Futures Market Outlook: COT & Seasonal Analysis

Futures Market Outlook: COT & Seasonal Analysis 📈

Here is an overall weekly market outlook, highlighting the clearest opportunities across futures markets for the week ahead. By analyzing Commitment of Traders (COT) data, key fundamental news, volume and open interest trends, and seasonality, I've identified markets with the most coherent signals, enabling traders to navigate with informed precision regardless of their directional bias.

Ranked Shortlist of Futures Markets for the Week

Our assessment ranks markets from the clearest to the most ambiguous in their fundamental drivers, offering insights into where conviction lies.

#1 S&P 500 (ESU25): Clear Bearish Outlook

This market presents a clear bearish alignment, primarily driven by non-commercial traders aggressively expanding their net short positions, a trend emphatically supported by a significant rise in open interest indicating new capital entering with strong conviction. Robust volume on the COT reporting date confirmed active positioning, all against a backdrop of mixed fundamental signals including inflationary pressures and geopolitical uncertainty. While August seasonality has a mild positive average return, its propensity for significant price swings reinforces the current bearish conviction.

#2 Crude Oil (WTI Oct '25): Decidedly Bearish Outlook

Crude Oil presents a decidedly bearish outlook, primarily driven by a strong bearish shift in speculative positioning from non-commercial traders. This sentiment is further underscored by a significant unwinding of total open interest, suggesting market participants are closing positions amidst a lack of conviction. Active daily volumes have been noted, while the unresolved geopolitical situation following the Trump-Putin summit adds to uncertainty, aligning with a slight bearish seasonal tendency for August.

#3 Platinum (PLV25): Clear Bullish Outlook

Platinum shows a clear bullish signal, with speculative players exhibiting decidedly bullish sentiment through a significant increase in net long positions. This conviction is reinforced by a late-week surge in open interest, suggesting new money entering the market, and supported by a weakening U.S. dollar, making the commodity fundamentally more attractive. Active trading volumes are present, and August seasonality has historically been very favorable, further aligning with the bullish bias.

#4 Natural Gas (NGV25): Strong Bearish Outlook

Natural Gas has a strong bearish bias, fundamentally driven by a persistent oversupply narrative with raised production forecasts and record-high output. This is supported by speculative traders maintaining a significant net short bias across key contracts, and a consistent increase in open interest indicating conviction in the prevailing trend, often accompanied by high trading volumes. While August seasonality typically shows a slight positive bias, the overwhelming supply fundamentals are expected to temper this historical tendency.

#5 Euro (Euro FX Sep '25): Cautiously Bullish Outlook

The Euro presents a cautiously bullish outlook, primarily supported by rising German bond yields and a weakening U.S. dollar, providing a strong fundamental underpinning. An increase in open interest, coupled with upward price movement, confirms new money and conviction in this trend. While non-commercial net longs slightly decreased, commercial traders became less bearish, though August seasonality historically acts as a slight headwind.

#6 British Pound (B6U25): Neutral to Slightly Bearish Outlook

The British Pound leans Neutral to slightly Bearish, primarily due to the significant and increasing net short positioning among non-commercial traders. This strong speculative conviction is aligned with a historical bearish seasonality for August. While continued U.S. dollar weakness offers some support, unresolved geopolitical tensions from the Anchorage summit and rising German bond yields introduce European uncertainty that could weigh on the Pound, amidst fluctuating daily trading volumes and increased overall open interest.

#7 Copper (HGU25): Bullish Speculative Bias with Caution

Copper shows a bullish bias from a speculative standpoint, driven by a significant increase in non-commercial net long positions and a weaker U.S. dollar. However, this is countered by a decline in total open interest, suggesting that some of the buying could be short covering rather than entirely new money entering. Volume was substantial during the price rise, but August historically tends to show a slight negative average return, presenting a challenging environment for upward momentum.

#8 Silver (SIU25): Neutral to Slightly Bearish Short-Term Outlook

Silver has a neutral to slightly bearish very short-term bias, as non-commercial traders significantly reduced their net long exposure, indicating a cooling off or profit-taking. This is reflected in a decrease in total open interest, suggesting a lack of strong directional conviction amidst the unwinding of positions. While a weaker U.S. dollar and ongoing geopolitical uncertainty provide underlying fundamental support, September historically presents a more challenging seasonal picture, with a slight price dip observed on Friday amidst the unwinding.

#9 Gold (GCZ25): Conflicting Signals

Gold presents a complex picture with conflicting signals, as large speculative traders demonstrated a notable bearish shift by reducing their net long exposure. This unwinding of positions is further indicated by a decrease in total open interest, suggesting a lack of strong conviction. However, this bearish positioning is counterbalanced by recent U.S. dollar weakness and persistent geopolitical uncertainty, which are fundamentally supportive of gold. Crucially, August historically shows a strong bullish seasonal bias, with prices moving higher 75% of the time.

#10 US Dollar Index (DXU25): Nuanced Bearish Outlook

The US Dollar Index has a bearish immediate sentiment but a nuanced outlook, as recent fundamental weakness from disappointing consumer sentiment and increased Fed rate cut expectations weigh on the currency. However, the Commitment of Traders report shows non-commercial traders moderating their bearish conviction by increasing long positions, while declining volume on Friday's price drop suggests a lack of strong selling conviction. Despite a slight increase in overall open interest, historically positive seasonality for late August and September offers a potential long-term tailwind that conflicts with the immediate headwinds.

Closing Note

This week, markets like the S&P 500, Crude Oil, Platinum, and Natural Gas offer relatively clear directional biases supported by multiple analytical factors, providing clearer opportunities for traders. Conversely, assets like Gold and the US Dollar Index present more conflicting signals, warranting heightened caution and agile risk management. As always, continuous monitoring of incoming data and geopolitical developments will be paramount for successful navigation.

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Trade smart,

Joseph O.

SmartMoneyTrade.com

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