Follow the Smart Money / COT Analysis

Gold

Hi, Dunstan,

ok, i have been going through that website you suggested, and subscribed to wallstreetcourier.com.
i have a question.
the COT report is compiled on Tuesday, and made public on Friday 3:30 EST.
and this is the futures market.
when will it affect the spot market and for how long will it affect ? since on next Tuesday the new contracts will be complied again.
2nd question:
has any one gauged the affect of cot report/ futures fx market affect on spot market. ??

regards
ithnan

dunstan nice thread you have here, am also a COT fan, but trade with it only on extremes,.....
great job, but wheres the lovely eur-fx futures only chart

Hi ithnan,

1st question: COT reports are not made separately for different contract months, CFTC sums up all the contracts. When analyzing the report you just need to look at the continuous charts.

2nd question: The whole thread is about that. If you read through the posts, you will find many examples, where there is a correlation between a COT signal and the price action.

Hi fxcode,

Thanks for the compliment! I have attached a chart on EUR for you!

All the best,
Dunstan

overwhelming evidence for a top.....SP500

Same with AUDUSD

made this one last week.....

Hi everyone,

The latest Commitments of Traders review is out (here).

Dow Jones-30
Vol/OI Total Score /-15/
COT Change (52W) / C-26%, LS-22%, SS-33% /
COT Index (3 year lb.) / C-22%, LS-79% /
Although the Change signal was large and we can see some examples in the past, when prices reacted to it, what is concerning for me on the long side is the volume & open interest score and the COT extreme picture. Both of these are showing a bearish picture.

Australian Dollar
COT Change (52W) / C-19%, LS-17%, SS-25 /
Another example, when the change signal is pointing in the opposite direction as the general picture. Two weeks ago there was a close to All Time extreme COT picture that was a strong sell signal and started to push prices lower. Last week’s COT change signal could stop that decline and even redirect prices to higher levels. It could easily be, that prices continue their rise for a few days, but the fact the LS are heavily exiting their net long positions is a warning signal.

Platinum
COT Extreme / C-All Time, LS-All Time /
The picture has not changed, we could witness another All Time COT extreme this week. Stress levels are super high and this suggest a price decline 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

Platinum

DUNSTAN,

thanks for this. i am a solid fan of COT myself...although i tend to look at it when price has been trending for too long and i think reversal is imminent.

thanks.

Hi Skynet,

It’s always a pleasure to meet other „COT fans”
I can agree with your remark that extremes in the market (usually after long lasting trends as you described it) are generally significant signals that have larger risk/reward potentials.

All the best,
Dunstan

Hi everyone,

(sorry for the late update, I was away for a couple of days…)

The latest Commitments of Traders review is out (here).

Cotton
COT Change (52W) / C-25%, LS-17%, SS-25% /
COT Index (3 year lb.) / C-88%, LS-10% /
The 25% change in Commercials positions could be considered a stronger than average signal and as we can see it by now (Wednesday) prices have declined on it. On the other hand, the wider picture shows an extreme in the market pointing in the opposite direction, upwards.

Heating Oil
COT Change (52W) / C-20%, LS-25% /
COT Extreme /SS-692report/
COT Index (3 year lb.) / C-5%, LS-79%, SS-100% /
A great example of multiple COT signals --> COT change and the extreme are bearish signals. From all the signals this week, I would consider this one to be the best opportunity trade (close resistance level, great Risk/Reward trade).

Platinum
COT Extreme / C-All Time, LS-All Time /
We can see the prices have started to drop heavily, so anyone following these signals could have made some serious profits by now.

I wish all of you good luck to this week’s trading,
All the best,
Dunstan

the original COT report --> here
COT charts --> cf

heating oil + platinum charts

Hi everyone,

The latest Commitments of Traders review is out (here).

Cotton
COT Change (52W) / C-55%, LS-43%, SS-32% /
It looks like I have to mention cotton again, because of the huge change size that happened! This time we can witness a 55% size change in Commercials positions. As the review says, this last two report’s changes pushed Commercials from long 20.000 contracts to short 20.000 contracts. Of course as we know by now, these changes could affect prices in the near term, but the longer term picture is still bullish. If we look at the 10 year chart we can see what happened to prices in the past when Commercials started to decrease their net long positions and go into deep short territories.

Japanese Yen
COT Change (52W) / C-27%, LS-22%, SS-38% /
COT Index (3 year lb.) / C-69%, LS-39%, SS-11% /
Whenever we have witnessed such changes in C-LS-SS positions in the past, they usually ended in a COT extreme that resulted in a bottom in prices. We still got some space left for this trend to continue and really get a COT extreme picture, so prices could continue their decline.

Platinum
After a couple of weeks of continuous All Time signals, market participants in Platinum have moved away from their extremes. As we can see it now, it was wise to follow this market, because it turned out to be again a valid example of how affective COT analysis really is. Looking at the past similar cases, we can expect prices to continue their decline.

I wish all of you good luck to this week’s trading,
All the best,
Dunstan

the original COT report --> here
COT charts --> here

Platinum chart

Hi everyone,

The latest Commitments of Traders review is out (here).

Cotton
COT Change (52W) / C-24%, LS-17%, SS-18% /
It looks like cotton is still on the “radar”. It is important to see the wider picture, the extreme in the market which still indicating a bullish picture. The risk/reward of such a trade could also be favorable now if you look at the chart.

Copper
COT Change (52W) / C-20%, LS-31%, SS-12% /
Large speculators have turned net short. Although the change signal is a bullish one, looking at all metal markets, the cot extreme that we could witness everywhere for the past couple of weeks suggest that the decline will continue.

Japanese Yen
COT Extreme /SS-All Time/
COT Index (3 year lb.) / C-84%, LS-24%, SS-0% /
last week’s comment: Whenever we have witnessed such changes in C-LS-SS positions in the past, they usually ended in a COT extreme that resulted in a bottom in prices. We still got some space left for this trend to continue and really get a COT extreme picture, so prices could continue their decline.
We are getting close /or in case if Small Speculators, we are already there/ the extreme that – as the past examples show- should signal a relative 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).

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 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

Ive just read through the whole thread.
I must say im still a little unsure of how to use it exactly but look forward to learning more.

Nice work Dunstan and well done with quite the followship you have here.

Hi Zac,

It’s nice that you have found my thread and you are interested in the topic! Just let me know if you have any questions!

All the best,
Dunstan