Follow the Smart Money / COT Analysis

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

  1. H2O


    What makes you think that :D
    #31     Jul 31, 2012
  2. Dunstan


    Hi HurricaneUS,

    I am a subscriber at the website you mentioned. I have been their subscriber for 8 month now… Before, I had to manually set up the COT graphs in MetaStock, which was not an easy process so I was really happy to find them.

    I don’t know of any other service that has such a COT Analysis table, but I welcome any suggestions!

    All the best,
    #32     Jul 31, 2012
  3. Dunstan


    The Chicago Wheat -->

    The latest report showed that Large Speculators are at All Time, Commercials are close to All Time Extreme levels. I have indicated on the chart for you similar situations in the past, when the picture was same/or/similar.

    Of course as I have said before, since COT analysis is not a tool to be used on its own, one should not think of this as a signal to go short, at least not right away, but it definitely signals a high level of stress in the market, which could support a bearish move soon.

    So if your system allows you to go short on this market, you would definitely have some sort of support from the COT data OR if you just found this opportunity by the usage of this report, you could analyze it, whether your system allows you to enter or not.

    All the best,
    #33     Aug 1, 2012
  4. Dunstan


    One of the most exciting markets that was mentioned (recent review), is the Wheat (Chicago), so today I’ll talk about this market.

    On the attached chart I think even someone new to the report should see that we are at an All Time (or to be precise, close to All Time) extreme picture in the Commitments of Traders report on Wheat. It is only the Small Speculators who “still got space” to become All Time extreme, but still they are also very extreme.

    I have also drawn on the price chart those places in time, when the COT picture was similar. This picture that we have now can definitely be considered a good signal from COT.

    Now obviously I cannot say that this is the time to go short, it is up to you to decide how you wish to interpret the signal, all I’m saying is that the stress level in the market – as cleverly used in the review – is becoming extremely high. It maybe that prices continue further up for a few more weeks, I don’t know, but I do know that it will be this market that I will closely monitor in the near future.

    I know that there might be traders now who are viewing my thread and are not comfortable trading futures or options on futures, so my note to them is this: there are ETFs (a great list here) that follow futures contracts and can be traded just like stocks.

    The three Wheat ETF that I found:
    WEAT: direction - Long / leverage -1x / exchange - LSE
    SWEA: direction - Short / leverage -1x / exchange - LSE
    LWEA: direction - Long / leverage -2x / exchange - LSE

    Please let me know if you have any questions,
    Have a great day,
    #34     Aug 6, 2012
  5. Dunstan


    sorry, I forgot the chart :)
    #35     Aug 6, 2012
  6. Dunstan


    Ok, I thought I’ll show you another market as well, since you might say, that I’m talking too much about wheat :)

    Cocoa was also mentioned in the review, cause the change size in Commercials position was larger than average. It was 28% to be exact. Now this market could be a good example, how to react to a market, where we haven’t got an extreme COT picture. It is only the change in positions that was such that we can talk about it.

    I think you should follow the same notes I’ve given earlier, to view this as a confirmation to your existing trading idea or it might just signal an opportunity that you should put in to your system and see whether it should be traded or not.

    In the following chart I have indicated similar pictures when Commercial’s changed their net positions this way. I wouldn’t say that this signal is as strong as the one in wheat. If prices react to this and they start to fall, they might just fall to 2000-2100 level, but hey (!), if they do that and you’re in, that’s “fair enough” :). Maybe we would get to a level in COT where it is signaling a good buy opportunity…

    The four Cocoa ETF that I found:

    NIB: direction - Long / leverage -1x / exchange - NYSE
    COCO: direction - Long / leverage -1x / exchange - LSE
    SCOC: direction - Short / leverage -1x / exchange – LSE
    LCOC: direction - Long / leverage -2x / exchange – LSE

    Please let me know if you have any questions,
    Have a great day,
    #36     Aug 6, 2012
  7. vinc



    yeah, same bs.. just like showing 'levels'.. it's 'I 'll show you levels and you decide how to interpret the signal' kind of stuff.. another subscription pusher imo..just pm him:) he won't show any strategy anyway..waste of time..
    #37     Aug 6, 2012
  8. vinc


    Hi guys!

    Today s&p will probably hit 1239 / i mean there is 50/50 % chance/ . It's up to you how you will interpret the signal. Stay tuned for more tomorrow :)
    #38     Aug 6, 2012
  9. dunstan..
    why are you so excited.... and commodity tracking etfs ... lose due to term structure curve... "roll cost"
    #39     Aug 6, 2012
  10. This chap being more polite than those 2 Chipmunks in the cartoons is a dead give away that he's selling his balderdash. When are pikers going to learn that an indicator that goes public is as worthless as a scent candle in Oprah's bathroom.

    Sherlock Rennick out:cool:
    #40     Aug 7, 2012