COT Black: Diverging Like ’13?

During the week of February 21, 2017, Money Managers (MGR) in the WTI futures market went all the way for higher oil prices. The CFTC Commitment of Traders (COT) report showed a then-record 405k net to the long side. For whatever reason(s), oil prices didn’t necessarily follow at least not in the same nearly direct…


Still No Plausible Path To Hysteria

The yearlong wireless data plan nightmare is officially over. For the second month in a row, the CPI for Wireless Telephone Services, which includes any unlimited data at fixed prices, was more stable in its annual comparison. In April 2018, the index was nearly flat to April 2017; down by less than 1%. It was,…


Moving Past The Oily Path of Least Resistance?

On April 6, the Trump administration announced a new round of sanctions imposed upon certain Russian officials, persons, and businesses. Treasury Secretary Steve Mnuchin announced their purported purpose in a letter: “The Russian government operates for the disproportionate benefit of oligarchs and government elites.” Russia’s currency, the ruble (RUB), fell sharply after the announcement as…


COT Black: Whose Seasonality?

Is there a seasonal pattern to oil prices? It is beginning to look that way, though statistical purests would object to a sample size of two. Over the past couple of years, the switch between “reflation” and anti-“reflation” has taken on a little too much familiarity in terms of time and timing. In the summer…


Durable and Capital Goods, Distortions Big And Small

New orders for durable goods, excluding transportation industries, rose 9.1% year-over-year (NSA) in January 2018. Shipments of the same were up 8.8%. These rates are in line with the acceleration that began in October 2017 coincident to the aftermath of hurricanes Harvey and Irma. In that way, they are somewhat misleading. The seasonally-adjusted data gives…


COT Black, Green, and Blue; Extremes But Not Extremes

No matter where one looks, there is extreme positioning in all the key markets. Each one is pulled further and further toward “reflation”, too, or in the case of the euro this “falling dollar” consistent with that idea. The world is betting big on it finally coming true, the “globally synchronized growth” to this point…


COT Black: All The Trades Are Crowded Here

Watching the crude oil market over the past few months has been a study in winding a rubber band, or a game of chicken. Each week it has been largely the same thing repeated: oil prices gently rise, backwardation in the futures curve keeps deepening, Money Managers in the futures market bet on higher oil,…


COT Black: Bad News For Jerome, Swap Dealers Seem Really Convinced

US domestic stocks of crude oil continue to be quite high and now the futures curve is only a few pennies in the front month contract from being fully backwardated again. Contango is gone, which suggests that oil market is in sight of achieving some measure of balance. That anticipated equilibrium, however, is registering at…


Reduced Trade Terms Salute The Flattened Curve

The Census Bureau reported earlier today that US imports of foreign goods jumped 9.9% year-over-year in October. That is the second largest increase since February 2012, just less than the 12% import growth recorded for January earlier this year. In both monthly cases, however, the almost normal rates of increase which would have at least…


Chart of the Week; Deconstructing and Applying BRL

Last week’s Chart of the Week kicks off this week’s, though it will have to wait for a series of explanations to get us from that one to this. A week ago, we noted the growing divergence between leveraged loan prices and WTI, two risk indicators that used to be pretty well correlated for obvious…