Best Thread Follow the Smart Money / COT Analysis

[Dunstan]

Hi everyone,

The latest Commitments of Traders review was not updated this week, but here’s my weekly snapshot anyway!

Orange Juice
COT Change (52W) / C – 23%, LS – 25, SS – 12% /
Large cot change sell signal from the report. Not surprising seeing the nice rise in prices! BTW, isn’t it a beautiful example of cot extreme signal’s effectiveness?
Anyhow… I think that we can expect a bit of decline in the short term, but I wouldn’t be betting on anything long lasting, since we had this huge cot extreme.

Rough Rice
COT Index (3yrs) / C – 98%, LS – 0%, SS – 17% /
COT Extreme /LS – All Time COT extreme /
The cot extreme is huge (All Time in large specs) so the picture is not that difficult to decode Prices have started to increase two weeks ago and this may easily continue in the next couple of weeks!

Crude Oil
COT Extreme /C – 75, LS – 79 report COT extreme /
The cot extreme is large and probably getting larger week by week. Pinpointing the end of the decline, even with the help of the cot report is not something easy… But hey (!), we shouldn’t forget that not too long ago, we had a bearish all time cot extreme! So what’s happening now is what we were expecting to happen a few months ago…

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Oats
COT Change (52W) / C – 43%, LS – 15, SS – 42% /
The cot change signal is positive, suggesting prices can climb higher in the near future. This is backed by a relative bullish cot extreme (nothing too large, so we are not expecting any major influence from it).

Mexican Peso
COT Extreme /C, LS – All Time COT extreme /
Get ready for a bottom! I know… it looks “scary” , but hey (!), look at how MXP reacted to similar extremes in the past!! It’s not gonna be an easy trade, but is definitely worth it!

Copper
COT Extreme /C, LS – All Time COT extreme /
In the last two years, we had similar extremes a few times. Although prices reacted nicely, they couldn’t stay on the rally for too long. I’m not expecting the situation to be any different this time, so even if prices can climb, I wouldn’t be betting on anything long lasting… Nevertheless, it is a great R/R opportunity!

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Lumber
COT Change (52W) / C – 29%, LS – 31, SS – 15% /
Although the cot change signal is negative (bearish), looking at the longer charts we can see that we are actually not far away (in time and in net contracts also) from significant bullish cot extreme levels. Conclusion: we may expect declining prices short term, but the medium/longer term picture seems to be bullish.

Mexican Peso
COT Extreme /C, LS – All Time COT extreme /
The all time cot extreme has widened more as prices are declining further. Catching the bottom is not easy, but it is pretty obvious that it’s going to happen!

Natural Gas
COT Extreme /C - 191, LS – 191 report COT extreme /
Bullish cot extreme in Natural Gas. We had such extremes a few weeks ago and prices has reacted to it. Now we see prices declining again parallel to the growing stress level in the market. Normal. We may see even greater extremes in the near future!

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500
COT Change (52W) / C – 36%, LS – 34, SS – 18% /
We are witnessing a very large change in the cot report (bearish signal) pushing us towards bearish cot extreme levels. I’m not saying that “the time has come”… but we do know that if we eventually reach the end of this bull trend, we should be seeing bearish cot extreme signals.

Mexican Peso
COT Extreme /C, LS – All Time COT extreme /
It seem that as the extreme widened further, prices have managed to “stabilize”… is it a good opportunity to enter? One thing is for sure… the all time cot extreme: it is telling us that prices will stop their decline soon.

Lean Hogs
COT Extreme /C - 48, LS – 76 report COT extreme /
Let this be an example for situations when the cot analysis is not giving us clear signals. This is a fine example when you should say to yourself: “ok, let’s look at another market”

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

Happy and profitable New Year to All of You!!

The latest Commitments of Traders review is out.

Dow Jones-30
COT Change (52W) / C – 17%, LS – 18% /
We have a larger change in Traders positions than average, but nothing too unusual. It is bearish. The cot extreme signal is also bearish, especially in Small Specs positions. How to react on such signals? Cautiously If you have been following cot signals in indexes, by now you should see that cot analysis is not necessarily as helpful as in other, more “traditional” futures markets.

Copper
COT Extreme /LS – All Time COT extreme /
The All Time cot extreme signal (bullish) is an unquestionably very significant signal here that we should take seriously. I’m not saying that jumping in right away with huge positions is the “good answer”, but we can start preparing for a nice trade. Caution: if you look at the previous bullish extremes, you can find that the rallies following were “short living”. This doesn’t mean that the next rally has to be the same, I’m just saying that when we assume the potential R/R for the trade, let’s not forget about this.

Mexican Peso
COT Extreme /C, LS – All Time COT extreme /
Further widening of the cot extreme while prices could not gain any real momentum upwards… the potential for further weaker prices is still in place. If so, we will be witnessing even greater extremes OR (!) the rare situation that we call “commercial capitulation”. If that happens, “Hell’s Gates open” and we will see a huge decline, something similar that we had in Japanese Yen back in the end of 2012. In any case, we can expect “something serious” to happen --> long straddles? maybe

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

COTbase did not update their site with the latest Commitments of Traders review, but anyhow, I will show you some interesting markets that you may want to analyze closer.

Soybean Meal
COT Change (52W) / C – 27%, LS – 15%, SS – 27% /
We are moving away from bearish cot extreme levels, plus we have a strengthening USD environment, so let’s not be surprised that Soybean Meal is falling and we are getting such large changes in Traders positions. This can of course influence prices in the near term and push prices a bit higher/ slow down the fall of prices.

Rough Rice
COT Extreme /LS – All Time COT extreme /
We have had this kind of extreme in the cot report for some time now with any serious, longer lasting effect on prices, so I would warn you to be cautious with this market… but it is true: we have got an unquestionable large bullish cot signal.

USD Index
COT Extreme /C, LS – All Time COT extreme /
I know the world is in panic mode and it’s hard to believe in such circumstances that the trend can end… but they usually do at some point in time. The cot report shows us how unbelievably large the stress levels have become, so we should be very cautious with our expectations of much higher USD prices.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Sorry, I forgot the charts...

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Swiss Franc
COT Change (52W) / C – 40%, LS – 40%, SS - 36% /
Are we surprised? We shouldn’t be… So we have a huge cot change signal, bearish one. I’d say it may not be the best time to act on it

USD Index
COT Extreme /C, LS, SS – All Time COT extreme /
Although we have the largest cot extreme in USD Index history, due to its special nature, I’d have to repeat what I said for CHF, we have to be careful. I would not be surprised at all to see even greater extremes and parallel much higher prices. I’m not saying it will happen, I’m just warning you, it can happen.

Rough Rice
COT Extreme /C, LS – All Time COT extreme /
Waiting for the market to react to this signal. We have had this extreme present for many months now… are we going to have to wait even more? Maybe, but one thing is clear: we will eventually reach a bottom and see this all time cot extreme signal take it’s effect.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Cocoa
COT Change (52W) / C – 41%, LS – 36%, SS - 49% /
The two main cot signals pointing in opposite direction. On one hand, we have a pretty large change in Traders positions, suggesting a move upwards… in the near term it may easily happen, but if we look at the wider picture, we can see that not too long ago, we has a major bearish cot extreme signal. I believe it is still active and we should be expecting lower prices to come.

Soybeans
COT Extreme /LS - 434 report COT extreme /
The cot extreme is once again widening as prices have started to decline. The big question of course is whether or not the support level close to 900 will hold. If prices are unable to penetrate the level, I would say that the recent cot extreme signal will dominate and we should expect the rally to continue.

Silver
COT Extreme /C – 225, LS - 361 report COT extreme /
Such a large cot extreme at so low prices… interesting. It definitely underlines that we shouldn’t be expecting higher prices any time soon…

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out. (sorry for being late a bit)

Dow Jones-30
COT Change (52W) / C – 33%, LS – 31% /
COT Extreme /SS – All Time COT extreme /
Both of our main cot signals are pointing downwards… we have a bearish cot change signal (larger changes in Traders positions) and an all time cot extreme in Small Speculators positions (SS have never been so optimistic about this market).

Heating Oil
COT Extreme /LS – All Time COT extreme /
We, who use cot analysis in our trading just love these situations! The picture is so clear that it is hard add to it anything… Stress levels in Heating Oil have once again reached all time levels, thus we can expect an ending to this decline (and judging from last week’s performance, we it may already be the case (?)).

Natural Gas
COT Extreme /C – 200, LS - 200 report COT extreme /
We may not have such an obvious case as in Heating Oil, but there is no question about the extreme present in this market. We may just need to be a bit more careful here and take into consideration the possibility of further increase in the cot extreme, which of course would most probably come together with further declining prices.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal
COT Change (52W) / C – 27%, LS – 22% /
The cot change signal is bullish and so is the cot extreme signal. Although we cannot talk about a very large cot extreme, we can see that in the past 2-3 years these relative extremes were good at signaling changes in the market.

Heating Oil
COT Extreme /LS – All Time COT extreme /
After witnessing a >20% increase in prices in the last 2 weeks it is becoming clear that our beautiful cot extreme signal is effective again!

Copper
COT Extreme /LS – All Time COT extreme /
What a beautiful cot extreme, isn’t it? There’s not much that I can add here… the picture says it all…

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100
COT Change (52W) / C – 23%, LS – 37%, SS – 31% /
Mainly the cot change signal that can help us this week: LS increasing their net long positions, C their net short positions rapidly. We can only talk about a larger cot extreme in case of SS, who are pretty optimistic about the market right now.

Japanese Yen
COT Extreme /LS – 117 report COT extreme /
The 117 report extreme we have in LS positions can be considered a relative bearish extreme, but if we look at the wider horizon here, you can see that the cot picture is rather bullish.

Lean Hogs
COT Extreme /C, LS – 92 report COT extreme /
On a longer chart it is clearly visible that we are not that close to all time bullish extreme levels yet in the report, but still, the level of extreme we have is reasonably large. We should be watching this market in the next couple of weeks, months, I think there is great potential here.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500
COT Change (52W) / C – 30%, LS – 32% /
No extreme and a bullish cot change signal = the rally can continue

Japanese Yen
COT Extreme /LS – 118 report COT extreme /
Not much has happened since last week. The extreme is reasonably bearish on the last 2-3 years interval, but unquestionably bullish on a longer time horizon.

Oats
COT Extreme /C – 249, LS – 107 report COT extreme /
Now here we got a good signal! Just look at the chart and you’ll see Commercials are long, SS and LS are short --> that is an unquestionable bullish extreme!

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Oil
COT Change (52W) / C – 30%, LS – 32% /
Not a market that I suggest to you now… Reasons: COT Change signal coming a bit late (prices have already dropped since the report date (last week Tuesday)) and the cot extreme situation isn’t that clear either… Of course if any of you have different view, my ears are open

Lumber
COT Extreme /C – All Time, LS – 1247 report COT extreme /
Now here’s a “WOW Situation” All market players are at their extremes, we have a good track record of successful cot extreme signals from the past… any questions?

Orange Juice
COT Extreme /C – 601, LS – 596 report COT extreme /
I could only repeat what I just wrote for Lumber!! We have a similarly bullish picture here as well!

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Dow Jones-30
COT Change (52W) / C – 24%, LS – 22% /
The larger changes in Traders positions suggests that we should see a bit of a prices rise in the next few days… We’ll see. We do not have a mentionable cot extreme, so that’s all we can gather from cot data this week.

Australian Dollar
COT Extreme /C, LS, SS – All Time COT extreme /
Does it get any better than All Time cot extreme in all three major Market Players positions? I don’t think so… It is a clear and unquestionable bullish cot extreme situation. We are expecting prices to bottom out soon, but (!) let’s not forget that these extreme may be present in a market for many weeks or even months before we see a reaction from price.

Rough Rice
COT Extreme /C, LS – All Time COT extreme /
Another huge signal, but maybe not as “easy” as in case of AUD… If you look at the chart, we have had similar level of extreme for quite some time now and without any reasonable reaction from price. I’d say we can position ourselves accordingly, but with greater caution knowing the history of Rough Rice.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal
COT Change (52W) / C – 33%, LS – 22%, SS – 26% /
Both cot signals point upwards: we have a larger change in Trader’s positions plus a relative bullish cot extreme. I wouldn’t say that this is the best trading opportunity, but for any of you, who trade this market, the cot data seems to be indicating a positive picture.

Rough Rice
COT Extreme / LS – All Time COT extreme /
Last week I said it is not too easy to determine rough rice’s move, because we have had such stress levels in the market for quite some time now without any major price reaction. After many weeks of declines, last week was very strong. Have we reached the bottom? It’s hard to tell, but the bullish cot extreme signal is still present, that is for sure.

Orange Juice
COT Extreme /C – 606, LS – 601 report COT extreme /
What a beautiful signal in one of my favorite markets It’s hard to say much about it, the charts tell us a very clear “story”. OJ has many time reacted nicely to cot extreme signals, thus I have great confidence that it will once again do so.

All the best,
Dunstan

COT Charts

 

[Snowking]

Hi Dunstan, very interesting series. Keep it up.

Oil is perhaps the most topical commodity at the moment and I note you haven't give it much mention since last year when you noted a turn might be coming. What does your COT analysis tell you for Brent and wti?

Have you (or others reading) given much thought to put/call ratios as that's a similar logical train of thought?

Regards

 

[Dunstan]

Hi Dunstan, very interesting series. Keep it up.

Oil is perhaps the most topical commodity at the moment and I note you haven't give it much mention since last year when you noted a turn might be coming. What does your COT analysis tell you for Brent and wti?

Have you (or others reading) given much thought to put/call ratios as that's a similar logical train of thought?

Regards

Hi Snowking,

Sorry that I'm replying so late, but I went out for a longer Easter holiday

I'm very glad that you like my thread, it's always nice to hear that

Here's my view on oil now. Small specs are the most extreme at the moment (95 report), they are heavily bearish, compared to their historical positioning. This is actually a really nice bullish signal, but it would be much nicer to see C and LS also being so extreme. They are relatively bullish, if we look at the last two years, but going further back in time, we can find even greater extremes.

The picture is clearly bullish though, I cannot disaggree with that!

put/call ratios: absolutely!! Not the topic of this thread, but truly a very useful - and as you correctly stated - and similar tool to cot analysis.

All the best,
Dunstan

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal
COT Change (52W) / C – 26%, LS – 19%, SS – 15% /
In my last post, I’ve wrote that we have a relatively good buying opportunity – nothing special, but it’s there. Things have not changed so far, we still see the cot report supporting a bullish move in this market.

Lean Hogs
COT Extreme / C – 149, LS – 150 report COT extreme /
The cot extreme is very well “seeable” , so I needn’t explain too much… As you can see, the last few weeks we could witness a bit of a rise in prices which brings us to the question: is the decline over already? Of course I can’t tell, but judging from the past reactions from Lean Hogs to these large extremes, we can expect prices to develop a bottom soon.

Cocoa
COT Extreme /C – 103, LS – 103 report COT extreme /
Relative bullish cot extreme signal. Ok, we don’t have a beautiful, all time cot extreme, but as you can see from even recent examples, these signals could also be helpful to us. I’d say that the report is telling us: “Up”.

All the best,
Dunstan

COT Charts

 

[Dunstan]

Hi everyone,

The latest Commitments of Traders review is out.

Silver
COT Change (52W) / C – 19%, LS – 19% /
Only the bullish cot change signal could be of help right now, since we do not have an extreme to talk about… I’d leave silver aside for now.

Wheat (Kansas)
COT Extreme / C, LS – All Time COT extreme /
The signal here is clear and visible… luckily we have “good” history --> such cot extreme signals were pretty much effective all the time in the past, so we can expect prices to bottom out soon.

Rough Rice
COT Extreme / C, LS – All Time COT extreme /
Contrary to Wheat, the situation is not that easy here… We have had bullish extremes for quite some time now, but without any reasonable reaction from price. If you wanted to enter long in grains, I’d rather choose Wheat instead!

All the best,
Dunstan

COT Charts