Follow the Smart Money / COT Analysis

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Coffee
COT Change (52W) / C – 37%, LS – 39%, SS – 23% /
The dynamic rally we had in the last two weeks generated heavy selling from Commercials, while Large Speculators are once again long. This large change in my opinion shouldn’t be too emphasized, since not long ago we have had a great extreme in the market. The picture to me looks, as if the trend has finally changed and I believe we will be witnessing much higher prices in the next few months.

Cocoa
COT Extreme / LS – All Time COT extreme /
As prices go higher and higher, we can see how bigger the cot extreme becomes. Of course it’s hard to tell when will we reach the top, but it definitely seems to be a market with great potential to the downside.

Live Cattle
COT Extreme / C , LS – All Time COT extreme /
I could simply repeat myself here --> The extreme is so large, that eventually we will find ourselves in a bear market.

COT Analysis – Timing issue
People might say, reading my comments about Cocoa and Live Cattle that it wasn’t too helpful, because the biggest question is still missing an answer --> when??? When will we reach the top? I would like to make it clear… following the cot report week by week, you will not be able to pin point exact turns in the market (I don’t think there are any other tools out there that can do this either). BUT (!) similarly to volcano eruptions, scientists are able to determine that stresses deep in the mountain are rising. In my opinion, this is the way to look at cot analysis, cot extremes too. We should get ready that change will come.

Knowing this information, you may start exiting your long positions in these markets (taking profits) if you have any, you may re-adjust your stops (lowering risks) OR you may gradually start building up short position (obviously keeping in mind, what I have just said and knowing that the extreme may widen even more!).

Options – if available – are great tools in these circumstances (OTM options with low volatility and min. 2-3 month time value), because you have a fix and limited risk, with huge reward potential if and when price do react to these cot signals.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500
COT Change (52W) / C – 44%, LS – 31%, SS – 21% /
The situation is pretty confusing… Prices were unable to decline further, while the extreme was so large. Now we see Traders moving away from their extremes while the market is back to the rally. I’m unable to draw any conclusions from the cot report right now, the only interesting fact is that Small Speculators are the only ones Long now, both Commercials and Large speculators are Short.

Crude Oil
COT Extreme / C, LS – All Time COT extreme /
Large Speculators have built up such large net long positions (while Commercials net short) that we haven’t seen in Crude Oil before… It is an unquestionable bearish cot extreme signal that may take prices down soon.

Coffee
COT Change (52W) / C – 24%, LS – 20%, SS – 22% /
COT Extreme / C – 124 report, LS – 124 report COT extreme /
The very large changes that we have may be able to slow down the rally a bit, but in the medium/longer term the bullish cot extreme that we had not long ago is influencing the market: the trend has changed, we are in a bull market again.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Oil
COT Change (52W) / C – 36%, LS – 40% /
Technically, we are close to an important resistance level, so the large cot change may capable of stopping the rally, BUT (!) let’s not forget that in the medium, longer term cot extreme signals are the real “price movers”. You may see that about a month ago (basically when we’ve reach the bottom), we were close to an all-time cot extreme. If prices are able to continue their rise (judging by the dynamics of price in the last few weeks, I think they’re able to) and we see Large Speculators becoming net long once again, then I think we can be pretty sure that the trend is once again pointing upwards.

Crude Oil
COT Extreme / C, LS – All Time COT extreme /
I can only repeat myself: the extreme is “All Time” large, so we are expecting prices to decline. Important remark: cot all time extreme can exist for many weeks, before price reaction.

Coffee
COT Change (52W) / C – 16%, LS – 17% /
COT Extreme / C – 145 report, LS – 144 report COT extreme /
Enjoy the ride:) --> for all of you, who reacted on the bullish cot extreme signal that we had in the end of last year. You may ask: Ok, great, but how long could this ride last? If we look at the historical charts, tops developed when Commercials were holding more than 40.000 contracts net short (LS, roughly the opposite / this is true since about 2004). Because of the dynamics both in price and in the cot report, I think that we may reach even >60.000 contracts before the rally is exhausted.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100
COT Change (52W) / C – 32%, LS – 32% /
COT Index (3 yr) / C – 1%, LS – 90%, SS – 70% /
The large change in Traders positions is a bearish cot signal that could affect prices in the near term. Not only do we have this larger change, but also a cot extreme that indicates an end for the rally. Of course we should see that for the past 1-1,5 years we have reached these extreme levels multiple times without any major price reaction. I wouldn’t be surprised at all if this extreme could become even much greater when we eventually reach a top.

Coffee
COT Extreme / C – 146 report, LS – 146 report COT extreme /
Nothing special here, the extreme is becoming larger and larger as prices are rising. As I’ve said last week, we should expect a change in the trend once Commercials and Large Speculators reach their bearish all time cot extremes.

Wheat (Minn.)
COT Extreme / C – 111 report, LS – 96 report COT extreme /
Although we’ve reached a cot extreme worth mentioning, on the 5 year chart we can see that there is still space left for the extreme to widen. This relative cot extreme examined in context with traditional TA tools (clearly visible downwards channel) may paint a more bearish picture: so I’m not saying that we need to wait for a much greater cot extreme to see prices decline, the extreme is already large enough that we can think about a short trade.

All the best,
Dunstan

the original COT report

COT charts

[emeraldorc]

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100
COT Change (52W) / C – 32%, LS – 32% /
COT Index (3 yr) / C – 1%, LS – 90%, SS – 70% /
The large change in Traders positions is a bearish cot signal that could affect prices in the near term. Not only do we have this larger change, but also a cot extreme that indicates an end for the rally. Of course we should see that for the past 1-1,5 years we have reached these extreme levels multiple times without any major price reaction. I wouldn’t be surprised at all if this extreme could become even much greater when we eventually reach a top.

Coffee
COT Extreme / C – 146 report, LS – 146 report COT extreme /
Nothing special here, the extreme is becoming larger and larger as prices are rising. As I’ve said last week, we should expect a change in the trend once Commercials and Large Speculators reach their bearish all time cot extremes.

Wheat (Minn.)
COT Extreme / C – 111 report, LS – 96 report COT extreme /
Although we’ve reached a cot extreme worth mentioning, on the 5 year chart we can see that there is still space left for the extreme to widen. This relative cot extreme examined in context with traditional TA tools (clearly visible downwards channel) may paint a more bearish picture: so I’m not saying that we need to wait for a much greater cot extreme to see prices decline, the extreme is already large enough that we can think about a short trade.

All the best,
Dunstan

the original COT report

COT charts

I see you are a COT Base subscriber. I do all my COT analysis on spread sheet and manually input all my Commodity index moves, etc. I am old fashioned.

Do you think COT base really helps?

[Dstan]

I see you are a COT Base subscriber. I do all my COT analysis on spread sheet and manually input all my Commodity index moves, etc. I am old fashioned.

Do you think COT base really helps?

Hi emeraldorc,

I used to manually put cot data into Metastock and then do my cot analysis and I think this could still work if I was only trading a few markets… Since there are more than 50 markets that have cot data, it would take too much of my time to look through each and every one of them to find a good trading opportunity. In this respect, COTbase simply does the hard work for me:)

COT analysis is much faster now that I’m a subscriber and thus it is worth the pennies it costs!

Besides the main feature, cot analysis, I also enjoy the volume and open interest analysis that the service provides!

All the best,
Dunstan

[emeraldorc]

Hi emeraldorc,

I used to manually put cot data into Metastock and then do my cot analysis and I think this could still work if I was only trading a few markets… Since there are more than 50 markets that have cot data, it would take too much of my time to look through each and every one of them to find a good trading opportunity. In this respect, COTbase simply does the hard work for me:)

COT analysis is much faster now that I’m a subscriber and thus it is worth the pennies it costs!

Besides the main feature, cot analysis, I also enjoy the volume and open interest analysis that the service provides!

All the best,
Dunstan

Thanks D. Much appreciated. I am having the same thoughts…

[Dstan]

Thanks D. Much appreciated. I am having the same thoughts…

No problem, my pleasure! If you want to know more about this service, have a look at their videos here (it will give you some thought about the usability and features).

All the best,
Dunstan

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Palladium
COT Change (52W) / C – 33%, LS – 36% /
Looking closer at the chart, we can see that the cot change signals in Palladium were pretty effective. Interestingly, there were more bullish change signals then bearish ones… The change we have now says that prices will fall. If we look at a longer chart, we can see that we have moved away from the bearish cot extreme that was present in the market in 2013. We can of course get there again, but for now, it seems that the extreme is not that large yet to really
end to the rally in Palladium.

Russel-2000
COT Change (52W) / C – 31%, LS – 28%, SS – 30% /
Similarly to Palladium, we can state that cot change signals in Russel-2000 are usable signals. Luckily we’ve got a bit more example for the bearish ones. The cot change signal we’ve got now is a stronger one suggesting a decline in prices. The cot extreme could be larger and if so, it would be a much easier task to decide what to do… If we choose to give it a chance, I’d strongly recommend it with a smaller position size or tighter stops.

Crude Oil
COT Extreme / C, LS – All Time COT extreme /
Last week we have seen some signals that indicate: we may have reached a top… The all time extreme became even greater than before --> stress levels are HUGE in CL.

All the best,
Dunstan

the original COT report

COT charts

[anon5370623]

Crude oil had low but stable volatility today. I am feeling some breakouts are brewing on this commodity…

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Oil
COT Change (52W) / C – 29%, LS – 27%, SS - 37% /
COT Index (3 yr.) / C – 25%, LS – 73%, SS - 72% /
The change was very large and we also have a relatively large cot extreme – both of these bearish signals. An unquestionable bearish cot extreme signal would be the case if commercials were below 100.000 contracts net short / large specs above 80.000 contracts net long, but I believe that this extreme may already be strong enough to influence prices.

Wheat
COT Change (52W) / C – 22%, LS – 19%, SS – 19% /
COT Index (3 yr.) / SS - 100% /
Similarly to Soybean Oil, the cot change and cot extreme signals are bearish. What we can see here is that small speculators are relatively the most optimistic (cot index on a 3 years lookback period). On the other hand, if we look at the rally in 2010 and the one in 2012 (both of them starting after a bullish cot extreme – similar to the one that started the recent rally), and how traders moved their positions, I believe that there could be fuel left in the rally.

Coffee
COT Extreme / C – 159, LS – 159 report COT extreme /
There’s not much I could say here, since the picture is pretty clear: after the bullish cot extreme of last year, prices have finally lifted off and are in a strong rally. The bearish cot extreme is becoming larger very fast which warns us to be careful about further buying… I’m not saying that the rally is over, there’s still much space left for the extreme to become larger, but we should look carefully at the developments in coffee and know when to get off the roller-coaster.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Japanese Yen
COT Change (52W) / C – 46%, LS – 44%, SS - 38% /
The large change (largest change size in the last 52 weeks) may easily push prices a bit lower, but in the medium to longer term, if the bullish cot extreme from last year holds, prices should further rally.

Lumber
COT Extreme / C – 268, LS – 274 report COT extreme /
The cot extreme we have now in Lumber supports the continuation of the rally that is present.

Coffee
COT Extreme / C – 187, LS – 187 report COT extreme /
“The bearish cot extreme is becoming larger very fast which warns us to be careful about further buying… “ After last week’s price actions, it seems that my warning a week ago was meaningful. Although we have space left for the extreme to become larger, the speed of the rally and the widening of the extreme parallel to it makes you cautious. I can’t tell what is go’na happen to Coffer now, because both sides have their reasons… I mean if Bears win, and prices continue last week’s decline, we may start thinking that the rally is over, but if Bulls turn out to be stronger, prices shift back into rally mode, we know that the extreme can get larger, thus we can look at last week’s decline as only a bit of reaction in the market.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100
COT Change (52W) / C – 44%, LS –39%, SS - 12% /
COT change signals – in my experience – were successful signals many times in indexes. The large change in Traders positions in this recent cot report could be again another good signal (bullish of course). The cot extreme of course is pointing in the other direction, so any bullish trades should be taken carefully.

Feeder Cattle
COT Extreme / C – 20, LS – 103, SS - 105 report COT extreme /
The cot extreme is becoming significant, we should start expecting a top soon… on the other hand, this extreme can grow further, volume and open interest scores are supporting the rise.

Wheat
COT Extreme / C - 67, LS – 67 report COT extreme /
Similarly to FC, the extreme is large, but there is no reason to think that prices can’t go further UP --> In the last 5 years, we have had two larger extremes that were capable of ending rallies. I would say that the bullish cot extreme from the end of last year (that started the recent rally) is still in place.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Japanese Yen
COT Change (52W) / C – 25%, LS –23%, SS - 25% /
Both major cot signals, the cot change in the recent report and the cot extreme a few months ago indicate higher prices for the future.

Feeder Cattle
COT Extreme / C – 103, LS – 104, SS - 107 report COT extreme /
While the extreme has grown larger since last week, volume and open interest scores are not that supportive anymore for the rise in prices. We are expecting a top soon…

Wheat
COT Extreme / C - 69, LS – 68 report COT extreme /
If last week’s decline continuous this week, then we may need to assume that we’ve reached a relative bearish cot extreme – similar to the one from the end of last year – which could push prices down, even below 550. Since we are approx. 25.000 contracts away from All Time extreme levels (both for LS and C), it’s not that easy to determine what the case is… is this a relative extreme (if so, prices will most probably fall), or the extreme will become larger in the next few weeks.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100
COT Change (52W) / C – 23%, LS –38%, SS - 36% /
COT Extreme / SS – All Time COT extreme /
The cot change signal (in case of Commercials and Large Speculators only) is bullish, but on the other hand we’ve got the major cot extreme (became all time in SS just now), which is bearish. It’s pretty hard to tell now, whether prices will continue their decline or as they’ve done it many times during the last 5 years, bounce back upwards.

British Pound
COT Extreme / C – 163, LS – 164 report COT extreme /
I think we’ve got a great trading opportunity: The cot extreme signal is clear and visible, while trading wise we’ve reached an important resistance level, where we can easily construct a good risk/reward trade!

Rough Rice
COT Extreme / C - 101, LS – 130 report COT extreme /
On a shorter time frame (let’s say 2-3 years), we may be looking at the market as good shorting opportunity. If we take the time to have a look at a longer time horizon, we can see that actually Traders are far away from their bearish extremes. Of course in the near term, we may witness a bit of a drop in prices, but I don’t think we should expect any major and especially long lasting price falls.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

RBOB Gasoline
COT Change (52W) / C – 25%, LS –32% /
Both the cot change signal now and the level of cot extreme in the market suggest prices should fall. All Traders are getting pretty close to their all time cot extreme (C and LS are approx. 25.000 contracts away).

British Pound
COT Extreme / C – 350, LS – 164 report COT extreme /
The extreme has widened, prices were unable to drastically strengthen, so I think last week’s comments are still valid.

Feeder Cattle
COT Extreme / LS - 108, SS – 109 report COT extreme /
Looking at the charts it’s difficult to believe that prices can go any higher, but if we examine the cot data, we can find that there were larger extremes in the past, we have not reached all time cot extreme levels yet! I’m not saying that prices will definitely go much higher, the picture is pretty obvious, but there’s still space left for all major participants to reach their greatest extremes.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybeans
COT Change (52W) / C – 19%, LS –17% /
The cot change signal is present, although not that large. It is bullish. We haven’t got a significant cot extreme, so there’s not too much supporting information from the cot data this week.

Russel-2000
COT Extreme / C – 94, LS – 94 report COT extreme /
Interestingly, we are starting to see more bullish cot extreme in indexes these days, even though prices are pretty high! This is supporting the continuation of the rally.

RBOB Gasoline
COT Extreme / C – 58, LS - 54, SS – 60 report COT extreme /
The cot extreme is becoming larger week by week. It is of course bearish, but it can become larger than now (just look at the 5 years chart and see for yourself).

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

Although I could not find the newest commitment of traders review on cotbase.com, I’ll update the post anyway with some interesting markets:

Wheat
COT Change (52W) / C – 18%, LS –19% /
COT Extreme / C – 75, LS - 75 report COT extreme /
Both, the cot change signal and the cot extreme indicate that prices may not be able to continue (at least for too long) their current rise. The change in Traders positions was much larger than the average, so already in the near term, I expect a bit of a decline. In the medium term, prices may go up higher, but if you open a 5 years chart, you will see clearly that the extreme is becoming significant, thus we should be cautious with further buying.

Coffee
COT Extreme / C – 195, LS – 193 report COT extreme /
The cot extreme is once again very large in coffee, this time it is of course a bearish cot extreme signal. Will prices top out soon, I can’ tell, but there’s a chance that prices will further rise. If you look at what happened back in 2010 when the cot extreme reached such levels, you can see that price reaction came only months afterwards.

Soybeans
COT Extreme / SS – 200 report COT extreme /
Interestingly, there’s not too much to talk about if we analyze only Commercials and Large Specs activity… but if we take the time to have a look at the smaller players of the market, we will see that they ARE pretty extreme in the market, they are VERY bearish… and we know what that means:) --> bullish signal.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500
COT Change (52W) / C – 25%, LS –17% /
It looks like the rally can continue… The bullish cot change signals accompanied by no real bearish cot extremes paint the picture bullish in indexes.

RBOB Gasoline
COT Change (52W) / C – 22%, LS –25% /
The bullish cot change signal we have in Gasoline may be able to take prices a bit higher in the short term, but if we look at the cot extreme situation, you will see that the chances of further declining prices (after the last two weeks) are higher.

Wheat
COT Extreme / C – 76, LS - 76 report COT extreme /
The cot extreme is getting larger and larger week by week. I do not think that the rally can continue for too long anymore, I’m expecting prices to reach a top soon.

All the best,
Dunstan

the original COT report

COT charts

[Dstan]

Hi everyone,

The latest Commitments of Traders review is out.

Euro
COT Change (52W) / C – 20%, LS –22% /
The last major cot extreme that we has in Euro was the bullish all time cot extreme back in 2012. I believe that it is still in effect and prices are more likely to continue their rise for now. The cot change signal also signals rising prices.

Dow Jones-30
COT Change (52W) / C – 19%, LS – 27%, SS – 22% /
COT Index (3yr.) / C – 75%, LS – 40%, SS – 0% /
It is pretty interesting to see such a cot report at these price levels: we are closer to bullish cot extreme levels than bearish levels!! Ok, the cot change signal is bearish this week, but we know that if it will affect prices, only in the near term. The general picture, at least the one that is painted by the cot report, suggests that prices can rally even further!

Wheat
COT Extreme / LS - 77 report COT extreme /
It seems that my feeling last week was good: we may have reached a top in Wheat. The cot extreme is large enough already, so the chances are a bit larger for declining prices.

All the best,
Dunstan

the original COT report

COT charts