The extreme long / short on the Cot are a useful tool for the contrarians and AudUsd is just showing it.
Hi everyone,
The latest Commitments of Traders review is out.
Coffee
COT Change (52W) / C – 27%, LS - 25%, SS – 8% /
The change in commitments of traders report and also the extreme (Commercials net long) both give us bullish signals. When the rally starts, we’re gonna see Commercials go back to deep net short territories.
Australian Dollar
COT Extreme / C & LS – All Time COT extreme /
After last week’s rally it seem that we may have reached the bottom… if the rally continues this week, we should see market participants move away from their extremes.
Lean Hogs
COT Extreme / C & LS – All Time COT extreme /
The picture is pretty obvious here, we are at or close to the top in prices --> the extreme is huge in Lean Hogs!
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
Looking at these charts I do not see anything which is explained better by the COT charts than just by price action. Even more, the coffee chart looks like you can go either way with the provided information. Logical the small speculators are just following the market. This whole COT feels like a magic road to money again, which is usually a dead end.
Could you post some results please.
Hi Bertusch,
My apologies for replying so late, but I was out of town for a few days…
I appreciate your remark, although I can’t say that I agree with it - obviously.
The COT report has nothing to do with magic. It is a factual data that is issued weekly by the U.S. Commodity Futures Trading Commission and shows the positions of major market participants in the Futures markets. Although the charts do look similar to technical indicators, such as RSI etc… it is not derived from Price.
If you take the time to read through my earlier posts you will understand what cot analysis is all about and I have shown many example that prove the effectiveness of cot analysis.
All the best,
Dunstan
The Cot report offers a clear indication of speculators and commercials sentiment on the futures market. Excesses have to be studied and used in a contrarian optical.
Hi everyone,
The latest Commitments of Traders review is out.
Sugar
COT Change (52W) / C – 29%, LS - 25%, SS – 31% /
The latest cot report is showing us that there were large changes in Trader’s positions. This, combined with the extreme in the market suggests that prices should continue their rise.
Copper
COT Change (52W) / C – 26%, LS - 31%, SS – 11% /
The huge change in Commercials and Large Speculators positions tells us that prices may easily fall a bit, but let’s not forget that a few reports ago, we were at a major cot extreme which signaled the latest bottom and is still in effect.
Lean Hogs
COT Extreme / C & LS – All Time COT extreme /
Although there was a roll-over in contracts here, it is still obvious that price have declined since last week’s signal… the extreme in this market is supporting the further decline of prices.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
Hi everyone,
The latest Commitments of Traders review is out.
Dow Jones-30
COT Change (52W) / C – 30%, LS - 28% /
The large change in the latest cot report indicates that prices will rise instead of continuing their decline. The situation in indexes is very exciting, cause we have an extreme or to say: large stresses amongst indexes these days, but I think that (it’s just a feeling:)) we will see an even greater extreme in the next few weeks/months, before prices really reach a top.
Live Cattle
COT Change (52W) / C – 23%, LS - 24%, SS – 11% /
Both of our major cot signals are telling us that prices will fall --> We’ve witnessed another large change in Trader’s positions and as it happened, we’ve reached a relatively larger cot extreme (let’s just open a three year long chart) that is bearish signal.
Cotton
COT Extreme / LS – All Time COT extreme /
There is a definite extreme in Cotton as we can see and prices have already reacted.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
Dstan,
what do your analysis on the Cot say about the situation of Wheat?
Hi elisab,
I have attached two charts for you on wheat, one with a cot extreme analysis and one with a long term trend analysis.
On the extreme analysis you can see that when Commercials reached an extreme level of >60-70.000 contracts net long position, that period usually coincided with a bottom in Prices. (of course I could have also market Large Speculators --> almost the opposite would be true: below net short levels of 50-60.000 contracts). Since we are roughly at 70.000 contracts net long level for Commercials, I don’t think that prices could fall much deeper any more.
Timing
The Trend analysis chart shows well that truly as my thread title says, we need to follow the Smart Money --> Large Speculators are on the right side of the market in a long trend. Once they shift from net short to net long (the red arrow in the table turns green), we can talk about an up-trend. Of course it may happen, that a few reports before the shift, the rally has already started, but it is a fundamental confirmation that the “Big Guys” are buying the market/pushing prices higher!
All the best,
Dunstan
Thank you Dstan, you have confirmed my feeling that an accumulation is starting from this point.
No problem, it was my pleasure!!
All the best,
Dunstan
Thanks Dstan. One more question: what are the assets that have an extremely positive / negative sentiment basing on your analysis of the Cot?
Hi Elisab,
I hope I understood your question correctly:)… To stick to our recent example, Wheat --> a really strong confirmation for a Long trade would be in my opinion, a so called “everything is in harmony” situation, if we have the following criteria met:
COT extreme – exists, maybe even All Time
Long Term Trend signal arises – Large speculators become net long
these were signals on the cot analysis side, but as I’ve said many time before, we should look at traditional technical analysis tools as well: Strong, multiple support levels reached (Fib., EMA, RSI etc…)
Money + Risk Management reasons -> a good Risk/Reward potential
I have another way of interpreting your question, so maybe my following answer is what you were thinking of…
The cot analysis I do is pretty objective, but of course in a market-specific inertia. I do have favorite markets and even very few markets that I don’t trade…. If the liquidity is good, my portfolio “has room” for another trade and the above criteria is met (not necessarily all the time… I may choose to take a bit more risk, if my feeling in good with the trade) I will enter the trade. These are factors that affect my decision making.
Did I manage to answer your question? 
Please let me know if not, in case try to re-word your question, so that I can give it another try!
All the best,
Dunstan
Thanks very much for your answer, let’s say you have partially answered my question. I was specifically interested in what commodities, fx, index have the greatest numeric excesses on the Cot at the moment, in order to study charts and indicators and then act accordingly.
Hi Elisab,
I think I understand your question now… What I like to do weekly is have a look at the Highlights section at COTbase.com where they gather all those markets, where – to quote you – “numeric excesses” exist. In the COT report these can be either very large changes in Trader’s positions OR cot extremes. I’ve attached this table for you, so you can understand. What they do, is simply gather the top 5 markets where values were large --> I don’t need to look through each and every market, and this saves me time.
All the best,
Dunstan
Hi everyone,
The latest Commitments of Traders review is out.
S&P-500
COT Change (52W) / C – 34%, LS - 27% /
The situation is interesting here, because the large change in Trader’s position is suggesting that price should rebound / get back into rally mode, but then again, we’ve just reached a cot extreme level that could easily turn this uptrend into a down trend.
Cotton
COT Change (52W) / C – 21%, LS - 22%, SS – 15% /
Similarly to S&P, we’ve got the two major cot signals pointing in opposite directions: the change is suggesting that prices will rise, but the extreme is still in place and it is showing us a bearish picture.
Cocoa
COT Extreme / Close to All-Time COT extreme /
The Extreme in Cocoa is pushing prices lower. If Commercials could reach a net short level of <25-20.000 contracts, we’d get a relative extreme that may push prices to rally mode.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
For what concerns the Aussie, there is a clear evidence of what it means to reach extreme net short areas by speculators.
Hi everyone,
The latest Commitments of Traders review is out.
EURO
COT Change (52W) / C – 16%, LS - 12%, SS - 27% /
EURO became first on the list in respect to large changes in Commercials positions… this could mean that prices will rally, but the cot extreme (relative) that is present suggests that prices will continue their fall. It’s not a clear picture…
Cocoa
COT Extreme / Close to All-Time COT extreme levels in C and LS /
The cot extreme that is present in this market is telling us that prices cannot rally for too long anymore. I agree with it.
5-Year Note
COT Extreme / C-293 report, LS – 179 report, SS – 394 report COT extreme /
The extreme is pretty clear, so we are expecting a bottom to develop soon… of course, looking at longer charts (>10 year), we can find even greater extremes, so if prices continued their decline, we shouldn’t be surprised.
I wish all of you good luck to this week’s trading,
All the best,
Dunstan
Hi everyone, first I would like to thank everyone for all the great information I have been taking things one step at a time to grasp as much as I can about forex trading… right now I’m studying in the baby pips school @undergrad level which lead me to this forum about the cot reports… I understand the concept of the reports but is wondering is there a simple way to graph the net percentages to my metatrader chart for analyes each week… without having to pay monthly fees or outrages cost for indicators, software or the like?? If so can you guide me to the instructions of actually graphing the information myself?