Follow the Smart Money / COT Analysis

I stopped using COT back in the mid ninties as my outlook changed from daily charts to weekly, monthly and yearly. I will always be on the right side of the COT before the market ever shows it hand. By watching the past 9-20 years on monthly bar charts, I start selling new contracts highs/buying new contracts lows and depending on volatily I will hedge with short term options. Recently been selling Corn, Sept, Dec, Mar.

I am still long NatGas.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=233834&perpage=6&pagenumber=18
 
Quote from Dunstan:

Ok, I thought I’ll show you another market as well, since you might say, that I’m talking too much about wheat :)

Cocoa was also mentioned in the review, cause the change size in Commercials position was larger than average. It was 28% to be exact. Now this market could be a good example, how to react to a market, where we haven’t got an extreme COT picture. It is only the change in positions that was such that we can talk about it.

I think you should follow the same notes I’ve given earlier, to view this as a confirmation to your existing trading idea or it might just signal an opportunity that you should put in to your system and see whether it should be traded or not.

In the following chart I have indicated similar pictures when Commercial’s changed their net positions this way. I wouldn’t say that this signal is as strong as the one in wheat. If prices react to this and they start to fall, they might just fall to 2000-2100 level, but hey (!), if they do that and you’re in, that’s “fair enough” :). Maybe we would get to a level in COT where it is signaling a good buy opportunity…

The four Cocoa ETF that I found:

NIB: direction - Long / leverage -1x / exchange - NYSE
COCO: direction - Long / leverage -1x / exchange - LSE
SCOC: direction - Short / leverage -1x / exchange – LSE
LCOC: direction - Long / leverage -2x / exchange – LSE

Please let me know if you have any questions,
Have a great day,
Dunstan
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why this one has 400% potential http://www.google.com/finance?q=LON:LCOC while the rest around 50-70% ?
 
Today, the level @ 1397 is very important! However, it's up to YOU how you interpret the signal! Trade it whichever way you please just make sure you are profitable..
More tomorrow :)
 
Quote from vinc:

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yeah, same bs.. just like showing 'levels'.. it's 'I 'll show you levels and you decide how to interpret the signal' kind of stuff.. another subscription pusher imo..just pm him:) he won't show any strategy anyway..waste of time..
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I’m sorry that you couldn’t understand my earlier reply (07-17-12) and you could still not accept my desire not to give any specific strategy recommendations in this thread.

My goal is to introduce the Commitments of Traders report and some tools to analyze it, nothing less, nothing more.

You are correct; I will not show any strategy. If you think that because of this, my thread is a waste of time, you are free to leave. I think that the examples I have brought and the ones that are a head of us should be value to others. I’ve given some instruction how to look at these examples and showed how I do my historical analysis.

I believe a proper way to use Elite Trader is not to stick to one thread, rather to exploit the treasures from more threads. To give you an example, maybe if you saw my post on Wheat, where there is a COT extreme picture, that is pretty obvious to be a bearish picture, one might move on to another thread that discusses option strategies. Maybe then he will figure, that a good way to take advantage of the signal is to start selling OTM Calls on Wheat or to buy Puts… or some kind of a combination of the two etc…

Don’t be lazy, do your research and stop waiting for live calls. Do your own homework.

My intention with this thread is not push anyone towards subscribing to the service I use, but please accept the fact that they use a unique analysis method that I consider valuable and which cannot be found elsewhere (but correct me if I’m wrong, I would gladly look at other valuable services that do analysis on the Commitments of Traders report in such a way).

By the way, the webpage you are referring to shows all the COT reports for free on all markets. It is just the Analysis pages that are connected to a subscription service. For those who would like to see a brief picture of the COT report for the market they analyze they don’t even have to subscribe to anything. I’m sorry to give the impression of being an affiliate to the service…
 
Quote from vinc:

Hi guys!

Today s&p will probably hit 1239 / i mean there is 50/50 % chance/ . It's up to you how you will interpret the signal. Stay tuned for more tomorrow :)
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lol :) that’s funny!
 
Quote from cdcaveman:

dunstan..
why are you so excited.... and commodity tracking etfs ... lose due to term structure curve... "roll cost"
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You are absolutely right, ETFs have inbuilt costs, no question. I’m not saying that trading with them is as valuable as with futures contracts or options on them, but for those traders, who have a small margin on their account, it could be an alternative.

Do I look excited? hmmm… I had a coffee an hour ago, maybe I made it too strong :)
 
Quote from William Rennick:

This chap being more polite than those 2 Chipmunks in the cartoons is a dead give away that he's selling his balderdash. When are pikers going to learn that an indicator that goes public is as worthless as a scent candle in Oprah's bathroom.

Sherlock Rennick out:cool:
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If you are saying that knowing for example that Commercials on the Chicago Wheat are net short 40.000 futures contracts and that Large Speculators are holding so many contracts net long as never before that this information is irrelevant, or to use your words, worthless… well that is your view. In my view COT report is very much different from any technical indicator. I would say that someone who uses COT analysis in his trading stands closer to a Fundamental approach than one using purely technical indicators.

Properly integrated in your system, I believe that COT analysis can give you an edge, at least that is my experience.
 
Hi there. Thank you for this. It helps. I invest gold and I think this post help me to be more successful. Just what I feel after learning in the videos I found at Gold Trading Academy.
 
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