Weekly Fundamentals - 15 May 2016

 
THE WEEK AHEAD FUNDAMENTALLY - KEY DATA TO WATCH OUT FOR
 
 
In conclusion to our report last week we wrote:
"Similarly to last week I run the risk of sounding repetitive but only until COT data tells me otherwise I will remain repetitive.
Therefore my recommendations for next week are as follows:
Buy risk as measured by both the RUSSELL2000 and the NASDAQ100.
Sell gold and silver in large quantities.
Buy the USD especially against the YEN, CAN$, AUD and NZD.
 
I know I am beginning to sound like a stuck record. Better a stuck record, stick to my leading indicators then recommend trades that do not exist."
 
Now let us see how we fared on our trade recommendations.
We favoured the RUSSELL2000 and the NASDAQ100 over and above the SP500 last week. All three fell so this was a bad recommendation. Only good thing is that both the RUSSELL2000 and the NASDAQ100 fell less than the SP500.
We recommended selling gold and silver in large quantities. We were right in both cases.
We recommended buying the USD against the YEN, CAN$, AUD and NZD. Again we were right in all cases albeit marginally so in the case of the CAN$ and NZD.
 
A good week.
 
A reasonably busy week in terms of data with some Central bank activity and culminating in G7 meeting.
 
USD: The US$ Index rose sharply over the week.
On Tuesday we have Building Permits expected to rise from 1.09M to 1.13M. This is followed by CPI and Core CPI which excludes food and energy. The former is expected to jump from 0.1% to 0.4% and the latter from 0.1% to 0.2%.
On Wednesday we have Crude Oil Inventories and the important FOMC Meeting Minutes.
On Thursday we have the Fed Manufacturing Index which is expected to make a strong move from last month's -1.6 to 3.2. We also have the customary Unemployment Claims number estimated to be 276,000 from last month's 294,000.
Thursday also marks the beginning of the two day G7 meetings.
COT data shows that large commercials very slightly increased their net short position in the US$ Index from -14,628 to -16,904. This continues to be close to a 52 week rolling extreme. We therefore remain VERY BULLISH.
 
EURO: The EURO fell sharply against the USD last week.
There is no data for the EURO this week with exception of the two day G7 meetings starting on Thursday.

COT data for the Euro shows that large commercials slightly increased their net long position from +27,558 to +29,484. This remains very close to a 52 week low so we therefore remain BEARISH.
 
GBP: The GBP fell against the USD last week.
A reasonably busy week for the GBP.
We start on Tuesday with CPI expected to remain unchanged at 0.5%.
On Wednesday we have the Average earning Index which is expected to fall from 1.8% to 1.7%. We also have the Claimant Count Change which is thought to move from 6,700 to 4,100.
On Thursday we have Retail Sales expected to rise from last month's -1.3% to 0.7%.
COT shows that large commercials continue to decrease their net long position from +56,878 to +55,022. We therefore remain SLIGHTLY BULLISH.
 
YEN: The YEN fell against the USD last week.
On Tuesday we have the GDP number thought to rise from -0.3% to 0.1%.
Besides this we have the G7 meetings.
COT data shows that large commercials decreased their net short position from -65,495 to -63,294. This remains close to a 52 week extreme and so we therefore remain VERY BEARISH.
 
AUD: The AUD fell very sharply against the USD last week.
An important week for the AUD.
On Monday we have the Monetary Policy Meeting Minutes.
On Wednesday we have the Employment Change number expected to move from last month's 26,100 to 12,300. The Unemployment rate figure is expected to creep up from 5.7% to 5.8%.
COT data shows that large commercials decreased their net short position from -58,577 to -42,718. This is the second time in 12 weeks that the large commercials have increased their net long position. We therefore remain VERY BEARISH.
 
CNY: here is no data for the CNY this week.
There is no COT data for the CNY.
 
COT data of note on products we regularly comment on in our DAILY REPORTS and WEEKLY BONUS VIDEOS and for those products which show large commercials with extreme net positions.
 
S&P500: Large commercials continue to decrease their huge net long position from +100,650 to +86,643 last week. This is no longer close to the 52 week rolling high. We therefore remain BULLISH.
GOLD: Large commercials slightly decreased their net short position from -294,901 to -284,996 last week. Now that large commercials hold a net short position which is greater than 100,000 we are bearish, in fact it is near the 300,000 level and continues to be very close 52 week rolling extreme. We have to remain SUPER BEARISH.
SILVER: Large commercials very slightly increased their net short position from -90,594 to -91,732. This continues to be a 52 week extreme and we therefore remain SUPER BEARISH.
 
The gold:silver ratio narrowed from 74.64 to 74.52 indicating very slight silver outperformance last week.
 
COPPER: Copper is an important metal as it is a leading indicator for many commodities. Large commercials increased their net long from +8,264 to +22,405 last week. Large commercials generally carry a net neutral position. This is now becoming an interesting situation on the long side so we alter our view from NEUTRAL to SLIGHTLY BULLISH.
US 30 YEAR BOND: Large commercials increased their net short position from -58,103 to -69,968 last week. We therefore alter our view from SLIGHTLY BEARISH back to BEARISH.
CRUDE OIL: Large commercials decreased their net short position from -315,207 to 291,621 last week. We remain NEUTRAL.
CAN$: Large commercials continue to increase their net short position from -30,745 to -33,890 last week. This is the 16th week in a row that the large commercials have increased their net short position and it has been at a 52 week rolling extreme for at least 11 weeks now. We therefore remain SUPER BEARISH.
NZD: Large commercials slightly decreased their net short from -10,543 to -9,689 last week. This remains close to a 52 week extreme. We therefore remain VERY BEARISH.
NASDAQ100: Large commercials substantially decreased their net short position from -10,428 and are now net long +10,494 last week. We therefore alter our view from SLIGHTLY BULLISH to BULLISH.
RUSSELL2000: Large commercials decreased their net long position from +49,674 to +46,298. This is no longer very close to the 52 week rolling extreme so we therefore alter our view from BULLISH to SLIGHTLY BULLISH.

THOUGHTS FOR NEXT WEEK
COT findings have served us well as we are making more than losing on our recommendations.
Prime examples have been our bullish stance on risk, our negative views on precious metals and our bullish view on the USD especially against the commodity currencies.
Our recommendation last week to turn bullish on the NASDAQ100 over the SP500 was again a 'good' one at least in relative terms, this week's COT findings for the NASDAQ100 proves that last week was the time to buy it.
 
This week's recommendations are by and large the same as they have been:
Buy risk in the form of NASDAQ100
Buy USD against the commodity currencies especially the CAN$
Sell the 30 year Bond
Buy Copper
Remain short the precious metals
 
For timely, accurate trade signals follow our STTS service.
For those who want to join the lucky ones receiving real time, accurate and 100% honest and transparent trade signals visit and subscribe here.

Stay nimble. Good luck trading.

CHECK OUR INTERACTIVE ECONOMIC CALENDAR FOR FULL LIST OF UPCOMING DATA RELEASES

DISCLAIMER
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Users acknowledge and agree to the fact that, by its very nature, any investment in CFDs and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Any recommendation, opinion or advice contained in such material reflects the views of TFF, and TFF expressly disclaims any responsibility for any decisions or for the suitability of any security or transaction based on it. Specifically, any decisions you may make to buy, sell or hold a security based on such research will be entirely your own and not in any way deemed to be endorsed or influenced by or attributed to TFF.
Past performance should not be seen as an indication of future performance. Market and exchange rate movements may cause the value of your investment to rise or fall and an investor may not get back the amount invested.
Investors considering opening a self-trading account should limit their exposure to maximum 10% of their investment capital.
Investments are not obligations of, deposits in, insured or guaranteed by TFF.