COT basis May 17th, 2011

Currencies demonstrate how long one might have to wait for Commercials' views to come right - for the last 3 weeks, Commercials have been adding to longs and cutting shorts, but values have been against them - so far, at least ...

In EUROS, spreads have continued to give little guidance, comprising only 0.5% of the total O/I for the last 2 weeks. But Commercials have moved from 23.8% of all longs 2 weeks ago, through 34.5% last week, to 42.5% most recently - the highest level since January. Their shorts, similarly, have moved from 71.5% through 67.5% to 63.2%, giving a nett of minus 20.8 - however, in January, they were nett long ...
Overall latest nett positions were: Commercials minus 20.8 (from minus 33.0), Big Specs plus 16.7 (from plus 25.4, and plus 38.0 the week before). Small Specs were plus 4.1 (from plus 7.6), with their share of the total O/I down to 19.4%, from a more normal 25% or so, which may be evidence of indecision. Commercials are usually right in the long run, but it can be a rough ride ....

BP total O/I continued to move higher, with Commercials adding to longs and reducing shorts, both overall and as a percentage. Their share of the total stood most recently at 40.8%, versus 28.4 and 20.5 in the 2 weeks before. Shorts were 48.0, versus 61.0 and 63.6, with their nett standing at minus 7.2 against minus 32.6 and minus 43.2; Big Specs reduced their proportionate longs, to 29.3 from 38.3 and 48.2, with shorts moving to 30.2 from 21.5 and 23.4. Small Specs also reduced their longs and added to shorts, netting out at plus 8.1, versus 15.8 and 18.3 in the previous 2 weeks. Same comment as Euros applies ...

I had said GOLD and S&P comments would follow - in fact, any changes are minimal, and give little fresh guidance ...