Follow the Smart Money / COT Analysis

gozila · September 8, 2014

Hi Dunstan, I am just curious how you analyze/consider COT for cross pairs like EUR/JPY?

Dunstan · September 8, 2014

Hi Dunstan, I am just curious how you analyze/consider COT for cross pairs like EUR/JPY?

Hi gozila,

In case of such currency pairs, I advise you to analyze both currency futures separately, in this case the EUR and the JPY, in order to determine which of these is stronger/weaker.

All the best,

Dunstan

Dunstan · September 8, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Oats

COT Change (52W) / C – 36%, LS – 26%, SS – 17% /

The cot change signal is clear, indicating a possible drop in prices, while the cot extreme signal is not strong, although still more bearish than bullish.

Palladium

COT Extreme / C, LS – All Time COT extreme /

The all time cot extreme is still present in Palladium, but if you remember what I said last week, this should not be a surprise. I’d recommend you analyze other metal markets also to get a picture of metals in general. We may see Palladium further strengthen, until we get similar bearish signals elsewhere. Let’s not forget about the existing correlation between these markets.

Soybeans

COT Extreme / C, SS – All Time, LS – 412 report COT extreme /

The extreme in Soybeans is unquestionably large, but we don’t seem to see any reaction from price yet. Patience I say:), patience…

All the best,

Dunstan

Dunstan · September 15, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal

COT Change (52W) / C – 27%, LS – 25%, SS – 12% /

Not much to say hear, since we’ve only got a change signal, no extreme. The change was large, so it may influence prices this week in a positive way (= pushing prices higher)

Palladium

COT Extreme / C, LS – All Time COT extreme /

As you can see, last week we’ve witnessed a significant price decline, so it may be that prices have reached their top already. If so, we shouldn’t be surprised, knowing how extreme the market is. Of course it is also unnecessary to be disappointed if you haven’t entered the trade, in the long term there is still profit to me made on this decline. Question is: are we really over the top? This will be answered only is some weeks’ time, when stress levels change: if they further increase, we may see further strengthening of Palladium, if stress levels start to shrink, we should see the continuation of the decline.

Rough Rice

COT Extreme / C – 1144 report, LS – All Time COT extreme /

What a beautiful extreme we have here:) Do I really need to write anything --> the charts tell it all:) For anyone new here, I’ll explain: the cot extreme is HUGE and if you look at the chart, RR usually reacted to these large cot extreme signals. I’m expecting prices to rally soon.

All the best,

Dunstan

Dunstan · September 22, 2014

Hi everyone,

The latest Commitments of Traders review is out.

New Zealand Dollar

COT Change (52W) / C – 43%, LS – 43%, SS – 34% /

COT Index (3yr.) / C – 82%, LS – 18%, SS – 27% /

Both of our major cot signals this week are very bullish. The change in Traders positions was very large and with large movement, their positions have reached an extreme territory where we need to be cautious. If you look at the chart, you can see how well this currency reacted to these major extremes in the past. I’m expecting price to reach a bottom soon.

Rough Rice

COT Extreme / C – 1145 report, LS – All Time COT extreme /

The extreme has grown larger, we’re still waiting for the rally:)

Soybeans

COT Extreme / C, SS – All Time, LS – 415 report COT extreme /

Incredibly large cot extreme in Soybeans… Looking at the chart, there is no question that we are expecting a bottom, but (!) be careful, they extreme is capable of widening even more, or we may even witness a commercial capitulation. There is little chance for that, but it’s always amongst the possibilities.

All the best,

Dunstan

Dunstan · September 29, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Palladium

COT Change (52W) / C – 52%, LS – 56% /

This was a large change is Traders positions, but hey (!), let’s not forget about the cot extreme situation that we were in a few weeks ago… the decline we are witnessing now is a consequence of that extreme. So what I’m trying to say is that we may see prices bounce back up, but the medium/longer term picture still looks bearish.

Rough Rice

COT Extreme / C – 1146 report, LS – All Time COT extreme /

The extreme has grown larger, prices have started to rise a bit.

USD Index

COT Extreme / C, LS – All Time COT extreme /

When we have such an extreme in a market, commercials and large specs holding positions that they have never held before, then I feel a little bit uncomfortable about what to say:) This picture is so very clear: we have a very large bearish cot signal that will – with high probability, nothing more – end the rally.

All the best,

Dunstan

Dunstan · October 6, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Mexican Peso

COT Change (52W) / C – 16%, LS – 14%, SS – 31% /

COT Index (3 yr.) / C – 85%, LS – 15%, SS – 21% /

The picture has become nice and bullish here in the Mexican Peso: we have a reasonably large change in Traders positions, giving us a bullish cot signal and also we are getting really close All Time extreme levels.

Cotton

COT Extreme / C – 411, LS – 396 report COT extreme /

The extreme has become HUGE, we should be getting ready for another rally here!

RBOB Gasoline

COT Extreme / C – 64, LS – 211 report COT extreme /

The bullish extreme signal suggests that we should see higher prices soon, but of course the dynamics of last week’s decline should make us cautious with entering the trade.

All the best,

Dunstan

Dunstan · October 13, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Cocoa

COT Change (52W) / C – 45%, LS – 43%, SS – 28% /

COT Index (3 yr.) / C – 18%, LS – 84% /

The cot change signal is present: a large, bullish signal. Would have been nicer, if we could see it a bit earlier:) --> prices have already gone up significantly last week. Is there room for more rally? The longer term picture looks more bearish, so it may be a bit riskier to expect further rises… To be honest, I think it’s simply best, if we look towards other markets, where the signs are more clear.

Natural Gas

COT Extreme / C – 150, LS – 158 report COT extreme /

The extreme is relatively large (could be much larger) and at a level, where for the last two occasions, prices reacted to the signal. It is a bullish picture.

Soybean Oil

COT Extreme / C – 107, LS – 127 report COT extreme /

I find this market to be very interesting, because the cot report is bearish, although prices are low… If we look at a much longer chart, we can find much larger bearish cot extremes, so if prices start to go higher, there would be room for the extreme to get larger too, thus we could reach a top, where the extreme would seem normal.

All the best,

Dunstan

Dunstan · October 20, 2014

Hi everyone,

The latest Commitments of Traders review is out.

S&P-400

COT Change (52W) / C – 25%, SS – 44% /

COT Extreme / C – 49 report, SS – All Time COT extreme /

The cot change signal is negative, Small Speculators extreme situation also… Could we see further decline in prices?

Coffee

COT Extreme / C, LS – 345 report COT extreme /

The cot extreme is huge, close to all time levels. This is definitely a warning that prices may not be able to continue their rise for too long. Let’s get prepared for a drop in prices.

Natural Gas

COT Extreme / C – 159, LS – 159 report COT extreme /

We have reached a cot extreme level where the last two times prices bottomed out and we could see price rally develop afterwards. This is absolutely amongst the possible outcome of this current cot signal.

All the best,

Dunstan

Dunstan · October 27, 2014

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500

COT Change (52W) / C – 50%, LS – 35, SS – 58% /

The picture is bullish. The large change in Trader’s position, the relative cot extreme here and the more visible, large cot extreme in the Dow support further rally.

Orange Juice

COT Extreme / C – 294, LS – 294 report COT extreme /

The cot extreme in orange juice is unquestionably large and showing a very bullish picture. Signals were nice and effective in this market, so I’d say we can really use this signal and consider a long trade.

Natural Gas

COT Extreme / C – 184, LS – 180 report COT extreme /

In contrary to OJ, here the extreme is only large in relative terms. We do see much greater extremes in the past, so it’s a bit difficult to tell, whether or not this extreme is capable of stopping the recent decline or not. It may be a wise idea to analyze other energy markets and taking into account the correlation between them.

All the best,

Dunstan

shuvo7748 · October 27, 2014

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500

COT Change (52W) / C – 50%, LS – 35, SS – 58% /

The picture is bullish. The large change in Trader’s position, the relative cot extreme here and the more visible, large cot extreme in the Dow support further rally.

Orange Juice

COT Extreme / C – 294, LS – 294 report COT extreme /

The cot extreme in orange juice is unquestionably large and showing a very bullish picture. Signals were nice and effective in this market, so I’d say we can really use this signal and consider a long trade.

Natural Gas

COT Extreme / C – 184, LS – 180 report COT extreme /

In contrary to OJ, here the extreme is only large in relative terms. We do see much greater extremes in the past, so it’s a bit difficult to tell, whether or not this extreme is capable of stopping the recent decline or not. It may be a wise idea to analyze other energy markets and taking into account the correlation between them.

All the best,

Dunstan

the original report

COT charts

Hello Dunstan,

Thank you very much for continuously posting. :applaud:

Dunstan · October 28, 2014

Hello Dunstan,

Thank you very much for continuously posting. :applaud:

It is my pleasure!

Thanks for your kind post.

All the best,

Dunstan

Dunstan · November 3, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Soybean Meal

COT Change (52W) / C – 41%, LS – 38 /

It’s really only the cot change signal that can affect prices now and of course downwards: we do not have a cot extreme situation at the moment. The last major extreme was the bullish one a few weeks ago and as you can see, it still in effect.

S&P-400

COT Extreme / LS – 317 report, SS – All Time COT extreme /

Small Speculators being all time optimistic about the market is always a warning sign:)

Natural Gas

COT Extreme / C – 185, LS – 181 report COT extreme /

Any questions here? The extreme has been present for a few weeks now and we can see that prices last week managed to rally nicely, so we may have the confirmation needed think seriously about further rallies in natural gas.

All the best,

Dunstan

Dunstan · November 10, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Dow Jones-30

COT Change (52W) / C – 35%, LS – 27 /

Ok, the change was large, it may draw prices lower in the next few days… What I’m more interested is the long term picture. Prices are high, but we don’t see any indication from the report that we should expect the end of the rally. If you look at small specs here in the Dow, you can see how pessimistic they are about further rallies… I think that’s just a good evidence for us that supports a bullish picture.

Orange Juice

COT Extreme / LS – 296 report COT extreme /

Don’t miss out the opportunity lying here! The bullish cot extreme is present and it is unquestionably large. As you can see on the chart, OJ has reacted nicely to cot extreme signals. I think it can be a wonderful trade.

New Zealand Dollar

COT Extreme / C – All Time, LS – 125, SS - 334 report COT extreme /

Wow, another great market with a beautiful signal! All major participants of the market hold extremely large positions and similarly to OJ, judging by the past, the market is likely going to react to the signal.

All the best,

Dunstan

Dunstan · November 17, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Nasdaq-100

COT Change (52W) / C – 27%, LS – 31 /

The larger changes in Commercials and Large Specs positions resulted in a bearish cot change signal. Analyzing the market we can come to the conclusion that these cot change signals were not necessarily effective in many cases. Since we do not have any extreme to talk about (unless we consider the 33 report extreme a relative extreme) I’d say we should move on to other markets.

Orange Juice

COT Change (52W) / C – 10%, LS – 13% /

COT Extreme / C – 584, LS – 579 report COT extreme /

I have already analyzed orange jucie last week and it seems that prices have reacted to the signals. It is of course still a good trade in the long run. The changes in Traders positions (Commercials and Large Speculators) were definitely larger than average - bullish signal - but it is really the cot extreme situation we have that makes the trading opportunity very exciting. As you may see on the chart, it has reacted pretty well to these cot extreme signals in the past, and since we have got a very significant extreme, this too has a high chance to become an effective signal.

Natural Gas

COT Extreme /LS – 183 report COT extreme /

The cot extreme is wide and is worth taking into consideration when we analyze the trading opportunities in natural gas, but last week’s decline should warn us to be very cautious with any trade. We may easily see further decline accompanied by a widening extreme. I’m not saying it is going to happen, but it shouldn’t be a neglected possibility. The extreme is present, it is bullish --> this is fact.

All the best,

Dunstan

Dunstan · November 24, 2014

Hi everyone,

The latest Commitments of Traders review is out.

S&P-400

COT Change (52W) / C – 20%, LS – 29, SS – 15% /

Although S&P-400 made it to the top in the list regarding the size of change in Commercials position, I don’t believe that it was too significant. The cot extreme is not large either, so I wouldn’t think it would too wise to force any serious conclusion here. Let’s just say, it’s one of the typical weeks, when we haven’t got a cot signal.

Natural Gas

COT Index (3yrs) / C – 93%, LS – 0%, SS – 74% /

COT Extreme /LS – 184 report COT extreme /

The bullish cot extreme is still present in Natural Gas (at least on C and LS side --> SS signal seems to be more bearish). Are we going to see a widening of the extreme in the next few weeks? I don’t know… it is not an easy puzzle that’s for sure.

Platinum

COT Extreme /LS – 117 report COT extreme /

Bullish cot extreme. Large? If we look at the past 5-10 years: Yes, but we have seen much greater extreme before. Still, it is a valid sign, that stress levels are getting much higher. Should we jump in on this signal and start buying? Hmmm… Put this piece of information beside the rest of your analysis (traditional TA etc…) and decide. On its own, this extreme wouldn’t push me into such a decision.

All the best,

Dunstan

Dunstan · December 4, 2014

Hi everyone,

The latest Commitments of Traders review was not updated this week, but here’s my weekly snapshot anyway!

Orange Juice

COT Change (52W) / C – 23%, LS – 25, SS – 12% /

Large cot change sell signal from the report. Not surprising seeing the nice rise in prices! BTW, isn’t it a beautiful example of cot extreme signal’s effectiveness?

Anyhow… I think that we can expect a bit of decline in the short term, but I wouldn’t be betting on anything long lasting, since we had this huge cot extreme.

Rough Rice

COT Index (3yrs) / C – 98%, LS – 0%, SS – 17% /

COT Extreme /LS – All Time COT extreme /

The cot extreme is huge (All Time in large specs) so the picture is not that difficult to decode:) Prices have started to increase two weeks ago and this may easily continue in the next couple of weeks!

Crude Oil

COT Extreme /C – 75, LS – 79 report COT extreme /

The cot extreme is large and probably getting larger week by week. Pinpointing the end of the decline, even with the help of the cot report is not something easy… But hey (!), we shouldn’t forget that not too long ago, we had a bearish all time cot extreme! So what’s happening now is what we were expecting to happen a few months ago…

All the best,

Dunstan

Dunstan · December 8, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Oats

COT Change (52W) / C – 43%, LS – 15, SS – 42% /

The cot change signal is positive, suggesting prices can climb higher in the near future. This is backed by a relative bullish cot extreme (nothing too large, so we are not expecting any major influence from it).

Mexican Peso

COT Extreme /C, LS – All Time COT extreme /

Get ready for a bottom! I know… it looks “scary” , but hey (!), look at how MXP reacted to similar extremes in the past!! It’s not gonna be an easy trade, but is definitely worth it!

Copper

COT Extreme /C, LS – All Time COT extreme /

In the last two years, we had similar extremes a few times. Although prices reacted nicely, they couldn’t stay on the rally for too long. I’m not expecting the situation to be any different this time, so even if prices can climb, I wouldn’t be betting on anything long lasting… Nevertheless, it is a great R/R opportunity!

All the best,

Dunstan

Dunstan · December 15, 2014

Hi everyone,

The latest Commitments of Traders review is out.

Lumber

COT Change (52W) / C – 29%, LS – 31, SS – 15% /

Although the cot change signal is negative (bearish), looking at the longer charts we can see that we are actually not far away (in time and in net contracts also) from significant bullish cot extreme levels. Conclusion: we may expect declining prices short term, but the medium/longer term picture seems to be bullish.

Mexican Peso

COT Extreme /C, LS – All Time COT extreme /

The all time cot extreme has widened more as prices are declining further. Catching the bottom is not easy, but it is pretty obvious that it’s going to happen!

Natural Gas

COT Extreme /C - 191, LS – 191 report COT extreme /

Bullish cot extreme in Natural Gas. We had such extremes a few weeks ago and prices has reacted to it. Now we see prices declining again parallel to the growing stress level in the market. Normal. We may see even greater extremes in the near future!

All the best,

Dunstan

Dunstan · December 22, 2014

Hi everyone,

The latest Commitments of Traders review is out.

S&P-500

COT Change (52W) / C – 36%, LS – 34, SS – 18% /

We are witnessing a very large change in the cot report (bearish signal) pushing us towards bearish cot extreme levels. I’m not saying that “the time has come”… but we do know that if we eventually reach the end of this bull trend, we should be seeing bearish cot extreme signals.

Mexican Peso

COT Extreme /C, LS – All Time COT extreme /

It seem that as the extreme widened further, prices have managed to “stabilize”… is it a good opportunity to enter? One thing is for sure… the all time cot extreme: it is telling us that prices will stop their decline soon.

Lean Hogs

COT Extreme /C - 48, LS – 76 report COT extreme /

Let this be an example for situations when the cot analysis is not giving us clear signals. This is a fine example when you should say to yourself: “ok, let’s look at another market”

All the best,

Dunstan

Dunstan · January 7, 2015

Hi everyone,

Happy and profitable New Year to All of You!!

The latest Commitments of Traders review is out.

Dow Jones-30

COT Change (52W) / C – 17%, LS – 18% /

We have a larger change in Traders positions than average, but nothing too unusual. It is bearish. The cot extreme signal is also bearish, especially in Small Specs positions. How to react on such signals? Cautiously:) If you have been following cot signals in indexes, by now you should see that cot analysis is not necessarily as helpful as in other, more “traditional” futures markets.

Copper

COT Extreme /LS – All Time COT extreme /

The All Time cot extreme signal (bullish) is an unquestionably very significant signal here that we should take seriously. I’m not saying that jumping in right away with huge positions is the “good answer”, but we can start preparing for a nice trade. Caution: if you look at the previous bullish extremes, you can find that the rallies following were “short living”. This doesn’t mean that the next rally has to be the same, I’m just saying that when we assume the potential R/R for the trade, let’s not forget about this.

Mexican Peso

COT Extreme /C, LS – All Time COT extreme /

Further widening of the cot extreme while prices could not gain any real momentum upwards… the potential for further weaker prices is still in place. If so, we will be witnessing even greater extremes OR (!) the rare situation that we call “commercial capitulation”. If that happens, “Hell’s Gates open” and we will see a huge decline, something similar that we had in Japanese Yen back in the end of 2012. In any case, we can expect “something serious” to happen:) --> long straddles? maybe:)

All the best,

Dunstan

Dunstan · January 19, 2015

Hi everyone,

COTbase did not update their site with the latest Commitments of Traders review, but anyhow, I will show you some interesting markets that you may want to analyze closer.

Soybean Meal

COT Change (52W) / C – 27%, LS – 15%, SS – 27% /

We are moving away from bearish cot extreme levels, plus we have a strengthening USD environment, so let’s not be surprised that Soybean Meal is falling and we are getting such large changes in Traders positions. This can of course influence prices in the near term and push prices a bit higher/ slow down the fall of prices.

Rough Rice

COT Extreme /LS – All Time COT extreme /

We have had this kind of extreme in the cot report for some time now with any serious, longer lasting effect on prices, so I would warn you to be cautious with this market… but it is true: we have got an unquestionable large bullish cot signal.

USD Index

COT Extreme /C, LS – All Time COT extreme /

I know the world is in panic mode and it’s hard to believe in such circumstances that the trend can end… but they usually do at some point in time. The cot report shows us how unbelievably large the stress levels have become, so we should be very cautious with our expectations of much higher USD prices.

All the best,

Dunstan

Dunstan · January 26, 2015

Hi everyone,

The latest Commitments of Traders review is out.

Swiss Franc

COT Change (52W) / C – 40%, LS – 40%, SS - 36% /

Are we surprised? We shouldn’t be… So we have a huge cot change signal, bearish one. I’d say it may not be the best time to act on it:)

USD Index

COT Extreme /C, LS, SS – All Time COT extreme /

Although we have the largest cot extreme in USD Index history, due to its special nature, I’d have to repeat what I said for CHF, we have to be careful. I would not be surprised at all to see even greater extremes and parallel much higher prices. I’m not saying it will happen, I’m just warning you, it can happen.

Rough Rice

COT Extreme /C, LS – All Time COT extreme /

Waiting for the market to react to this signal. We have had this extreme present for many months now… are we going to have to wait even more? Maybe, but one thing is clear: we will eventually reach a bottom and see this all time cot extreme signal take it’s effect.

All the best,

Dunstan

Dunstan · February 3, 2015

Hi everyone,

The latest Commitments of Traders review is out.

Cocoa

COT Change (52W) / C – 41%, LS – 36%, SS - 49% /

The two main cot signals pointing in opposite direction. On one hand, we have a pretty large change in Traders positions, suggesting a move upwards… in the near term it may easily happen, but if we look at the wider picture, we can see that not too long ago, we has a major bearish cot extreme signal. I believe it is still active and we should be expecting lower prices to come.

Soybeans

COT Extreme /LS - 434 report COT extreme /

The cot extreme is once again widening as prices have started to decline. The big question of course is whether or not the support level close to 900 will hold. If prices are unable to penetrate the level, I would say that the recent cot extreme signal will dominate and we should expect the rally to continue.

Silver

COT Extreme /C – 225, LS - 361 report COT extreme /

Such a large cot extreme at so low prices… interesting. It definitely underlines that we shouldn’t be expecting higher prices any time soon…

All the best,

Dunstan