After missing a couple of reports due to traveling, it's time to catch up. A lot has happened over the last 3-4 weeks, most notably the persistent unrest in the middle east and North Africa -particularly in Libya - and, of course, earth quake in Japan and the nuclear crisis that ensued. Through this bumpy ride, markets remained in favor of risk and the US stock market was able to maintain its multi-month highs as yields on US treasuries began to creep up again. However, the most recent COT reports signal a mood swing may already be in play.
Of the nine reports we look at, the S&P 500 E-minis report provides the most ominous reading of all. After a sharp spike in net positive position last week, we now can see a huge swing in non-commercial positions to the negative side. Combined with a smaller net-short position in Ten Year Notes and a higher net-positive position in JPY, these reports suggest a risk aversion mood is setting in.
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