Staying Sharp with COT Data Insights
CPI week - Where Speculative Pain Meets Commercial Reality.
This week, I focus exclusively on markets displaying higher probability setups for short to medium-term traders. By concentrating analysis where opportunity clarity is highest, we extract actionable positioning insights with minimal noise.
➡️ Now, let’s dive in.
📈 INDICES:
Speculative Pain and the VIX Rollover
Our conviction rule for YM outperformance was not met. As outlined last week, the failure to secure a bodily close above the Friday, May 1st high on Monday weakened our argument. While we remained bullish, our focus shifted back to NQ as it continues to be on an absolute tear.
You might be in disbelief at this phenomenal movement, but we see it as a perfect case in point of our thesis from last week. The Non-commercials are our real-time indicator of market pain. They keep adding to their shorts at All-Time Highs; we call this Bad Practice. But it serves as fuel for higher prices until they capitulate. Their exhaustion on these shorts is our flipping stage. It’s been a remarkable run thus far.
Looking at positioning for the week ahead, the bullish case has weakened. Last week’s price action post-Tuesday was violently aggressive, lending credence to our suspicion that structural damage has been done. The latest CFTC report confirms this:
Commercial Surge: Commercial short interest surged from 139k to 162k contracts (+16%); the highest level since the Mar ’26 expiry. When we see shifts like this, we call for caution.
Weekly Flow Flip: For the first time, Commercial shorts (12.9k) supersede their longs (8.5k) on a weekly flow basis. Meanwhile, Non-commercials hold a minuscule 4k longs.
Weakened Conviction: Look at the weekly flow shift. Last week, Non-commercials added 13.8k shorts. This week? Only 677. This is a telltale sign of weakened conviction after most probably being smoked and ran over by the violent move higher.
The Tuesday Catalyst: We make the case for bullish follow-through into the Tuesday NY close, followed by a struggle for higher prices for the rest of the week. Why Tuesday? It sits right at the heart of the VIX rollover. CFTC data shows Commercials are not aggressively positioned into it, while Non-commercials are taking the lead. It’s a hard call, but Tuesday close is exactly where we expect waning bullishness on Indices.
Actionable Insight: This call is most distinct on the Russell (RTY), which shows a clear bearish bias from the Commercials. RTY is our favored pair to express this bearish view post-Tuesday close, following the CPI release. This will be the best place to be for NY Session shorts.
💱FX: 💵DXY, 6J, 6A, 6C Crosses & The Policy Meeting Effect
DXY: We remain at a critical point. As long as the Jan 2026 Open price remains bid, no material breakdown is expected. Since we are trading above it, we remain tactically bullish, cognizant of headline news flow. This is not a trending environment.
This week highlights a clear shift in commitment:
Commercials have decisively flipped bullish on a weekly basis.
Non-commercials are now holding their most bearish net positioning since the start of the Mar ’26 contracts.
We side with the Commercials. We expect this speculative bearishness to serve as fuel for higher prices as Commercials defend the Open price level. Expect a bullish repricing for DXY post-Tuesday close. The magnitude depends entirely on the CPI, PPI, and Retail Sales prints. A bullish surprise validates our base case; a bearish surprise weakens it. We don’t stand against economic data; we give way when it contradicts our views.
CAD (6C): Turtle Soup Short Setup 🎯
Two weeks ago, we made our case for CAD shorts building into a turtle soup setup. It took one week to form, and last week to fully deliver. We are fully satisfied with the outcome, we were bang on point.
Before
After
Next Move: We make the case for a further breakdown to at least the Wed, Apr 15 low. If we see a 30-min displacement below the NFP low, we expect this to materialize starting Tuesday, pending CPI validation. Any data that contradicts us keeps us on the sidelines.
AUD: EURAUD Kill Zone
EURAUD shorts were our favored play. TP 1 Hit. The RBA hiked as expected, and the market reaction was directional post-press conference right into our two overnight session kill zone.
Before
After
The positioning dynamics that made this trade possible remain, but we lack a fresh catalyst for sustained directionality. We are taking a backseat here; fully satisfied with the playout.
YEN (6J): Back in Focus
For the week ahead, we flip bearish on the YEN, looking to the economic calendar as our catalyst. Bullish US prints (CPI, PPI, Retail Sales) are sufficient to drive the YEN lower because the positioning is already tilted toward this outcome.
Commercials are covering longs massively and adding shorts—this is conviction.
Conversely, we see a massive flush in the shorts built by Non-commercials following their capitulation during the 3% MoF intervention move. When we see blood on the streets, we are most enticed to take a position. The capitulation of shorts makes it a viable time to build shorts again alongside the Commercials. This is a one-week view, valid from Tuesday upon data confirmation.
🪙 Metals - GC
This is a hallmark of adherence to a system. Two weeks ago, we warned that our shorts were no longer viable for full bearishness following the BOJ and FOMC, advising a close-off of max shorts by the Tuesday close.
Well, well, well. It just happened to be the exact base of the low for last week. We find this a massive validation of our process: evaluating positioning, catalysts, timing, and invalidation of bias. Sticking to this process ensures longevity. Shorts are back on the table, heavily dependent on the economic releases where a bullish DXY will pressure GC lower.
🌾 Grains: ZW
This is a B-setup, as price structure validation matters immensely here. We expect this to be in play from the Tuesday close, with entries possible only in the NY session based on a validated bullish structure.
☕ Softs: CC, KC & SB
Cocoa (CC): Back in April (read here), we declared CC had changed character into a multi-week build. Our laid-out targets have been smashed. Zooming out to the 3M view, we shift focus to the main bearish trend and wait for positioning to validate it into the July '26 contract.
Before:
After
Coffee (KC): KC becomes interesting. Commercials have been rolling back their long commitments for the past 4 weeks. In this environment, Non-commercials will dominate with shorts and drive coffee lower.
Trigger: A 30-min displacement below Q1 lows activates Coffee shorts toward our TP 1 of 263.05 (Jul ’26 contract).
Sugar (SB): Sugar is of particular interest for a short continuation.
Let’s take a look at the positioning on SB
We see a stark waning interest for longs by Commercials, while Non-commercials are busy reinforcing their shorts. We go along with the Non-commercials here.
Trigger: Shorts are valid upon the Tuesday close, provided price action validates with a 30-min displacement lower.
₿ Crypto: ETH & BTC
ETH/BTC Turtle Soup Short Setup 🎯
ETH serves as our validation for shorts on both assets. We want to see Q2 highs formed, followed by a failure to make higher highs and a breakdown. Ideally, this is confirmed by the Tuesday close, with a breakdown playing out from Wednesday.
📝 PREP NOTES:
CPI Week: Best for Intraday Opportunities
We’ve historically found CPI release weeks to be optimal for intraday trading opportunities. This week brings that opportunity set back into focus, with important caveats:
Current Backdrop:
We maintain active awareness of geopolitical headlines (e.g., US-Iran negotiations breakthrough), but we continue to trade our positioning theses while respecting headline-driven repricing.
🎯 TACTICAL BIAS FOR THE WEEK
📊 INDICES
Bearish RTY in NY Sessions (9:30 am onward) starting Tuesday. Most bearish post-VIX rollover (Looking for 30-min displacement higher on VIX at 9:30 am Wed or Thur for confirmation).
💱 FX
DXY: Expect higher prices Post Tuesday close
CAD: Bearish Post Tuesday close.
JPY: Bearish Post Tuesday close.
🌾 GRAINS (ZW) - (B-setup)
Bullish ZW
☕ SOFTS (KC & SB)
Bearish KC once Q1 lows are swept !
Bearish SB post-Tuesday close (wait for a 30mins displacement lowe)
₿ Crypto
ETH and BTC shorts upon Tuesday close.
🎯 Stay sharp. 💡 Stay nimble.
🧠 Regime Recap by Asset Class
We intentionally move slowly when updating broader regime views. A meaningful pivot in positioning data is required before we shift base cases. Until that occurs, our existing frameworks remain intact—with selective weekly updates focused only on assets that begin to stand out.
This is a week for discipline, patience, and regime respect.
📊 Indices
Regime: Consolidation (B)
Bias: Bearish tilt
💱 FX
DXY
Regime: Consolidation (B)
Bias: Bearish tilt
Regime: Reversal (A)
Bias: Bearish tilt
₿ Crypto
Regime: Consolidation (B)
Bias: Neutral
☕ Soft Commodities
Coffee
Regime: Trending
Bias: Bearish tilt (potential flip from Structural Bullishness confirmed )
Regime: Reversal (A)
Bias: Bullish tilt
🔥 Energies
Natural Gas
Regime: Reversal (A)
Bias: Bullish tilt (Awaiting price–positioning alignment)
🌾 Grains
Wheat
Regime: Reversal (A)
Bias: Bearish tilt (Range extreme + elevated OI remains key)
Corn
Regime: Reversal (A)
Bias: Bullish tilt
🪙 Metals
Gold (GC)
Regime: Consolidation (B)
Bias: Bearish tilt