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CoT shows massive spread/short covering as I outlined last week. Just the initial look for now.
Certainly explains the recent peaks, as predicted.
Kamakiri CoT Notes W/E 5/10/16:
MM group reduced gross shorts and longs (futures only) for the week. -11,672 shorts and -32,698 longs. Looks like profit taking to me, as prices were up from $43.65 to $44.66 in the June contract, despite the net bearish move of -21,026.
OR group also looks like profit taking, and reduced both shorts and long futures for the week. -16,038 shorts and -21,596 longs. Small net bearish move of -5,558 for the week. Hedging with spreads, slightly stronger on the short side.
NR just barely net short. -339 net. Long futures +3,049 and Shorts +51.
Speculators (MM+OR) still have a lot of gross shorts available for covering. While there is only about 63k contracts from the 2015 lows, I feel that 718,170 short contracts is still a huge amount of short covering fuel and I predict new lows for 2016 forthcoming. Last year, the biggest spec short covering week was -73k for the W/E 5/19/14. This year there have already been HUGE short covering weeks of -83k+ contracts in both W/E 3/22/16 and 4/19/16. Notice how ALL of these are in the week of option and contract expiration as it is for this coming week. More than 90k shorts covered wouldn't surprise me for this week.
I think we got the flushout I called for last week. I think we see new highs between $48 and $52 this week, and it's going to be a wild, volatile ride.
Good luck to all!
Kamakiri CoT Notes W/E 5/3/16:
Data this report week is a little low on 'resolution' W/E 4/26 ended at $44.04 and 5/3 ended at $43.65. And net this does show up in the report as a Bearish tilt.
MM shorts showing a small futures re-load +9,111 contract and small reduction in gross longs of -1,599 contracts. With the two big up days and two larger down days ending in little change, we can be pretty sure that the positions last Friday had more short covering, but followed this Monday and Tues with significant shorting. Considering the 3 days after this report were small up days, it seems there is still near-term downside risk from MM activity.
OR group moves were less Net bearish than MM, but had greater futures position increases for the week. +17,715 shorts and +12,704 longs. OR combined positions show little net change, but +36,304 spreads indicate both sides heavily hedged. Which is not unusual for the group, IMO. Activity is Bearish, but lacking conviction.
NR still net short, but less so than last week. Still a bullish indicator.
Still lots of fuel for short covering available whether from a gross or net standpoint.
On a macro scale, I think this is consolidation for going higher. The strength of the activity makes me think a significant flushout may be in order to make that happen.
Good luck everybody!
Kamakiri CoT Notes W/E 4/26/16:
Rolling forward much like I predicted. Speculator Net combined (futures+options) positions hit new highs.
Still a fair amount of MM shorts remaining to cover. 5 more weeks worth when compared to last year. And of course, that could be shorter or longer depending on the rate of coverage. Reduction of the MM spreads is still the biggest source of profit taking/short covering for the week.
OR Futures were net short, but combined (incl. options) was a stronger net long. So new shorts are well hedged against a price move up.
NR went more short. Always a bullish sign, IMO.
Lots of shorts remaining to cover before prices peak. MM Gross shorts. OR Net shorts. NR shorts.
Good luck trading this week!
Kamakiri CoT Notes W/E 4/19/16:
Short/draft version since I skipped last week due to fake Freeze anticipation...
Huge MM short and spread covering. -49.8M bbl worth of (gross)shorts, -37.7M bbl worth of spreads on the futures only report. Futures+options showing bigger under the spread column -59.25M bbl worth.
So massive/overweight market manipulation positions have been taken off the table. A lot of 'Fuel' for short covering used.
Still a fair amount of net shorts outstanding for OR group. Could be 41k to 55k+ net short contracts to cover there. From a gross stand point easily 20k to maybe 30k.
Looks like Doha turned out to be the perfect distraction to cover! WTI price was down a dollar between this and the 4/12 report.
Good luck to us all!
Kamakiri CoT Notes W/E 4/5/16:
MM shorts increased last week and caused the dip through Tuesday. Combined with closing of Long positions and Spreads caused a bearish MM net movement of -32,672 futures positions. Combined Net Futures+Options for MM are slightly less Bearish at -26,243, indicating heavier new Call option positions.
Conversely, OR mounted or continued a very Bullish charge for the week. Gross long positions increased +29,455, and a fairly strong Net +17,275.
The good news for oil Bulls is that the added short position 'fuel' for short covering was re-loaded to a level that is close to the peak levels from Mar/Apr '15. Positions in both MM and OR are very close to that time period and can certainly spur a new rally that rivals last year's +$20 move...off of the 4/5 low of $36. We've seen part of that action from short covering in the latter part of last week.
After quickly going through the report, I immediately increased my hedges with a fairly tight strangle position that kicks in about +/-$1 move on WTI. But I also added a huge speculative out of the money call position that really kicks in at about mid $41 and will go 10x or about 1,000% if WTI tests $42 soon.
Technicals also lean Bullish IMO, as last week closed out as a very bullish engulfing formation.
Still holding a core of UWTI and keeping the rest of the swing shares that I didn't sell last week.
Please also remember that UWTI is currently 40% weighted in the Jun '16 contract CLM16.
Good luck everyone!
CoT quick notesW/E 3/29:MM,not OR increasing shorts.MM selling spreads/longs (profit taking).
Bumped up my put protection 3X in case this is the new trend MM is going to force big next week.
Good luck guys.
Kamakiri CoT notes WE 3/22/16:
MM short covering ramped up for the week. Massive numbers for late in the rally. MM spreads contracted for the second week suggesting small profit taking.
OR flipped to slight bullish sentiment. Net long with signs of light covering and spread profit taking.
Analyzed together, MM+OR still very bullish despite profit taking. Still a lot of 'fuel' for short covering to continue the rally.
Keeping the near term rally end from last week, but extending the long side 2 weeks. Estimating another 3 to 8 weeks for the rally.
Good luck to all.
Kamakiri CoT notes WE 3/15:
Massive MM short covering continues both futures only and combined continuing 4-5 week trend.
MM longs increased with current trend to new ALL TIME highs.
Extending my rally estimate from 2 to 4 weeks up to 4 to 7 and may last well into summer.
OR still Bearish sentiment, but tapering.Signs of turning bullish soon. OR longs selling rally, holding shorts level.
Net Speculator (MM+OR) still continuing Bullish trend and position exceeds peak for Oct (10/13, IIRC). About mid-way up compared to last Mar/Apr rally.
The Real Freeze Target?
Speculator Shorts. I've said from the first meeting that the Freeze was a farce and red herring. I still think that's not far from the truth, but now I think of it as more of a threat.
Why the Big Money shorts? Well, who was most directly affected by Freeze talk? Wasn't the US producers, IMO. Freeze talk would only help them and they're still reeling from the pain in the $40s. Plus, weren't they the the supposed original OPEC target? It was just the Shorts who were forced into reaction from the Freeze. And react they did. Single handed they staged a sharp short covering rally fueled in excess of 154 million barrels worth of contracts between mid-February and March.
From what I can tell, Speculator Shorts had little to do with the initial collapse of oil prices. But they certainly had a hand in driving it down to $26. Twice. At least it correlates to the CFTC CoT data that I track. I'm certain that they weren't OPEC's target when they decided to maintain production in November '14...but they are now.
So why would I call it a threat? Well, I think it proves that they can influence prices with words. And not even the word 'cut'. Imagine what would happen if they said that in a press release. I think Big shorts got the hint of what might happen if they even try for $26 again. Or maybe the other 814 million short barrels get covered.
AI
