Welcome to babypips follow a long and take it all in. Go slow and it will all come to you. Good to see you are starting out learning PA and market flow along with how to read COT reports. That IMO is the best place for any trader to start
Hi everyone,
The latest Commitments of Traders review is out (here).
As promised, from this week I am posting on the recent developments in the report. This will be based on the weekly cot review that I follow.
Cotton
COT Change (52W) / C-39%, LS-31%, SS-21% /
COT Index (3 year lb.) / C-92%, LS-7% /
In the last two month we can see that all major participants in this market are changing their net positions pretty rapidly. The latest report shows that Commercials have gone from net short level of 5000 contracts to net long 10-11 thousand contracts and of course this meant that Large Speculators have turned net short. If we look at the near term picture, this change size in positions could easily signal a bottom in prices and we could witness higher prices in a few days. The long term picture is also bullish, if we look at the 10 year chart for example. We can see that whenever Commercials where net long, prices bottomed. As they started to exit their long positions and increased their short positions, prices started to rally.
Lumber
COT Change (52W) / C-21%, LS-14%, SS-34% /
COT Extreme / SS-354 report extreme /
COT Index (3 year lb.) / SS-100% /
I have indicated on the chart the place and time, when Small Speculators where at such levels. Commercials and Large Speculators could still become more extreme so higher prices are still possible, but stress levels are definitely building up.
Japanese Yen
COT Extreme /SS-All Time/
COT Index (3 year lb.) / C-89%, LS-22%, SS-0% /
The COT extreme is visible, and as the past examples indicate, we are in for a rally.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi Dstan,
I am tagging along… I am willing to learn more about COT. Thanks for this thread…
Hey Dstan I’m just now reading “The Commitment of Traders Bible”. I’m sure as I read and you continue to post I’ll have many questions for you.
Thanks to PipNRoll for letting me know this topic is going!
Good news! That’s a must read book:) Looking forward to your questions!
All the best,
Dunstan
It looks like the Japanese yen rally has started 
Let’s wait and see:)
Hi everyone,
The latest Commitments of Traders review is out (here).
30-Year Bond
COT Change (52W) / C-33%, LS-37%, SS-16% /
COT Index (5 year lb.) / C-25%, LS-77% /
The COT change in Commercials put 30-Year Bond on top of the list. It may look like a strong signal, but I can’t find too many supporting examples in the past. On the other hand, the extreme that we can see (the COT Index shows us clearly --> I have indicated on the chart) and also the close resistance level (as stated in the review) giving a potentially good risk/reward are factors that are supporting a short trade.
Soybean Oil
COT Extreme / C-All Time extreme, LS-405 report extreme /
It’s unnecessary to write too much here, since the attached chart shows everything. The extreme is clearly visible.
Sugar
COT Extreme / C-269 report extreme, LS-267 report extreme /
COT Index (3 year lb.) / C-100%, LS-0%, SS-8% /
We can see bottoms in the price of sugar, whenever Commercials where at such levels, so similarly to other soft markets, the picture is bullish.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
When it is… I am in.
Hi everyone,
Sorry for the seemingly late update, but the recent cot report was issued Monday night…The latest Commitments of Traders review is out (here).
Russel-2000
COT Change (52W) / C-30%, LS25%, SS-42% /
COT Index (3 year lb.) / C-37%, LS-72% /
The large changes in positions are indicating a bullish move in prices, but let’s not forget about the cot extreme that we saw not long ago.
Soybean Oil
COT Extreme / LS-All Time extreme /
The extreme is still present and we can witness prices climbing higher this week.
Japanese Yen
COT Extreme / SS-All Time extreme /
The COT extreme is growing, stress levels are getting higher --> the picture is getting more and more bullish!
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi Dstan,
I don’t know if you can help me, but I follow the cot report also, but I am no expert.
Could you tell me why my graph of the gbp/usd cot report is different to the one on timingcharts.com’s British pound?
I take my details directly from the COT website for the British pound and obtain the net position for both the large spec’s and the commercials as do timing charts and plot this weekly. Here is my chart and hopefully this link works for timingcharts same graph. Both are similar except mine has taken a divergence between the large specs and commercial whereas timincharts has not?
Also timingcharts has one for the gbp/usd pair, any idea where I can get this info from the cot website?
Commodity Futures & FOREX Charts | COT Database
Thanks in advance.
John
Edit: Link to timingcharts just brings up the basic wesbsite, just added the picture!
Hi John,
Without deeply looking into timingcharts, it seems that they did not refresh the report, their cot charts are lagging a week. At least your charts and the service I use (cotbase.com) both suggest that.
By the way, why aren’t you plotting the small speculators? I know that some people consider them to be too little of an influence on markets, but in my opinion, their signals could be pretty valuable. If you consider plotting them, it is advised to use another scale in order to visualize their changes as well.
All the best,
Dunstan
Hi everyone,
The latest Commitments of Traders review is out (here).
Swiss Franc
COT Change (52W) / C-26%, LS-25%, SS-24% /
The 26% change in commercial’s position was large + the fact that only small speculators are net long add up to a bearish picture. It would be nice, if all this was happening during a cot extreme, but it could still be a winning game.
Crude Oil
COT Change (52W) / C-24%, LS-26% /
COT Index (3 year lb.) / C-81%, LS-25%, SS-26% /
Although we are a bit away from those clearly large cot extremes, the ones that are close to all time levels, if we read the cot index (based on a three year lookback period), we can see that a relative extreme exists in this market. Together with the change signal, we can state that the picture today in crude oil is more bullish than bearish.
Japanese Yen
COT Extreme / C-282 report, LS-279 report, SS-All Time /
COT Index (3 year lb.) / C-100%, LS-0%, SS-0% /
The extreme is still widening in this market, and judging by the past similar cases, we are getting closer and closer to a nice bottom in prices.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
Russel-2000
COT Change (52W) / C-44%, LS-45%, SS-34% /
COT Index (3 year lb.) / C-9%, LS-95%, SS-78% /
The large changes, the extreme the COT Index shows us and the fact that only SS are long all give us a bearish picture.
Australian Dollar
COT Extreme / C-85 report, LS-All Time /
We have an All Time COT Extreme in Large Speculators, a pretty significant extreme in Commercials also. Small Speculators could be a bit more extreme, but the general COT picture that we have today is a clear bearish picture.
Japanese Yen
COT Extreme / C-283 report, LS-280 report, SS-All Time /
COT Index (3 year lb.) / C-100%, LS-0%, SS-0% /
The extreme is still widening in this market, and judging by the past similar cases, we are getting closer and closer to a nice bottom in prices.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
Copper
COT Change (52W) / C-21%, SS-32% /
If we look at the 5 year chart of Copper, we can see that we don’t really have a clearly large COT extreme in the market. It is mainly the change size that could affect prices. As the review correctly suggests, if we look at a shorter time period, then we arrive at a relative extreme in the market. I have indicated the two last cases, when we had such a large extreme. I’m not saying that it is Copper that is the most exciting trade this week, but for anyone trading it regularly, it is wise to look at it this way.
Australian Dollar
COT Extreme / C- All Time, LS-All Time /
The extreme we saw last week in AUD has widened more, now Commercials are at their All Time levels too. It is a definite bearish picture that we have.
Japanese Yen
COT Extreme / close to All Time level everywhere /
The extreme has stopped widening in this market, which could easily mean that we have reached the extreme --> we should be witnessing higher prices soon.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
Cotton
COT Change (52W) / C-32%, LS-26%, SS-30% /
As Commercials are increasing their net short positions cotton prices start to incline – at least if we look at the past similar situations.
Palladium
COT Extreme / C-110 report, LS-All Time /
Large Speculators have reached an All Time extreme level, which seems to be a very nice bearish signal in this market.
Currencies: AUD, JPY, MXP
All Time / near All Time extremes in all of these markets!!
I wish all of you MERRY CHRISTMAS AND A VERY HAPPY (AND PROFITABLE :)) NEW YEAR!
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
5-Year Note
COT Change (52W) / C-25%, LS-19%, SS-33% /
COT Index (3 year lb.) / C-83%, LS-18%, SS-54% /
We’ve got a couple of bullish signals in this report --> 1) The change in positions of traders was large 2) COT extreme (not an All Time, but still measurable) 3) Both Commercials and Large Speculators are NET LONG, only Small Speculators are on the short side.
Silver
COT Change (52W) / C-19%, LS-15%, SS-21% /
Although we see a large change in this report for silver, let’s not forget that usually these are short lasting signals that could affect prices for a few days. The general picture, the extreme in the market has an opposite directional signal. If we look at the last COT extreme (approx. a month ago), you can see that prices have started to react and thus fall. This signal is still in place, at least until the COT extreme starts to widen again and we see levels of net short ~55-60 thousand contracts for Commercials / net long ~40-45 thousand contracts for Large Speculators / net long ~20-25 thousand contracts for Small Speculators.
Japanese Yen
COT Extreme / SS-All Time /
COT Index (3 year lb.) / C-98%, LS-6%, SS-0% /
After two weeks, small speculators are again All Time Extreme. It looks as if this extreme will widen a bit more; stress levels have not reached their peak point yet. It is not an easy game, so it could be wise to be careful in this market and not to aim to catch the exact bottom --> A good strategy may be, to wait until we see a significant move away from these extreme levels and this coinciding with increasing prices --> to wait for the bottom to be visible. For example: Commercials pull back to ~100 thousand contracts net long, Large Speculators decrease net short levels to ~60-65 thousand contracts and small speculators go back to net short of ~30-40 contracts. As this happens, Yen goes to 1.18-1.20. Although this way we give up “a couple of” pips, the reward potential will still be large enough for the trade to be worth it and we stay away from some loosing traders while prices fall.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
Orange Juice
COT Change (52W) / C-16%, LS-13%, SS-23% /
COT Index (3 year lb.) / C-49%, LS-49%, SS-62% /
The relative cot extreme signal from two weeks ago that started this latest price decline is in my opinion still in place. The change that we can see now is not that significant, but of course could affect prices for a few days, and we have close support levels if we were to consider a long trade. My guess is that the decline should continue.
Oats
COT Change (52W) / C-13%, SS-22% /
COT Index (3 year lb.) / C-76%, LS-34% /
I don’t necessarily agree now with this latest review… of course it is true that the best buy signal would be, if Commercials where to become net long, but a relative extreme exists – as the COT Index shows correctly - that may trigger a rally.
Palladium
COT Extreme / C-All Time, LS-All Time /
I don’t think it necessary for me to talk too much about palladium, the picture is pretty clear and if you’ve been following my thread, you should know by now that All Time extremes are the strongest cot signals. The only important remark that needs to be carefully dealt with is the fact that these extremes could widen for some weeks before they trigger a price reaction. I’ve said it before a couple of times that it is best to combine cot analysis with regular TA tools and risk management tools. What is nice in this market now is that resistance levels are very close so taking this signal and going short would have a very nice Risk/Reward ratio. So the conclusion is that we don’t know for sure that prices will fall from here, but the odds of this happening are high – thanks to the high stress level in the market – and the risk taken on a possible trade would be low.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
Hi everyone,
The latest Commitments of Traders review is out (here).
Orange Juice
COT Change (52W) / C-27%, LS-31% /
COT Index (3 year lb.) / C-68%, LS-25%, SS-61% /
The change size this week was greater than the previous week, we are moving away with large steps from the last cot extreme that started this latest decline. As this is happening, we get closer to a relative extreme that will have a bullish signal --> look at the previous couple of bottoms in price correlating with relative extremes in COT.
USD Index
COT Change (52W) / C-27%, LS-25%, SS-27% /
COT Index (3 year lb.) / C-69%, LS-32%, SS-27% /
The last significant cot extreme happened two weeks ago, when Commercials were net long almost 15.000 contracts. Following this signal, prices started to go higher and commercials have cut back from their long position. In my opinion if prices decline below 79, we could see a widening of this mentioned cot extreme, seeing net long positions of >15.000 contracts for commercials. Till that happens, the cot extreme from two weeks ago is in place and we should be expecting higher prices.
5-Year Note
COT Extreme / C & LS-143 report extreme /
If you look at the longer chart of 5-year note, you can see that almost all the time, when Commercials were net long / at the net 0 level, that coincided with a bottom in prices. We are witnessing this again, furthermore we are at an important support level that would give us the opportunity to use close stops --> giving us a good Risk/Reward for the trade.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
the original COT report --> here
COT charts --> here
