BLUE LINE = BRLUSD
The market began where it ended on the prior COT report, around the 210.00 level. It then gained strength and remained stead until it reached the high of 227.85, creating a 17.15c range and a net change of +13.90. The reason for the strength is vague as the position changes are contrary to what we normally see. The KC report shows commercial buying and fund selling when, in a rising market, we usually see the opposite, more like RC. But, there may be reasons for the peculiar activity, such as the roll. The K OI continues to drop while the total OI has dropped only slightly. The supplemental shows a relatively sharp increase in the delta position. Strictly on market behavior, and especially during the remainder of the week, the market encountered a great deal of selling, creating a great deal of pressure.
Implied volatility, and actual, have dropped. Warehouse certified stocks continue to climb and pressure is persistent. Spreads continue to be supported, except for KN. We may see 300.00 as projected by some in the forum but for now a strong market doesn’t look promising. However, sharp drops will be met with strong support. My guess is that we will remain in a narrow range, possibly 212.50 to 227.50 or possibly more like Nagual’s projections. In my opinion, commercial’s are now selling to specs.