Bloomberg Access:{OIAR<GO>}

WTI crude oil:

August WTI crude oil advanced 46 cents on volume of 1,477,580 contracts. Total open interest increased by 24,282 contracts, which relative to volume is approximately 35% below average. The August contract lost 47,502 of open interest, which means there were more than enough open interest increases in the forward months to offset the decline in August and increase total open interest. Friday’s performance was impressive.

As this report is being compiled on July 17, the August contract is trading 26 cents lower on the day. The COT report released on Friday revealed that managed money liquidated 535 of their long positions and also liquidated 29,822 of their short positions. Commercial interests added 1,006 to their long positions and also added 8,289 to their short positions.

As of the latest report tabulated on July 10, managed money was long WTI crude oil by a ratio of 2.04:1, up from the previous week of 1.71:1 and the ratio two weeks ago of 1.52:1. Though the trend appears to be higher, we have been unimpressed with the quality the rally ever since the generation of the buy signal on July 3. Stand aside.

Copper:

September copper advanced 2.95 cents on volume of 70,666 contracts. Total interest increased by 2,429 contracts, which relative to volume is approximately 30% above average and this means that new buyers entered the market in substantial numbers and drove prices to a high of 2.6960.

As this report is being compiled on July 17, the September contract is trading higher again and has made a new high for the move of 2.7375, which is the highest print on the continuation chart since 2.7565 made the week of February 27, 2017. The improving outlook for the Chinese economy is undoubtedly giving copper a bid and though we would not recommend bullish positions the current prices, it appears the path of least resistance is higher.

The COT report released on Friday revealed that managed money liquidated 4,268 of their long positions and also liquidated 1,673 of their short positions. Commercial interests liquidated 239 of their long positions and also liquidated 2,793 of their short positions. As of the report tabulated on July 10, managed money is long copper by a ratio 2.91:1, up from the previous week of 2.83:1 and the ratio two weeks ago of 2.60:1.

British pound:

The September British pound advanced by a strong 1.43 cents on volume of 131,297 contracts. Though volume was heavy, the open interest increase was spectacular, up 10,500 contracts, which relative to volume is approximately 230% above average.. This means that huge numbers of new buyers were entering the futures market and driving the September contract to a high of 1.3141, which is the highest print since 1.3141 made the week of September 19, 2016 by the December 2016 contract.

The COT report released on Friday revealed the leveraged funds liquidated 2,809 of their long positions and also liquidated 11,362 of their short positions. As of the latest report tabulated on July 10, leverage funds were short the pound by a ratio of 1.24:1, down from the previous week of 1.44:1 and the ratio two weeks ago of 1.45:1.

Much of the continued upward movement of the pound will depend upon whether the Bank of England raises interest rates. At this juncture, it appears the path of least resistance is higher. Do not attempt to pick a top in the pound. On June 28, OIA announced the September pound generated short and intermediate term buy signals.