The COT Report for the week ending March 1, 2011 is a rather interesting one. Most important, oil looks poised for further upside. The commercial net position has gone extremely net short (remember, commercial shorts strength and buys weakness). Copper on the other hand looks to be rolling over in terms of how commercial traders are positioned. Both of these should put downside pressure on the SPX.
The USD on the other hand is a tricky one to read. There are two USD charts below, one of commercial net and another non reporting net (small retail). Both of these charts imply further USD weakness but non reporting has gone short rather aggressively which could be the fuel needed for a decent squeeze in the face of the excessive talk about the end of the USD. Additionally the divergence in positions between commercial and non reporting is at its widest in well over a year. The group think trade is further downside weakness but the opposite may in fact happen. On the other hand the USD did just break a three year trend line.
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