Markets Flash Warning Signs as Natural Gas Hits Record Buying Levels

The latest Commercial COT Index data from VT Markets reveals some extreme positioning in various markets. One key area to watch is natural gas, where commercial hedgers have hit 100% within its 26-week range, signaling a potential rebound. Large speculators are net short -219,767 contracts after a shift of -10,856, with prices down 4.05%. Historically, such extreme commercial buying suggests the market may be bottoming out.

Another market to monitor is Japanese Yen, which has seen a surge in speculative net longs by over 103,000 contracts, pushing the commercial index down to 0%. This signals an overcrowded bullish trade, and history shows that such extremes often precede a sharp near-term correction. Traders are advised to wait for a pullback before entering new positions.

Copper presents a dip-buying opportunity as prices dropped 1.66% despite large speculators boosting their net long positions to 92,476 contracts. The commercial index is at 0%, and global copper demand is expected to double by 2035 to meet climate goals. Taking long positions at discounted levels could yield strong returns as supply deficits tighten the market.