COT: The precious data ignored

Orange juice



Orange juice analysis for the current week (even though i doubt anyone trades it). This first chart shows the open longs & shorts positions from both producers and money managers (managed funds).

In the producer's view (producers red and blue line), open long have been on steady fall for the past months (from above 60% to near 20%) while open shorts haven't really increased them. So what ? Consumers buyers hedge longs, they are going away for now. Producers are not increasing their short bet, they don't bet on any big fall. Positionning for consumers/users is weak.
In the money manager's view (man.money yellow and green line), open longs are near dead to flat (max 6/7%). Open shorts are above 40% of open interests which is high.
We can expect any fall would bring money managers more shorts, and producers/users will hedge.
Users are not hedging big, they could expect more downside. Money managers are strongly bearish, a bounce could be expected before a new season of downside.



This second chart shows the spread between longs & shorts money managers, and spread between longs & shorts producers.
Both are very important, producers are top/bottom finders, while money managers are trend followers and very wrong at top/bottom.
At the present day, producers are around 5%, such a weak hedge for prices that low, are they expecting more downside?
Money managers have been very short for the the past year, everytime we hit near/below -40% we saw a bounce before selling pressure (from producers) renewed.



This next chart show the spread between the positions of the producers versus the money managers.
Spread has been positive for the past year meaning operators (producers) have been eyeing a rise
At this level, operators could expect a bounce before more selling appear. Its a tricky area



As prices are falling, indicator is not going the same way, its holding strong near 40%, with prices lower than a few weeks ago with indicator higher (and holding).
Shall we see the bounce confirmed by the smart money?

Brazilian real



Brazilian analysis for this current week. This first chart shows the open longs & shorts positions from both dealers and money managers (leverage funds).

In the dealers's view (dealers orange and blue line), open shorts are near 0% and have been this way for long, spiking up sometimes. For now longs are in charge even with this current BRL fall
In the money manager's view (lev.money yellow and green line), open longs have decreased a lot in the past few months while open shorts have jumped. If money managers go more short, it could be the end of this BRL fall.



This second chart shows the spread between longs & shorts money managers, spread between longs & shorts dealers and spread between longs & shorts asset managers.
I want to mention the chart represents USDBRL, (almost inverse to BRL)
At the present day, dealers are still very loaded with BRL longs. Its a bit lighten than previous week but nothing worrisome
Money managers are still net sellers, not so strong though, nothing interesting for me



This following charts represents the spread between the dealers and money managers. Spread is positive. Dealers are strongly BRL buyers



This following charts represents the spread between the asset managers and money managers. Spread is very negative, but decreasing a bit. it would be interesting to see the spread rising more if prices fall.



This following charts represents the spread between the asset managers and dealers. Spread is near flat. Money managers haven't been of a clue for the price of BRL



As price is rising, indicator as well. All in sync so far. Only worry is it near 70%, a level where it can potentially fall, but historically we haven't seen any dip fall. We would need to wait for bearish divergences

South African Rand



South african rand currency analysis for this current week. This first chart shows the open longs & shorts positions from both dealers and money managers (leverage funds).

In the dealers's view (dealers orange and blue line), open longs have been decreasing over and over since mid 2019. On the opposite open shorts surged lately from 0% to 45%. Lots of dealers went short heavily lately. Something to consider if you are long ZAR (or short USDZAR)
In the money manager's view (lev.money yellow and green line), open longs and shorts have been very volatile, going up and down all year long (2019). It looked an unstable currency. Lately shorts increased a bit, while open longs decreased below 10%. They have increased bearish bets.



This second chart shows the spread between longs & shorts money managers, spread between longs & shorts dealers and spread between longs & shorts asset managers.
I want to mention the chart represents USDZAZ, (almost inverse to ZAR)
At the present day, dealers are still very loaded with BRL shorts, as much as the beginning of 2019 year.
Money managers are still net sellers, and increasing their short bets.
Asset managers (green) have been playing the opposite side of money managers. We'll see how it works, analysing their spread between each others.



This following charts represents the spread between the dealers and money managers. Spread is positive. Dealers is negative, but increasing towards 0.
It means they are still eyeing the downside, but as it goes down they are clearing their shorts and could turn bullish within a few weeks.



This following charts represents the spread between the asset managers and dealers. Spread is very negative, and increasing deeper into negative meaning short bets are being increased. Watch out



This following charts represents the spread between the asset managers and money managers. Spread is very deep into negative territory (-100%). Smart money is very loaded on the short side.



As price is rising, indicator is rising as well. Indicator seems to follow up what operators are doing, aka selling ZAR (buying USDZAR if you believe in USD rise in the meantime)

Corn



Corn analysis for the current week. This first chart shows the open longs & shorts positions from both producers and money managers (managed funds).

In the producer's view (producers red and blue line), open short have been a reduced but producers are still hedging a lot. Open longs on the opposite have been reduced every weeks for the past 3 months. Something to consider. Open longs are reduced, while open shorts stay high (recently increased).
In the money manager's view (man.money yellow and green line), open shorts are slightly higher than open longs, both look to converge towards each other. Cross soon?



This second chart shows the spread between longs & shorts money managers, and spread between longs & shorts producers.
Both are very important, producers are top/bottom finders, while money managers are trend followers and very wrong at top/bottom.
At the present day, producers are shorts, and increasing their net bets as prices rise
Money managers are more or less flat, but still shorts overall.
Both are shorts and that's something i like to see. I'd wait for for the money managers to go longs before i take shorts. Their net shorts is weak though.
Corn should be monitored the next weeks.



This next chart show the spread between the positions of the producers versus the money managers.
Spread has been negative for the past few months. But nothing very strong for the sellers. Important to notice producers are hedging more shorts than before with price lower...watch out.



No much to see technically, indicator is approaching the 60-65% mark. We'll need to reevaluate soon. Lets make for the operators to have a stronger bias before jumping in

Here is a chart of gold from 2016 to 2020 (jan 2020)



Its based on the relation with the spread between producers and money managers.
Chart says it all, but whenever the price is near a bottom, spread should increase, meaning producers are reducing their short bet (or increase their long bet depending on the producers net position) while money managers are doing the opposite.
Historically it worked well, especially during 2012 when producers reduced their long bet, to add it strongly back in 2015.
Right now the spread is very high, what i don't like is the spread is high on top of a move not near a bottom. Something to watch out.
I wouldn't fade it, but watch out for a potential correction here as spread decrease over the next few weeks (to increase lower)

EDIT : sorry for the previous post deleted. My excel went wrong. There were still valid to my eyes, but the datas didn't mean what it should have meant.
Thanks to MoshiM for spotting the error

Latest market sentiment



Equities and vix still on the "watch out" list

How accurate is it?

Using it well, with the right money management, and patience, you can get easily more than 80%.
Trade commodities with ETF, no leverage, you can get 100% i can tell you.

But its my view, we all differ

Euro bouncing, can it last?


This is a chart of EURUSD from 2019 until today.

From the current positionning, what can we see?

Open longs from dealers are just sleeping, they woke at the beginning of 2019 during the bounce. Since then they tried to wake up without success, too tired.
Open shorts from dealers have been quite volatile, but still high overall, and have been rising for the past weeks as euro is rising.
From a dealers's perspective, euro shall go down, until longs take over.

Open longs from the money managers have been the same as open longs from dealers, sleeping mode. The most interesting part are the open shorts from them.
They are outpacing open shorts from dealers. The last 2 times it happened we had seen bounces up, but price were down (at bottom).
What is annoying now is that it's happening while price is on top of a move.

We'll have interesting days ahead, euro seems to be a turning point.

We need a clearer view from both dealers and money managers before taking a strong bias.

On a side note, and not mentionned on the chart. Its very hard to be a strong bull while the asset managers open short at below their 2019 lows and open longs at their 2019 highs. They are very bullish

What about GBP ?


GBPUSD chart from jan 2019 to jan 2020

Open longs from dealers are near 0%, down from 60%. They removed all their long positions. While shorts are increasing slowly and steady.
Having a look at the asset managers, open longs are being increased slowly and steady as well, near the 2019 high.
I wouldn't buy based on that. Shorting rallies is still the way to go so far with asset managers buying strongly and dealers selling

10 years of sugar


Sugar price with the spread of producers with money managers since may 2010

It shows the strength of the producers vers the money managers. Any deep negative spread is showing producers are very short compared to money managers. The opposite works.
Recently, spread went from positive to negative (but very tiny) is saying market is turning lower. Its time to get out of longs. So far its a weak short but can turn into strong one. Only time will tell

Natural gas since 2009


Chart of natural gas since sept 2009 versus swap dealers

Something to consider looking at swap dealers if they can be totally wrong and totally right.
Totally right when prices are going down, hitting bottom while they increase their long bet a lot.
Totally wrong when prices are going up, hitting top, while they increase their long bet a lot.

Swap dealers can increase their positions drastically. Above 10/15% (%open longs - %open shorts), prices tend to rise (expection during 2009/2011 it seems, but it can be filtered out with producers/money managers). Below 5% of open positions, prices tend to fall.

What's next for platinium ?


Chart since the beginning of 2019 until today.

Platinium seems to have broken out higher. Will it last ? or its just a glitch higher ?

From a COT perspective, it seems there are not a lot of space left for more upside. We are reaching extreme positions from all categories.
I didn't say we'd reverse all, but a correction is imminent

Lets examine what traders have been doing lately, and recently.
From a producer's view, open longs have been very low for the past year. Platinium is a bear market, producers are just hedging shorts as we go higher, closing them as we go down, nothing more. Whenever we saw longs waking up, we have some very good bounce (with more or less a drawdown depending on the timing).
Open shorts on the opposite are very active. They just increase their short hedge as prices rise. For the past year, near 50% of open shorts dragged the price down. Below 20% and price rose back up.
Right now we are just under 50%, will history repeats itself ? is 50% of shorts too much?

From the money manager's view, both longs and shorts are very active. They are wrong on top/bottom, they always increase too many longs on tops, too many shorts on bottoms.
Looking at the open longs first, they often have been above 40%, topping 60% where we had big reversal of prices. We are above 50% now, they are increasing it a lot and quickly, watch out.
Open shorts are lower than 2019 lows, they are non existant, meaning barely no money managers believe in a fall in prices.

Risky to long natural gas?


Chart of natural gas since mid 2009 with open positions.

When we look at the open positions, a few things need to be watched out.
First point, the positions of the producers, still short on bottom. Are they expecting more downside? or they are totally wrong? Usually producers increase (hedge shorts) their short as natural gas prices go up. If they increase while its going down, something's odd.
Second point, open longs of producers keep decreasing (same for shorts). As long as we don't see any increase in open longs from producers, price is unlikely to rise.
Third, money managers are increasing their short bet, they are wrong on extreme level. Are we reaching extreme level? Its hitting the 30%, which looks critical.
If we look closely, we reached 30% level back in 2009/2010 but producers/consumers open longs kept decreasing, they weren't seeing any increase yet.
To sum it up, producers aren't seeing any increase yet, while money managers are increasing their short bets as we go down (with open longs bottoming).
The fall should continue, until producers agree with the extreme level of shorts from money managers

Daily market sentiment



Again equities and vix are overcrowded, they want a correction that didn't happen yet

Fall will continue for the EURO ?


This chart above represents the open longs and shorts positions for the most important category of traders.
From a dealer's view, open longs are near the lows, and looking at it historically (when looking at history from 10 years ago) longs dealers have been bad a trading EURO. Everytime they increased their longs, it dropped for a few sesssions (days to weeks). Not worth looking at them.
Open shorts on the contrary have been a good indication of a drop or a bounce, depending on its level and where the EUR stands.
Lately they rose their open shorts near 40% which can be viewed as a good indication of prices still dropping within the next sessions.

From the assets manager's view, the only thing they do is increasing longs whenever prices drop or rise. They only buy.
Reaching above 80% is clearly too much, but they can keep buying as much as they want. I wouldn't give too much credits for their buys.
Their open shorts have been up and down for months now. They are on the lower side now, where prices fell before.

From a leverage funds view, their open longs are pretty much dead, they haven't been buying much EUROS. But their open shorts is much volatile. They are at a level of extreme for the past 3 years, where EURO rallied to 1,25.
We will monitor their open shorts.


This chart above represents the spread long/short from the dealers.
Not much to say, anytime the spread is going deep into negative, it means dealers are selling more and selling, hence prices fall.
Right now its going deeper, without prices to go higher. They short more at lower prices. Another thing to monitor.


In this chart, Asset managers keep loading net longs. But whenever they increase too much, price falls. Right now they are buying too much


This following charts speaks for itself. Whenever dealers sells more than Asset managers do, its going down. Right now this level is very low, but prices as well.
We'll have interesting days ahead


A daily bearish divergence brought the prices down. The past few sessions haven't said anything.
Selling rallies remain

Sugar on the finish line ?

Sugar long/short matrix

This chart above represent the sugar market alongside with market participants.

I won't deep into explanations. Whenever the 4 charts print "extreme" level, all in sync, then its a potential for a good signal.

But past is the past. So lets have a look at today. Only the first chart is not giving us extreme level like the ones before.
Patient people won't buy anymore sugar, will wait for extreme level, and go short (either for correction or retrace, no one knows). Other will start selling rallies
Which one are you?

An idea of what to do with coffee

Coffee long/Short matrix


Coffee is bear market and has been for years. Hence short trades give better signals.

To remind some of you, COT report WILL NEVER GIVE PERFECT SIGNAL ALONE. Its a mix of it, add price action/levels/indicators (whatever works), a good money management and a working brain.

More to come...

Range for gold ?


This chart above represents the open positions from producers and money managers.
What it tells us? Open longs from money managers are increasing near their highest level in 3 years. Ope shorts on the opposite are near their lows. They rose each time price fell. So at this point, a fall is possible for both open longs and shorts to clear some trades.
Producers are not really increasing their open shorts, same levels as past months and below their 3 years high. Producer's open longs are irrelevant. Its a dangerous game for them to increase longs at top, dip coming ?


This current chart represents spread of open long and short from producers.
Whenever spread is very low, it means shorts are way stronger than longs. They are hedging more. But haven't been hedging more a price goes up


his current chart represents spread of open long and short from money managers
Whenever spread is very high, it means longs are way stronger than shorts. They increase longs as price rises, they are trend followers. Is trend coming to a temporary end ? they don't increase their longs as prices go up.


Chart above ays it all

Gold long/short matrix

It shows an overstretching of positions, saying a dip could happen anytime now.



Chart is clearly in upside, indicator is not saying anything for any clear move.
Based on this, i'll take some risky shorts as we go up.
A dip would be a good chance to own gold cheaper as long as producers/money managers don't reverse all their trades.

A bit of coin


This chart above represents the open positions from funds and other reportable traders (not big but big enough to trade bitcoin)
What it tells us? To prevent a messy explanation, i'll focus on the open long from the money managers. They have trouble taking the right direction. Increasing too much too top, decreasing on bottom. That's what we play. Lately they keep increasing a prices go up, time to clear the bitcoin long side (probably why we spiked then went down 500 dollars)


This current chart represents spread of open long and short from money managers.



This current chart represents spread of open long and short from other reportable traders.

Bitcoin long/short matrix

Pattern is clear there. I won't explain it. To sum it up, bitcoin is overloaded. It could correct down for the next few weeks. Any rallies will be used to sell into it for the moment.



Chart is clearly in upside mode, indicator is above 70, highest reading over the past few months. Hence a retrace could happen from there.