The latest Commitments of Traders report was released, covering positions through Tuesday
The 3-Year Min/Max Screen shows that "smart money" commercial hedgers established new multi-year short exposure to copper, further pushing their commodity exposure to a record low. In copper, hedgers are now holding more than 30% of the open interest net short, the most since 2005. Prior to then, it didn't work as well as a contrary indicator. Since then, the Backtest Engine shows that whenever they held more than 25% net short, copper copped out and retreated in the weeks ahead. In stocks, hedgers reduced their shorts further. It's highly unusual to see this during a rallying market, but then again their behavior was odd for much of June - September. It's possible that something has changed in this data compared to the past decade, perhaps the sustained and record-breaking option volume. Other markets showed mostly modest changes, usually in slight reversals to recent trends.