Speculators Increase USD Long Positions - COT Data 26 June 2012 Report Reveals


Active Trader
Apr 19, 2012
Cork, Ireland
The latest COT Report shows that large and small specs that combined positions in the latest period had an increase in the USD long position from 284.4K in the previous week to 312.5K. The biggest open position remains in the euro where the specs are now short 198.5K euro contracts (long the USD).

There were other increases in short positions in the yen, by 19.3K, and in the SF by about 14K. With the SNB peg of the franc to the euro, the SF has become a proxy for selling the euro.

It is interesting to note that the large and small specs have differing net positions in the Yen, the pound, where the large spec has just flipped to the long side, and the C$ where the large spec is long and the small spec is short. Usually the large trader is the first to change positions and the small trader follows.

The Australian Dollar has been the arena where specs have swarmed to the short side, only to be chased out. It is our guess that Friday's market action (after the end of the reporting period for this report) caused the liquidation of the last of the spec short position in the A$, but the report from the CME is running late today so we are only guessing until the number show up next Friday.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
  • US Dollar Index: Large specs, who dominate this market, reduced their net long position by 8.6K contracts, but still remain a 4.6 ratio long. Small specs increased their net long and are now a 6.3 to 1 long. Total DI net speculative long decreased to 47.9K from 55.3K in the previous period.
  • Euro (EUR/USD): The total OI in the euro was up a little over 10K contracts to 371.6K contracts. Large spec increased their net long by about 21K contracts mostly by decreasing long positions. They remain better than a 5 to 1 short the euro. Small specs are a 2 to 1 short. Spreading is a large 9.8% of the OI total.
  • British Pound Sterling (GBP/USD): There has been a major shift in the pound positions as the large specs have flipped from a short to a very small spec long in the pound. We will see if he builds on this position. The small specs remain short the pound, but by less than a 2 ratio, so we have the large spec going a different direction from the small spec.
  • Japanese Yen (JPY/USD): Speculators increased their net spec short position in the yen by over 19K contracts, but the large spec remains long by about 5.5K contracts. Small specs are short the yen and decreased their net position, reducing longs and adding to shorts, by a total of 9K contracts. Here again we have a disagreement of markets views between the large spec who is long the yen, and the small spec who is short.
  • Swiss Franc (CHF/USD): The large specs aggressively reduced their long positions by 19.4K contracts which leaves them net short almost 24K contracts, a 6 ratio short. Small short remain in the vicinity of a 3 ratio short.
  • Canadian Dollar (CAD/USD): With the small spec flipping to the short side of the loonie, the small specs have gone a separate direction from the large specs who are long the C$. The OI in the C$ is small indicating indecision in this market.
  • New Zealand Dollar (NZD/USD): Both size specs flipped to the long side of the NZ$ though their positions are small. Without trading a lot of contracts the position could easily be reversed.
  • Australian Dollar (AUD/USD): On the report four weeks ago, the combined spec short positions were 64,870 contracts. That net short position has been reduced to only 5656 contracts. During the period the price moved from about .98 to 1.02. We would guess a large part of the rally was short covering, and the strong market on Friday June 29th probably cleaned out the rest of the shorts. With this market now in about neutral, we will be looking for a trade in the Aussie.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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