The COT Report

[CanOz]

I thought maybe we can use this thread to help each other understand the COT report.

From what i've learned so far, it pays to keep an eye on open interest, and the differences between the commercial (smart money) and the public (non-commercial) positions.

Extreme differences in the two are bullish for the commercial postions, from what i've learned.

Open interest changes are most useful when the contract is trading in a range.

Heres a link to the reports:

http://www.cftc.gov/cftc/cftchome.htm

FWIW here are a couple contracts with big differences between the non-commercial and the commercial positions, to have a look for and watch:

-Swiss Franc
-J.Yen



Wayne if your listening, do you use the COT report? Do you graph it weekly?

Cheers,

 

[wayneL]

I thought maybe we can use this thread to help each other understand the COT report.

From what i've learned so far, it pays to keep an eye on open interest, and the differences between the commercial (smart money) and the public (non-commercial) positions.

Extreme differences in the two are bullish for the commercial postions, from what i've learned.

Open interest changes are most useful when the contract is trading in a range.

Heres a link to the reports:

http://www.cftc.gov/cftc/cftchome.htm

FWIW here are a couple contracts with big differences between the non-commercial and the commercial positions, to have a look for and watch:

-Swiss Franc
-J.Yen



Wayne if your listening, do you use the COT report? Do you graph it weekly?

Cheers,

There was a nice trade off the lows in copper recently with COT showing extremes as discussed at RC.

Definitely worth keeping an eye on.

 

[Edwood]

good idea CanAus

noted this in the report:
A trading entity generally gets classified as a "commercial" by filing a statement with the Commission (on CFTC Form 40) that it is commercially "...engaged in business activities hedged by the use of the futures or option markets."

interesting that they're classified as "hedgers". I guess that means the non-commercials are speculators?

I've seen other reports that explicitly split out commercials, non-commercials, small speculators and large speculators - will see if I can find it

Ed

 

[BREND]

I've been watching this report every Monday for more than half a year, and I can tell you that the only thing it will reveal is how much hedge funds are losing money on their trades. It is certainly not an indicator of future price movement.

 

[CanOz]

I've been watching this report every Monday for more than half a year, and I can tell you that the only thing it will reveal is how much hedge funds are losing money on their trades. It is certainly not an indicator of future price movement.

Brend, being a metal trader/broker, i assume your mainly speaking of metals?

Cheers,

 

[BREND]

Brend, being a metal trader/broker, i assume your mainly speaking of metals?

Cheers,

Yes, only referring to metals.

 

[wayneL]

I've been watching this report every Monday for more than half a year, and I can tell you that the only thing it will reveal is how much hedge funds are losing money on their trades. It is certainly not an indicator of future price movement.

As such, it is a contrarian indicator.

Nothing is the holy grail, but it is another bit of info to use, another tool.

fwiw

 

[CanOz]

As such, it is a contrarian indicator.

Nothing is the holy grail, but it is another bit of info to use, another tool.

fwiw

I think i'll do up a simple spreadsheet of the ones i watch, with a graph of the position each the commercials and non-coms. Would you be interested in that weekly update Wayne? Maybe if you were i could post the sheet as an attachment and we could ensure between the two of us that it gets posted?

Any that you want on there for sure?

Cheers,

 

[wayneL]

I think i'll do up a simple spreadsheet of the ones i watch, with a graph of the position each the commercials and non-coms. Would you be interested in that weekly update Wayne? Maybe if you were i could post the sheet as an attachment and we could ensure between the two of us that it gets posted?

Any that you want on there for sure?

Cheers,

Weekly updates would be good. But most useful are when the commercials and large specs are at extremes. This is when reversals in trend are more likely

I think any contracts where there is real world supply and demand such as Ags, grains etc are worth doing... even currencies seem to give good macro signals.

Gold and Silver COT I reckon should be ignored. Copper OK though.

 

[Kauri]

Hi can,
Have you tried here.. http://www.upperman.com/basic-cot-share/cotfree.htm
Has some charts done up... I've tried to use them but have not really worked out a wat to incorporate it into my trading..
Sugar chart.......

 

[BlueDaze]

These 2 bloggers have developed extensive market buy-sell signals based on the COT Report. Very insightful.

http://cotstimer.blogspot.com

http://garyscommonsense.blogspot.com

 

[wayneL]

Kauri, Bluedaze,

Great resources.

Thanks

 

[CanOz]

Similar to what Brend was saying:

That's in part because the large investment firms and hedge funds remain quite bearish, so you know what that means: When the "dumb money" says sell, it's probably a good time to buy. (Yes, these are the guys managing our pensions and retirement savings. Oops!)

Interesting....

Thanks for that link.

Cheers,

 

[CanOz]

Hi can,
Have you tried here.. http://www.upperman.com/basic-cot-share/cotfree.htm
Has some charts done up... I've tried to use them but have not really worked out a wat to incorporate it into my trading..
Sugar chart.......

Thanks for this Kauri, i spent quite some time looking at the graphs for each of the commodities. Essentially what you look for (and this is according to what i've read from Larry Williams) is a juxtaposition between the two groups positions...e.i. if the commercials are very bullish on XZ commodity, and the non-commercials are bearish, this is a bullish sign...but...he says its not a timing tool, just a setup. So the commercials could be accumulating or distributing thier positions before the trend ends. He actually says that they tend to be "trend enders".

Quite interesting to see a few very opposing postions right now, some of them very strongly opposed. I think you would want to use this in combination with some strong technical signs and some low risk entries....obviously with rock solid risk and money management.

Anyway, sure saves allot of trouble graphing all that data! Its now on my favs thanks to you!

I'm currently taking Nick's futures course. After which i think i'll setup a paper trading system for futures and trade this in as disciplined a manner as possible for a few years until i get my captial base up sufficiently to eventually trade futures properly.

Cheers

 

[CanOz]

Latest COT Report...we're compiling this weekly ourselves now....

 

[kid hustlr]

Latest COT Report...we're compiling this weekly ourselves now....

Nice.

Just as refresher:

Net Com = Net Commercial

Net NC = net Non-commercial (public?)

Whats Net SM?

 

[CanOz]

Nice.

Just as refresher:

Net Com = Net Commercial

Net NC = net Non-commercial (public?)

Whats Net SM?

yeah, NC is the funds, SM is the small traders...

 

[CanOz]

Latest COT reports...