Hi cdcaveman, Thank you for sharing your view on spx, you might be right, we’ll see soon I’m just saying that comparing COT analysis on indexes to other futures markets, I experienced that the signals in these markets are more reliable. But of course this is just my opinion and I could be wrong… which would be a great thing to me, cause then I could be using COT analysis more in trading Indexes. All the best, Dunstan
Several years ago I looked at the cot for the stock indicies and came to the same conclusion, the information may not tradeable because the commercials may be using the index futures more as insurance by hedging their stock portfolio as compared to other markets where they're in directionally to make a profit. Maybe looking at the spread between the cot for gold and cot for the spx may help refine the analysis.
So how much in the way of trading profits have you generated to date specifically with the use of COT info?
$345,215.10 just kidding I’ve been trading for over 11 years now and started using the COT report 5 years ago and roughly 9 month ago, I’ve been using the COT analysis tools of COTbase. As I have said it before, a system based on only the COT report would not generate very nice results, so it should be used together with other, more classical tools. Because of that, it would be difficult to tell you how much I have made purely on the usage of COT data, but even if was the case, I don’t wish to make it public. What I can tell you is that for the past 5 years my average annual return was around 27%, but again, it’s not just COT based trades. Approx. the 60-70% of my trades are based on it these days, but it used to be less. All the best, Dunstan
Hi everyone, The latest Commitments of Traders review is out (here) Silver Not much changed from last week, the size of change in positions C, LS and SS are holding changed a bit more than average (actually metals were on top again). After last week’s signal, prices did drop a bit, but the COT extreme buy signal that happened 2 month ago is still pushing prices higher. I can’ really add anything new to this compared to my 1 week ago post --> we need to wait for an extreme in COT to start thinking about a downward turn in prices. Nasdaq-100 The COT extreme that can be found in this market is pretty significant. LS are at All-Time extreme levels, but also C and SS are close to their all-time levels as well. I’m not a “big fan” of COT signals in indexes, in my experience these are the weakest signals compared to other markets, but in this case it looks as if the signal could affect prices. I have tried to find similar cases on the chart to see what happened to prices back then (see attached chart) and I could find some working cases. The close resistance level is also favorable for traders seeking a short opportunity. I wish all of you good luck to this week’s trading, All the best, Dunstan the original COT report --> here COT charts (free) --> here
Hi, I’ve just received an e-mail from a fellow trader, who was asking me to write something about the relationship of cot data and currencies, so I thought I'll share it with you as well here at IT. Well first of all, CFTC publishes COT reports on many currency futures, so the basic relationship is this; you can have a look at major market participant’s positions on these markets as well. Of course one might ask, “who are the Commercials here?” Actually they are companies, who do business internationally and require the usage of different currencies than the ones they are using at home, so they are exposed to currency risks. Does COT analysis work on currencies? My answer is: YES Let me show you a chart on AUD. I have indicated some places on the chart, where a turn in price direction coincides with some sort of extreme in the COT. Of course if you would like to trade a pair, where both currencies have futures and COT reports on them, you need to analyze both of those markets’ COT report and come to conclusion, since we don’t have COT report on currency pairs. A little analysis on currencies for you this week: AUD A COT Extreme Sell signal in the report --> COT Index: C - 12%, LS - 91%, SS – 65%. Prices have already started to decline, the recent top is not far if you were searching for resistance levels for your stop. GBP We have no COT Extreme in the market. What is interesting though is that last week only SS thought prices could go higher, C and LS both cut back on their net long positions (look at the 1 yr chart, I have indicated it). CAD The extreme here is not as big as in AUD, but still large --> COT Index: C - 22%, LS - 84%, SS – 62%. The question is, would this extreme in the COT widen more or is this a relative top in prices. If the next COT report shows us that participants are moving away from their extreme territories, I guess that would confirm the top. One thing is for sure: base on COT analysis, the picture now is more bearish than bullish. EUR There was an All-Time COT extreme buy signal not long ago (indicated on chart), but could not push prices higher. Since then, C,LS and SS have moved away from their extremes. The fact that LS are in a buying mood (cutting back on their net short positions) is a bullish signal, on the other hand if this direction in COT would start to change and we would be witnessing another move towards extreme territories, I would be expecting prices to decline some more and I would be looking for buying opportunities, when we have reached these extreme levels, I would say, C at net long >250 000 contracts, LS < 200 000 contracts and SS <40 000 contracts. JPY, CHF Nothing special, we don’t really have any COT signals now. MXP Similarly large COT extreme as in CAD --> COT Index: C - 23%, LS - 77%, SS – 67%. The picture is bearish. All the best, Dunstan