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  • #161
  • Nov 4, 2012 10:07pm Nov 4, 2012 10:07pm
Quoting mypipbull
It doesn't work by looking at Net Positioning alone. Probably best to look at the below link for clarification (compliments of Ja)
http://cotbase.com/on-cot/typical-setups

BTW - Your bias is always in the way!!
I just looked at the link and with the oats example they were looking at the net position of the comms.
  • #162
  • Nov 4, 2012 11:31pm Nov 4, 2012 11:31pm
Quoting stewrigh
I just looked at the link and with the oats example they were looking at the net position of the comms.
Key point missed on the Oats example as they mentioned:

Their dynamic repositioning often leads to major or interim market tops/bottoms.
  • #163
  • Nov 5, 2012 1:02am Nov 5, 2012 1:02am
Quoting mypipbull
Key point missed on the Oats example as they mentioned:

Their dynamic repositioning often leads to major or interim market tops/bottoms.
Think I'm missing something here - I read that to mean that the switch of the Comms from net long to net short was a signal that we were at or approaching a market top.
  • #164
  • Nov 5, 2012 3:00am Nov 5, 2012 3:00am
Quoting stewrigh
Think I'm missing something here - I read that to mean that the switch of the Comms from net long to net short was a signal that we were at or approaching a market top.
It's actually the opposite.

See chart below:

Point 1 - Shows the Comms building a Net Short Position
Point 2 - Shows the Large Specs/Funds/Non Commercials building a Net Long Position

This typically happens simultaneously as they take the opposite side of each other trades. The Comms are typically hedging against their physicals while the Large Traders (Funds) are in it purely for profit. The Funds must close positions out for either profit or loss.

When the Comms stop taking the other side of the trade, the Funds are forced to liquidate their speculative positions which in this example formed a top.

Point 3 - Shows the Comms closing their short positions they had build up.
Point 4 - Shows the Funds closing the long positions they built up.

This is when price falls as shown.

If we look a bit deeper at the changes in Net Positioning (look at the longs vs shorts of the Comms and Funds) with Point 3 & 4 you would most likely see the following::

The Comms are exiting their current Shorts and probably opening new Longs (This is the repositioning they mention) that they expect to offload to the Funds later when the downtrend ends and a new uptrend begins.

The Funds are exiting current Longs and probably starting to open new Shorts (Comms taking this side) as they know the uptrend is over and want to profit from the fall in price.

And round and round we go.....

Hope this helps, it is a bit confusing but nothing a few years worth of reading and studying won't fix
Attached Image (click to enlarge)
Click to Enlarge Name: OatsCOT.png Size: 224 KB
  • #165
  • Nov 5, 2012 3:28am Nov 5, 2012 3:28am
Quoting mypipbull
It's actually the opposite.

See chart below:

Point 1 - Shows the Comms building a Net Short Position
Point 2 - Shows the Large Specs/Funds/Non Commercials building a Net Long Position

This typically happens simultaneously as they take the opposite side of each other trades. The Comms are typically hedging against their physicals while the Large Traders (Funds) are in it purely for profit. The Funds must close positions out for either profit or loss.

When the Comms stop taking the other side of the trade, the Funds are forced to liquidate...
Great - thanks Mike.
  • #166
  • Nov 5, 2012 4:53am Nov 5, 2012 4:53am
Quoting mypipbull
It's actually the opposite.

See chart below:

Point 1 - Shows the Comms building a Net Short Position
Point 2 - Shows the Large Specs/Funds/Non Commercials building a Net Long Position

This typically happens simultaneously as they take the opposite side of each other trades. The Comms are typically hedging against their physicals while the Large Traders (Funds) are in it purely for profit. The Funds must close positions out for either profit or loss.

When the Comms stop taking the other side of the trade, the Funds are forced to liquidate...
Ok, Think I'm getting it.

Using the Oats example - If I imagine I am a large comm farmer and I want to get the best price for my oats.

So I sell my future harvest for delivery in say 3 months, but I build that short contract over time so I am pound cost averaging the sale while price is going up until I have a large net short position.

Now when the harvest is in and all the Oats have been sold and the contracts settled I need to go into the market to buy oats so I flip and start to buy contracts to replenish my inventory while price is low.

I can then sell those contracts against future havests ' and round we go again'.

Think I understand why a large net short/long position is not in and of itself a signal - we have to look at the history.

Is that sorta how it works.
  • #167
  • Nov 5, 2012 6:50am Nov 5, 2012 6:50am
Not sure how that works for silver tho.

If you own silver - why would you hedge it and push the value of your holdings down.

Unless you were JPM of course.
  • #168
  • Nov 5, 2012 6:16pm Nov 5, 2012 6:16pm
Quoting stewrigh
Is that sorta how it works.
I'm no expert but that seems to be the gist of it.

Re: Silver, I don't think too much about it. It's the concept that plays out and works, that's all I care about.

I know the basics of Futures but at the end of the day I don't care WHY it works I only care that it DOES.

Just look at Silver......the pattern is playing out over and over again......does it really matter why? Not to me it doesn't......

For deeper understanding get books by the following:

Larry Williams
Floyd Upperman
Steve Briese

I cannot explain it any further....I'm exhausted
Attached Image (click to enlarge)
Click to Enlarge Name: SilverCOT.png Size: 46 KB
  • #169
  • Nov 5, 2012 10:59pm Nov 5, 2012 10:59pm
Quoting mypipbull
I'm no expert but that seems to be the gist of it.

Re: Silver, I don't think too much about it. It's the concept that plays out and works, that's all I care about.

I know the basics of Futures but at the end of the day I don't care WHY it works I only care that it DOES.

Just look at Silver......the pattern is playing out over and over again......does it really matter why? Not to me it doesn't......

For deeper understanding get books by the following:

Larry Williams
Floyd Upperman
Steve Briese

I cannot explain it any further....[color=Red]I'm...
I'm exhausted

Me too - another one of my hangups - I like to understand how and why things work lol - Thanks again Mike.
  • #170
  • Nov 6, 2012 1:33am Nov 6, 2012 1:33am
Quoting mypipbull
I'm no expert but that seems to be the gist of it.

Re: Silver, I don't think too much about it. It's the concept that plays out and works, that's all I care about.

I know the basics of Futures but at the end of the day I don't care WHY it works I only care that it DOES.

Just look at Silver......the pattern is playing out over and over again......does it really matter why? Not to me it doesn't......

For deeper understanding get books by the following:

Larry Williams
Floyd Upperman
Steve Briese

I cannot explain it any further....I'm exhausted...
Lol....Reckon you guys deserve a beer after that session.......
Memories caught in time but never forgotten
  • #171
  • Nov 6, 2012 1:36am Nov 6, 2012 1:36am
GO looks like it might want to be friendly, correcting....Maybe, if it sets up about.........6pm tomorrow evening..that would be nice.. : )
Memories caught in time but never forgotten
  • #172
  • Nov 6, 2012 5:34am Nov 6, 2012 5:34am
Hi Mike

For your cot analysis are you using their paid service, or is the info on the website enough?
Regards
  • #173
  • Nov 6, 2012 5:35am Nov 6, 2012 5:35am
Quoting j4d
GO looks like it might want to be friendly, correcting....Maybe, if it sets up about.........6pm tomorrow evening..that would be nice.. : )
Hi j4d

What is GO?
Regards
  • #174
  • Nov 6, 2012 5:38am Nov 6, 2012 5:38am
Quoting mypipbull
Orders filled so am short now.
Hi PipBull,
I had placed a Sellstop as the day trade (on IB Platform) but it did not get filled in. For commodities do you place sellstop / buystop order for the day only or GTC order.
cheers
novice198
  • #175
  • Nov 6, 2012 6:21am Nov 6, 2012 6:21am
Quoting howard
Hi j4d

What is GO?
Hey Howard,

Gas Oil ( London )
Attached Image (click to enlarge)
Click to Enlarge Name: gas.gif Size: 37 KB
Memories caught in time but never forgotten
  • #176
  • Nov 6, 2012 8:07am Nov 6, 2012 8:07am
Quoting j4d
Lol....Reckon you guys deserve a beer after that session.......
Yep next time I.m in Aus - I'm buying Mike.
  • #177
  • Nov 6, 2012 7:35pm Nov 6, 2012 7:35pm
Quoting howard
Hi Mike

For your cot analysis are you using their paid service, or is the info on the website enough?
I use a paid service that organises the COT info, cost US$5 per month. It presents the CFTC data in an easy to understand and use fashion.
www.cot-futures.com
You can see free delayed data I think if you wanted to have a look.

www.cotbase.com (Ja uses) looks pretty good too and its about US$9 per month I think but gives a bit more analysis I think instead of just the numbers.
I am looking into this site too.
  • #178
  • Nov 6, 2012 7:45pm Nov 6, 2012 7:45pm
Quoting novice198
Hi PipBull,
I had placed a Sellstop as the day trade (on IB Platform) but it did not get filled in. For commodities do you place sellstop / buystop order for the day only or GTC order.
cheers
novice198
I use GTC and this is because I make sure I check every day after the Daily close and trail orders up/down (usually) until they get filled.
As a daytrader order types are probably more critical but I don't know your approach so hard to comment there.
  • #179
  • Nov 6, 2012 7:46pm Nov 6, 2012 7:46pm
Quoting stewrigh
Yep next time I.m in Aus - I'm buying Mike.
Sounds good
  • #180
  • Nov 7, 2012 6:54pm Nov 7, 2012 6:54pm
Big night last night.
Indexes, Oil, CAD, MXN all got the beatdown.....is this the resumption of the downtrend.....I hope so
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