Oil - COT signalling uptrend?

Discussion in 'Energy Futures' started by Babak, Sep 29, 2005.

  1. Babak


    I was just glancing at historical COTs for several years and noticed that whenever the commercials flipped from net short to net long AND immediately increased this net long position to double or more of the initial flip amount, oil made a significant bottom (intermediate to long term).

    It just did that again, btw. I know, everyone is talking about the H/S in oil that Meisler pointed out but when everyone sees a formation I think its discounted. Remember the huge H/S in the indices everyone was nervous about in 2002?

    BCA just put out a cyclical 'get out' message re oil btw.

    edit: I was thinking about this and maybe this has significance because the natural position for comm. is to be short. So when they switch from this normal position it means something has changed. Similar to how insiders usually sell when a stock goes up - this is normal. But when they sell after a stock has tanked - that should make you sit up and take notice.
  2. Babak


    Well, that was a bad call. Back to the drawing board. :p
  3. green


    COT....I never could detect a useful correlation of COT to market direction even when I applied textbook explanations/applications of it.

    I will be watching your posts for better experiences than I had with it.
  4. Brandonf

    Brandonf ET Sponsor

    There was an interesting article in Futures Magazine about the effect of long only commodity funds on a number of the futures markets. Oil was heavily mentioned as one being effected in a big way.

  5. I haven't looked at oil as much, but I have used the CoT reports successfully in natural gas. I wrote an article in the August issue of TASC about it, which, while not earth-shattering or anything, makes a few good observations, imho.