Follow the Smart Money / COT Analysis

Trading Discussion
189

Hi everyone,

The latest Commitments of Traders review is out.

Cocoa
COT Change (52W) / C – 45%, LS – 43%, SS – 28% /
COT Index (3 yr.) / C – 18%, LS – 84% /
The cot change signal is present: a large, bullish signal. Would have been nicer, if we could see it a bit earlier:) --> prices have already gone up significantly last week. Is there room for more rally? The longer term picture looks more bearish, so it may be a bit riskier to expect further rises… To be honest, I think it’s simply best, if we look towards other markets, where the signs are more clear.

Natural Gas
COT Extreme / C – 150, LS – 158 report COT extreme /
The extreme is relatively large (could be much larger) and at a level, where for the last two occasions, prices reacted to the signal. It is a bullish picture.

Soybean Oil
COT Extreme / C – 107, LS – 127 report COT extreme /
I find this market to be very interesting, because the cot report is bearish, although prices are low… If we look at a much longer chart, we can find much larger bearish cot extremes, so if prices start to go higher, there would be room for the extreme to get larger too, thus we could reach a top, where the extreme would seem normal.

All the best,
Dunstan

the original report

COT charts

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190

Just found your thread and it looks interesting!

A question. Do you follow other COT indicators or just the COT Index?

191

Hi BBalazs,

I’m glad you have found us:)

If you read through my very first posts, you will find all the tools that I use for cot analysis. COT Index is a tool that measures extremes in the market, similarly to the cot extreme indicator. I also like to look at the changes in Traders positions from week to week.

All the best,
Dunstan

192

Hi everyone,

The latest Commitments of Traders review is out.

S&P-400
COT Change (52W) / C – 25%, SS – 44% /
COT Extreme / C – 49 report, SS – All Time COT extreme /
The cot change signal is negative, Small Speculators extreme situation also… Could we see further decline in prices?

Coffee
COT Extreme / C, LS – 345 report COT extreme /
The cot extreme is huge, close to all time levels. This is definitely a warning that prices may not be able to continue their rise for too long. Let’s get prepared for a drop in prices.

Natural Gas
COT Extreme / C – 159, LS – 159 report COT extreme /
We have reached a cot extreme level where the last two times prices bottomed out and we could see price rally develop afterwards. This is absolutely amongst the possible outcome of this current cot signal.

All the best,
Dunstan

the original report

COT charts

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193

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500
COT Change (52W) / C – 50%, LS – 35, SS – 58% /
The picture is bullish. The large change in Trader’s position, the relative cot extreme here and the more visible, large cot extreme in the Dow support further rally.

Orange Juice
COT Extreme / C – 294, LS – 294 report COT extreme /
The cot extreme in orange juice is unquestionably large and showing a very bullish picture. Signals were nice and effective in this market, so I’d say we can really use this signal and consider a long trade.

Natural Gas
COT Extreme / C – 184, LS – 180 report COT extreme /
In contrary to OJ, here the extreme is only large in relative terms. We do see much greater extremes in the past, so it’s a bit difficult to tell, whether or not this extreme is capable of stopping the recent decline or not. It may be a wise idea to analyze other energy markets and taking into account the correlation between them.

All the best,
Dunstan

the original report

COT charts

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194

Hello Dunstan,
I’m following your analysis for more than year and seems valuable for me.

Could you please advsie me how you see actual gold and silver market ?
It seems for me that price become attractive for the long time run.
Would be glad to have your view for the market.

Wish you great trading!
Best regards
Zbigniew

195

Hi Zbigniew,

I’m glad to hear that you have found value in my thread.
Let me give you my view on silver and gold as you requested:

Gold
If you look at the chart I have attached, a few weeks ago we had a relative cot extreme that managed to push prices a bit higher. This positive move could not last for too long, last week we witnessed a heavy drop in prices.

In general, the picture is definitely more bullish: all major participants are close to their bullish cot extremes, if you look at small speculators they are net short at the moment --> they are pessimistic about the market (always a bullish signal)-

The problem is timing… Right now, we do not have an all time or close to all time cot extreme situation, which would give us an obvious signal. This decline we are in could easily continue (and in my opinion, will continue) for a few more weeks, months before prices start to stabilize.

Silver
The picture in Silver is of course very similar to Gold, due to the natural correlation between the two markets. Here also we can talk about a more bullish picture from the cot report’s point of view, although small speculators are not bearish – but hey, they’ve only been bearish once in the entire cot history (1995), so this really doesn’t mean anything:)

Similarly to Gold, I can only speculate how long this decline can go on.

Let me bring in a new “perspective” here, the USD Index, which may be helpful to us… We mustn’t forget the pretty obvious fact about commodities: they are measured in dollars. The USD is in very strong rally mode right now, so we may want to analyze it in order to speculate on other markets (like gold and silver in our example).

If you look at the USD Index chart, you can see that we have a pretty significant cot extreme in the market, bearish of course. I’d say that once the USD starts declining, we should expect it to have a positive effect on metals.

I hope this short analysis was helpful to you.

All the best,
Dunstan

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196

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal
COT Change (52W) / C – 41%, LS – 38 /
It’s really only the cot change signal that can affect prices now and of course downwards: we do not have a cot extreme situation at the moment. The last major extreme was the bullish one a few weeks ago and as you can see, it still in effect.

S&P-400
COT Extreme / LS – 317 report, SS – All Time COT extreme /
Small Speculators being all time optimistic about the market is always a warning sign:)

Natural Gas
COT Extreme / C – 185, LS – 181 report COT extreme /
Any questions here? :slight_smile: The extreme has been present for a few weeks now and we can see that prices last week managed to rally nicely, so we may have the confirmation needed think seriously about further rallies in natural gas.

All the best,
Dunstan

COT Charts

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197

Hi everyone,

The latest Commitments of Traders review is out.

Dow Jones-30
COT Change (52W) / C – 35%, LS – 27 /
Ok, the change was large, it may draw prices lower in the next few days… What I’m more interested is the long term picture. Prices are high, but we don’t see any indication from the report that we should expect the end of the rally. If you look at small specs here in the Dow, you can see how pessimistic they are about further rallies… I think that’s just a good evidence for us that supports a bullish picture.

Orange Juice
COT Extreme / LS – 296 report COT extreme /
Don’t miss out the opportunity lying here! The bullish cot extreme is present and it is unquestionably large. As you can see on the chart, OJ has reacted nicely to cot extreme signals. I think it can be a wonderful trade.

New Zealand Dollar
COT Extreme / C – All Time, LS – 125, SS - 334 report COT extreme /
Wow, another great market with a beautiful signal! All major participants of the market hold extremely large positions and similarly to OJ, judging by the past, the market is likely going to react to the signal.

All the best,
Dunstan

COT Charts

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Report44_NZD.jpg700×658 58.1 KB

201

Hello Friend,
where have you gone ?

Hope all is fine at your end.