Sunday, 9 September 2012

COT data of Sept 4th, 2012 - British Pound [BP]

British Pounds - Values moved slightly higher from the previous report date (and have moved higher again since then). Total o/i stood at 133755 (from 117034), while spreads were very low (79, from 633).

Nett differences moved noticeably again, with Commercials remaining negative, but less so (-1525, from -6109), and Large Specs also becoming negative (- 6868, from +1968). Small Specs continued to add to longs (nett +8393, from +4141). 
Proportionally, Commercials started adding to their share of the total long position, with 43.1% (from the previous very low 39.6%), while their shorts were slightly lower, at 44.2% (from 44.9%). Their share of the total o/i increased slightly, to 43.6% (from 42.7%), still a rather low figure. Normally, their share stands in the 55-65% range.

Large Specs reduced their share of total longs, with 31.3% (from 36.4%). Their shorts were higher, at 36.4% (from 34.7%), with total commitments dropping to 33.9% (from 35.6%). Their balance thus moves to minus 5.1, from plus 1.7 - back to their normal stance. However, Small Specs added to longs yet again, now holding 25.6%, with shorts down to 19.3%. Their balance goes to a rather high plus 6.3, although their share of the total dropped a little, from 22.7% to 22.5%. Their balance remains well below the highest that we have seen, but with both the Commercials and the Large Specs on the other side, the danger of liquidation by weak holders remains high - a fall in values could initiate considerable selling pressure.

There are still no strong signals, but on balance the start of any decline will make us more convincedly bearish.

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