Follow the Smart Money / COT Analysis

Discussion in 'Trading' started by Dunstan, Jul 11, 2012.

  1. Dunstan

    Dunstan

    Hi everyone,

    Although I could not find the newest commitment of traders review on cotbase.com, I’ll update the post anyway with some interesting markets:

    Wheat
    COT Change (52W) / C – 18%, LS –19% /
    COT Extreme / C – 75, LS - 75 report COT extreme /
    Both, the cot change signal and the cot extreme indicate that prices may not be able to continue (at least for too long) their current rise. The change in Traders positions was much larger than the average, so already in the near term, I expect a bit of a decline. In the medium term, prices may go up higher, but if you open a 5 years chart, you will see clearly that the extreme is becoming significant, thus we should be cautious with further buying.

    Coffee
    COT Extreme / C – 195, LS – 193 report COT extreme /
    The cot extreme is once again very large in coffee, this time it is of course a bearish cot extreme signal. Will prices top out soon, I can’ tell, but there’s a chance that prices will further rise. If you look at what happened back in 2010 when the cot extreme reached such levels, you can see that price reaction came only months afterwards.

    Soybeans
    COT Extreme / SS – 200 report COT extreme /
    Interestingly, there’s not too much to talk about if we analyze only Commercials and Large Specs activity… but if we take the time to have a look at the smaller players of the market, we will see that they ARE pretty extreme in the market, they are VERY bearish… and we know what that means:) --> bullish signal.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #241     May 5, 2014
  2. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    S&P-500
    COT Change (52W) / C – 25%, LS –17% /
    It looks like the rally can continue… The bullish cot change signals accompanied by no real bearish cot extremes paint the picture bullish in indexes.

    RBOB Gasoline
    COT Change (52W) / C – 22%, LS –25% /
    The bullish cot change signal we have in Gasoline may be able to take prices a bit higher in the short term, but if we look at the cot extreme situation, you will see that the chances of further declining prices (after the last two weeks) are higher.

    Wheat
    COT Extreme / C – 76, LS - 76 report COT extreme /
    The cot extreme is getting larger and larger week by week. I do not think that the rally can continue for too long anymore, I’m expecting prices to reach a top soon.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #242     May 12, 2014
  3. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Euro
    COT Change (52W) / C – 20%, LS –22% /
    The last major cot extreme that we has in Euro was the bullish all time cot extreme back in 2012. I believe that it is still in effect and prices are more likely to continue their rise for now. The cot change signal also signals rising prices.

    Dow Jones-30
    COT Change (52W) / C – 19%, LS – 27%, SS – 22% /
    COT Index (3yr.) / C – 75%, LS – 40%, SS – 0% /
    It is pretty interesting to see such a cot report at these price levels: we are closer to bullish cot extreme levels than bearish levels!! Ok, the cot change signal is bearish this week, but we know that if it will affect prices, only in the near term. The general picture, at least the one that is painted by the cot report, suggests that prices can rally even further!

    Wheat
    COT Extreme / LS - 77 report COT extreme /
    It seems that my feeling last week was good: we may have reached a top in Wheat. The cot extreme is large enough already, so the chances are a bit larger for declining prices.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #243     May 19, 2014
  4. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    S&P-500
    COT Change (52W) / C – 32%, LS –38% /
    The cot change IS large (bullish cot signal) and we have no bearish cot extreme, on the contrary, in some of the indexes, we are seeing more of a bullish extreme! Conclusion: although cot analysis may not be the most effective in indexes, analyzing the report, I think the rally is not over.

    Japanese Yen
    COT Change (52W) / C – 18%, LS – 12%, SS – 35% /
    The 18% in Commercials and the 12% in Large Specs (changes) wouldn’t be in my opinion something to talk about, but the 35% in Small Specs is a significant change. It is of course a bearish cot signal, so I’m expecting a bit of a decline in the near term. The cot data on the wider time horizon says that prices can continue their rise, at least the last major cot extreme signal was bullish (at the end of last year). It is still in place, until prices go below the last bottom, which would result in a widening cot extreme.

    Platinum
    COT Extreme / C – 64, LS - 64 report COT extreme /
    The bearish extreme is widening, while prices are rallying. I think there is still some time left, before we reach the next top, and it would be nice to see small speculators reaching an extreme also (above 6000 contracts net long).

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #244     May 26, 2014
  5. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Dow Jones-30
    COT Change (52W) / C – 22%, LS –22% /
    The larger than average cot change may cause a little decline, but the I’d say it is the extreme that causes me to think: the rally isn’t over yet!

    Mexican Peso
    COT Extreme / C – 51, LS - 51 report COT extreme /
    The bullish cot extreme in the beginning of this year has stopped the decline in prices. There is plenty of space for Traders to build up larger positions --> the rally should continue.

    Euro
    COT Extreme / C – 44, LS - 43 report COT extreme /
    Until we reach a significant bearish cot extreme I would say that prices can go higher. I would expect the trend to change when LS reach 100.000 contracts (or above) net long, C reach 100.000 contracts net short (or below) net short.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #245     Jun 2, 2014
  6. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Japanese Yen
    COT Change (52W) / C – 23%, LS – 17%, SS - 37 /
    The larger change suggests that prices may rally in the next few days and since the last major cot extreme is also a bullish signal, the longer term picture also looks brighter for the Japanese yen.

    Silver
    COT Extreme / C – 43, LS - 581 report COT extreme /
    Large Speculators have reached an extreme that we haven’t seen since 2003! It is an unquestionable bullish signal and luckily at a level where the Risk/Reward of the trade seems pretty decent! :)

    Australian Dollar
    COT Extreme / C – 56, LS - 56 report COT extreme /
    We may talk about a relative bearish cot extreme, not more… of course as the last example shows, such extremes may also influence prices, but looking at the chart, there is no question that there could be much greater extremes ahead of us.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #246     Jun 9, 2014
  7. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Rough Rice
    COT Change (52W) / C – 23%, LS – 26% /
    COT Index (3 yr.) / C – 77%, LS – 37%, SS – 2% /
    We had a pretty large change in Commercials and also in Large Speculators positions (looking at the last one year history, the change size was in the top 10%). It seems as if the signal came a bit late, since last week Thursday and Friday prices have rallied. Since the cot extreme situation is still bullish, I’d say that the chances of further rallying prices is larger.

    Australian Dollar
    COT Extreme / C – 59, LS – 57, SS - 59 report COT extreme /
    Not much change since last week: relatively we may talk about an extreme, but there is still reasonable space left for Traders to become even more extreme about the market. The cot report does not really give us an edge this time.

    Soybeans
    COT Extreme / C – 43, LS – 42, SS - 217 report COT extreme /
    The extreme is becoming really significant in soybeans (bullish picture). Commercials and Large Speculators have still got room for further positions, but in case of Small Speculators, they have reached All Time (close to it) extreme levels. I think prices can still decline for a while, but I’d be surprised if this decline continued for many weeks…

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #247     Jun 16, 2014
  8. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    USD Index
    COT Change (52W) / C – 48%, LS – 51% /
    The change in USD Index was HUGE (!), but not unseen… Large Speculators are long again (above 20.000 contracts net long), but the signal is still a bearish one. The last major cot extreme was a few months ago and it was a bullish signal. I don’t believe that in the medium/long term we need to expect any serious price declines.

    Crude Oil
    COT Extreme / C,LS – All Time COT extreme /
    The All Time extreme we have in Crude Oil now suggests that prices will not be able to rally further for too long… of course the all time extreme can be in the market for a few weeks or even months before any real change in the trend.

    British Pound
    COT Extreme / C – 359, LS – 340 report COT extreme /
    The cot extreme in GBP is considerable and I’m expecting prices to reach a top soon.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #248     Jun 23, 2014
  9. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Dow Jones-30
    COT Change (52W) / C – 31%, LS – 28%, SS – 31% /
    Let’s see, what do we have here… Cot extreme: we had a bullish cot extreme in the last couple of weeks, so rising prices is not surprising. The change in Traders positions this week was larger than average and a bearish signal, so we may consider a cautious trade downwards.

    Orange Juice
    COT Change (52W) / C – 22%, LS – 27% /
    Looking at the chart it seems that cot changes were pretty effective in Orange Juice in the past years… The bullish cot change signal seems to be a good signal that we can act on.

    British Pound
    COT Extreme / C – 361, LS – 342 report COT extreme /
    Prices have not yet reached their top, but as they go higher and higher, the cot extreme is becoming larger too… We may need to be a bit more patient, but I’m pretty confident that eventually prices will react to this large cot signal.

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #249     Jul 7, 2014
  10. Dunstan

    Dunstan

    Hi everyone,

    The latest Commitments of Traders review is out.

    Heating Oil
    COT Change (52W) / C – 25%, LS – 22%, SS – 30% /
    Having no extreme in the market, it is only the cot change signal that we can act on. The change in Traders positions was significant, much larger than usual. It is a bullish signal that may influence prices in the near future. Analyzing the effectiveness of cot change signals in heating oil, we can come to the conclusion that the signals are pretty effective.

    Platinum
    COT Extreme / C – 71 report, LS – All Time COT extreme /
    There is an unquestionably large cot extreme in the market (LS have never been so optimistic about the market as they are today). It would be nicer if SS were as extreme, but never the less, it is still something to talk about! Ohh, if anyone is unsure, we are talking about a bearish cot signal here:) As always, my warning: all time cot extremes can be present in a market for even months before price reaction, so be careful, pleeeease!

    Soybeans
    COT Extreme / C – 405, LS – 225 report, SS – All Time COT extreme /
    What a beautiful picture we have in Soybeans!! All major participants of the market hold extremely large net positions… (bullish cot extreme signal) If you look at the charts for all soybeans market, you’ll see how well they react to cot extreme signals, so I’m personally really excited now!:)

    All the best,
    Dunstan

    the original COT report

    COT charts
     
    #250     Jul 13, 2014