soybean oil

-91,423

29,745

1,199

20,335

Wheat

-21,061

87,922

60,927

-11,802

Orange juice

-22,341

-9,769

-15,222

-15,395

Coffee

-41,624

1,153

-9,569

-7,132

Cocoa

-41,808

10,252

9,006

3,116

Sugar

-208,312

-25,626

-64,569

-72,748

Cotton

-43,495

-2,152

-23,509

-25,093

British pound

-66,435

88,682

41,719

40,280

Canada dollar

-115,190

25,942

-18,274

6,645

Euro FX

-124,855

197,616

165,164

183,925

Japanese yen

-64,864

76,983

-50,221

-53,061

Swiss franc

-42,387

26,491

15,653

14,935

US dollar index

-53,158

14,003

-37,570

-44,432

Mexican Peso

-140,414

39,901

-35,867

-22,088

Australian dollar

-110,025

479

-89,774

-88,177

S&P 500

-77,473

73,398

-27,983

-28,683

T-note -10 yr

-49,750

229,611

109,577

83,967

T-bond -30 yr

-20,389

88,803

18,104

16,517

Eurodollar

-408,407

1,126,194

-87,592

-104,346

Crude oil

-319,669

-114,385

-201,157

-201,460

Heating oil

-53,631

-4,204

-53,631

-44,042

RBOB Gasoline

-101,596

-38,417

-101,596

-96,348

Natural gas

101,596

228,910

101,596

104,416

Copper

-35,687

14,419

-4,578

-1,225

Gold

-287,634

-159,153

-221,072

-209,862

Platinum

-35,249

-18,670

-29,948

-29,472

Silver

-57,793

-14,132

-34,650

-28,729

Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book “What Lies Beneath ALL Trends”. It is filled with eye opening information.

Proceed to Page 3 for this week's detailed fundementals charts...

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