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Follow the Smart Money / COT Analysis

  • #441
  • Jan 18, 2016 8:27am Jan 18, 2016 8:27am
Daer Dunstan,
Thank-you again very much indeed for your selfless guidance on this fascinating method of market analysis. Please might I pester you for your view on Gold at present levels and related Commercial sentiment in these turbulent markets? I am very bullish!
Regards,
Hamish.
  • #442
  • Jan 21, 2016 8:08am Jan 21, 2016 8:08am
Quoting itshamish
Daer Dunstan, Thank-you again very much indeed for your selfless guidance on this fascinating method of market analysis. Please might I pester you for your view on Gold at present levels and related Commercial sentiment in these turbulent markets? I am very bullish! Regards, Hamish.
Hi Hamish,

Sorry for replying so late...
I think I can agree with your sentiment. The picture does look bullish! Of course caution in realistic targets is advised: you may see that the rallies generated by such bullish cot signals weren't that long lasting. The general trend is obviously bearish, so we should take our trades accordingly.

All the best,
Dunstan
Attached Image (click to enlarge)
Click to Enlarge Name: Report2_Gold.png Size: 115 KB
  • #443
  • Jan 21, 2016 8:09am Jan 21, 2016 8:09am
wooops, sorry about that chart... here's a good one.
Attached Image (click to enlarge)
Click to Enlarge Name: Report2_Gold.png Size: 115 KB
  • #444
  • Jan 25, 2016 1:58am Jan 25, 2016 1:58am
Hi everyone,

The latest Commitments of Traders review is out.

New Zealand Dollar
COT Change (52W) / C – 17%, LS – 15%, SS – 24% /
The last major cot extreme signal was bullish and it is still in place. The larger cot change signal present is also bullish.

Copper
COT Extreme / LS – All Time COT extreme /
The extreme has widened further since last week. Much has not changed, so we can still state that the picture is very bullish. This of course does not mean that we should jump right in the market, these extremes can exist for many weeks or even months before any price reaction.

Soybean Meal
COT Extreme / C – 213, LS – 571 report COT extreme /
With the exception of Small Specs, who were net short, the picture is very similar to what we had back in 2011. Nevertheless the signal is huge, very bullish. I very much like this market!!

All the best,
Dunstan

COT Charts
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Report3_Soybean Meal.png Size: 123 KB
Click to Enlarge Name: Report3_Copper.png Size: 125 KB
Click to Enlarge Name: Report3_NZD.png Size: 125 KB
  • #445
  • Jan 26, 2016 6:18am Jan 26, 2016 6:18am
Hi Dunston,

without trying to side-track your thread, I would like to discuss with you how the COT analysis could be used in conjunction with other methods.

I basically have two assumptions:

  1. The COT analysis makes sense as you can see what the smart money is doing.
  2. Smart money is not always right.

So, for me it would actually make sense to use the COT analysis as a second step. First get an investment thesis in the currency, then wait for the smart money to confirm that investment thesis.

Which leads me to: How can one construct an investment thesis in currencies. Technical analysis doesn't make much sense for forming an investment thesis. A fundamental analysis would. But how can we go about valuing a currency pair?

happy to discuss, or also happy for you to say: no thank you Custos, this thread is just about cot analysis, no side-tracking.

in any case, best regards and happy trading.

  • #446
  • Jan 29, 2016 5:41am Jan 29, 2016 5:41am
Quoting Custos
Hi Dunston, without trying to side-track your thread, I would like to discuss with you how the COT analysis could be used in conjunction with other methods. I basically have two assumptions: The COT analysis makes sense as you can see what the smart money is doing. Smart money is not always right. So, for me it would actually make sense to use the COT analysis as a second step. First get an investment thesis in the currency, then wait for the smart money to confirm that investment thesis. Which leads me to: How can one construct an investment thesis...
Hi Custos,

Sorry for my late reply… Here is my answer to your question.

Although the cot graphs may seem like indicators below the price charts, they are not derivated from price! Thus you have to look at the report as more like a fundamental chart rather than technical. That is the beauty of it in my opinion. In essence, the cot report simply divides open interest in the market amongst the different major players. Don’t forget about one of the most common thesis in trading that a market will stop rallying and will fall, once the buyers leave. We know that buyers will leave, once their buying power is lost. That is nice and true, but how on Earth do we know, when they reach that point? Of course we can’t, but that is exactly where the cot analysis comes in as a handy tool. By comparing existing extremes to the ones in the past, we can assume/feel that a group is losing buying power. These cot extremes thus can very well signal changes in the major Trend. There are plenty of examples in this thread for it.

In my opinion there are two good ways to use cot analysis: 1) using it as a compass to show you opportunities in different markets OR 2) to confirm your traditional trading decisions based upon other methods, such as technical analysis. In either way, you will need to use more sophisticated methods for exact entries and exits for your trades.

Regarding currency pairs: simply take the two pairs and analyze them separately. For example EUR/CAD ---> analyze the EUR cot report and then the CAD cot report.

I hope this was helpful for you!

Have a great weekend,
Dunstan
  • #447
  • Jan 29, 2016 5:50am Jan 29, 2016 5:50am
Pls suggest good sites to analyze latest cot numbers..
  • #448
  • Jan 29, 2016 5:54am Jan 29, 2016 5:54am
Quoting Naokia980
Pls suggest good sites to analyze latest cot numbers..
The cot report is issued by CFTC --> www.cftc.gov
I use COTbase.com for my cot analysis --> www.cotbase.com

All the best,
Dunstan
  • #449
  • Jan 29, 2016 6:02am Jan 29, 2016 6:02am
Thanks. İt is difficult for me to review and apply cot to my strategy. İ am very far from trading cause i am soldier at army now
  • #450
  • Jan 29, 2016 6:15am Jan 29, 2016 6:15am
Quoting Dunstan
Hi everyone, The latest Commitments of Traders review is out. New Zealand Dollar COT Change (52W) / C 17%, LS 15%, SS 24% / The last major cot extreme signal was bullish and it is still in place. The larger cot change signal present is also bullish. Copper COT Extreme / LS All Time COT extreme / The extreme has widened further since last week. Much has not changed, so we can still state that the picture is very bullish. This of course does not mean that we should jump right in the market, these extremes can exist...
Hi there I cannot see the NZD in a extreme..can u show me in the chart?
  • #451
  • Jan 29, 2016 8:29am Jan 29, 2016 8:29am
Quoting Naokia980
Thanks. İt is difficult for me to review and apply cot to my strategy. İ am very far from trading cause i am soldier at army now
Take care of yourself!

All the best,
Dunstan
  • #452
  • Jan 29, 2016 8:41am Jan 29, 2016 8:41am
Quoting juangecko
{quote} Hi there I cannot see the NZD in a extreme..can u show me in the chart?
I've attached a chart of NZD indicating the last major cot extreme (bullish).

All the best,
Dunstan
Attached Image (click to enlarge)
Click to Enlarge Name: Report3_NZD.png Size: 125 KB
  • #453
  • Jan 31, 2016 7:49am Jan 31, 2016 7:49am
Dear Dunstan,
Many thanks for your helpful response and sensible, cautious agreement. Of course it is difficult to make an accurate analysis when the physical gold market prices are polluted by the 'paper', or synthetic, ETF GLD prices which are manipulated by gangsters, err banksters, wrong, I mean 'central' bankers... they who are the 'w's in ' -anking'.
Please keep up your excellent work,
Yours sincerely,
Hamish.
  • #454
  • Feb 15, 2016 1:59am Feb 15, 2016 1:59am
Hi everyone,
The latest Commitments of Traders review is out.
Platinum
COT Change (52W) / C – 45%, LS – 41%, SS – 19% /
It looks as if prices started to react to bullish cot extreme signal that has been present in the market for some time now. We should not be surprised to see such a larger change in Traders positions. It may influence prices and push them back in the near term, but let’s not forget that the stronger cot signal is the extreme!
Wheat (Kansas)
COT Extreme / LS – All Time COT extreme /
When we reach and all time cot extreme in a market, there is not too much I can add, the picture is pretty obvious. The only important note I may add is that these extremes can go on for many weeks before price starts to react!
Cotton
COT Extreme / C – 52, LS – 52 report COT extreme /
We have a relative bullish cot extreme in the market, but caution is advised: with even greater extremes (second half of 2014 for example) the market may still head downwards.
All the best,
Dunstan
COT Charts
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Report6_Cotton.png Size: 111 KB
Click to Enlarge Name: Report6_Wheat.png Size: 119 KB
Click to Enlarge Name: Report6_Platinum.png Size: 112 KB
  • #455
  • Feb 16, 2016 9:51am Feb 16, 2016 9:51am
What do you use to chart the COT report? Is there a good MT4 indicator? Is that a website?
Holy grail: risk management
  • #456
  • Feb 29, 2016 1:27am Feb 29, 2016 1:27am
Quoting mjbarr
What do you use to chart the COT report? Is there a good MT4 indicator? Is that a website?
Hi mjbarr,

Sorry for replying so late... the service I use is: www.cotbase.com They provide the these cot charts for me.

All the best,
Dunstan
  • #457
  • Feb 29, 2016 1:34am Feb 29, 2016 1:34am
Thanks for the update!

Actually there's a new website that also provides COT charts for free:

https://www.tradingster.com/cot

I think this website have a couple of unique features: 1) It has more interactive charts. 2) It's all FREE.
  • #458
  • Feb 29, 2016 1:43am Feb 29, 2016 1:43am
Hi everyone,

The latest Commitments of Traders review is out.

Lumber
COT Change (52W) / C – 26%, LS – 32%, SS – 23% /
The cot change signal indicates that prices can fall on the near future, but a cot extreme is still bullish.

Wheat (Chicago)
COT Extreme / LS – All Time COT extreme /
The picture is very clear: all time cot extreme, HUGE bullish signal.

Soybean Meal
COT Extreme / C – 576, LS – All Time COT extreme /
The picture is very clear: all time cot extreme, HUGE bullish signal.

All the best,
Dunstan

COT Charts
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Report8_Soybean Meal.png Size: 120 KB
Click to Enlarge Name: Report8_Wheat (Chicago).png Size: 116 KB
Click to Enlarge Name: Report8_Lumber.png Size: 110 KB
  • #459
  • Apr 25, 2016 4:45am Apr 25, 2016 4:45am
Hi everyone,

The latest Commitments of Traders review is out.

Mexican Peso
COT Change (52W) / C – 36%, LS – 36%, SS – 21% /
We have a change in Traders positions that is much larger than average and it is a bearish cot signal. Prices have gone down last week Thursday, so the signal may be a little late for us. The cot extreme is relatively bearish and as you can see on the chart, when it reached these levels the last two times, prices went further down. The longer term picture of course is definitely bullish, we are far away from All Time or close to AT bearish cot extreme leves.

Silver
COT Extreme / C – 541, LS – All Time COT extreme /
The picture is very clear: all time cot extreme, HUGE bearish signal.

Japanese Yen
COT Extreme / C – 421, LS – All Time COT extreme /
The picture is very clear: all time cot extreme, HUGE bearish signal.

All the best,
Dunstan

COT Charts
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Report16_JPY.png Size: 327 KB
Click to Enlarge Name: Report16_SIlver.png Size: 327 KB
Click to Enlarge Name: Report16_MXP.png Size: 352 KB
  • #460
  • Apr 25, 2016 6:45am Apr 25, 2016 6:45am
Hello Dunstan

Thank you for the info. Do you have a section/youtube that can explain how to implement the COT report into day to day trading for us amateurs?

Thank you
Jannie
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