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COT

CXY (Canadian Dollar Index) Loonie Okay, here is why I decided to learn and study the COT. the pattern is a bearish bat pattern with a permissible tolerance of 3% of the B-point. Its a gorgeous pattern and could possibly go long term; however, i dont see it happeneing. The pattern is showing a sell and the COT which reports the big players positions a potential buy. so i would say approach the CAD with caution. while this pair transitions. The COT report shows us that the Loonie Tune players are stepping closer to the Zero line again this week. Indicating that the Loonie could enter a Bullish trend. Now this makes sense as we're enteing the Summer Months here in the US and above the equator (or however you spell it) so travel is going to increase. Now, SARS 2 is running amuck and not being checked, the government here in the US is trying to tighten down restrictions, but i dont see the American People obeying such orders too much longer. I dont think we will ever truly know the mortality rate of SARS 2 in the US as they decided to provide hospitals with additional funding for SARS 2 related treatments so it seems like someone can test postitve but die from a carcrash and the hospital will code it as a COVID-19 related death to earn some extra money. I suspect this is happeneing all over the world and so i truly think the numbers are highly influxed. until the funding stops we will never know. so maybe in a few years when the extra funding has stopped we will see the true numbers and thats not including the shotty testing methods and the questionable regaents being used. with all that being said... travel is going to pick up LOL and its no seceret that the Canadians are exporting more than maple syrup. Their #1 export is oil and they sell the majority to us the US. Oil is struggling but is finding its footing. So, therefore, the Loonie will too. here is the COT Data the Commercials on the Producers and Consumers have reduced thier positions and have taken a decent step closer to the Zero line while the Non-Commercials are marching forward in stride as well. the Comercial Net Data the Current= 25,110 // the previous = 32,240 the non-commercial current= (24,829) // previous = (33,138) so, we can clearly see the sides are marching closer and closer to the Zero line; therefore the Loonie, will get stronger. So, the pattern might be a good setup for catching some high risk manipulation pips or we could see this as relief of the commercials allowing PA to renter the PRZ for it to truly drive down. But, again with the summer here and travel picking up regardless of travel restrictions i see oil picking up and so will the Canadian Dollar.
TVC:CXYShort
by ARegularGuy
AXY (Aussie Dollar Index) Ok, the Aussie currently is currently getting rejected from the major resistance level. there is no real harmonic pattern to draw so here is the COT analysis. i think the aussie might be making moves to switch sides the open interest increased by 3500 orders the Commercial Longs reduced their positions by 4500 orders while the commercial shorts increased their orders by 5600 orders. So, unlike The Cables index the BXY the AXY looks to be adding orders to their respective opposite sides looking to switch sides. the Non-Commercials are looking at the same. NonCom longs increased their position long by 3300 orders while the shorts reduced thier side by 800 orders. Now lets remember the Non-Commercials are for profit and pay taxes as such, to where the Commercials are hedging for rate locks and profit protection from actual business they conduct inter-business-ly (if thats even a word) so as it stands for the Aussie the Net numbers are as follows: Commercials- Current = 43,641 // Previous = 53,852 Non-Coms - Current= (36,575) // Previous- (40,791) So, i reckon if you have any trades against the Aussie it might be a wise decesion to close them out and book profit or take small loss, i dont see the Aussie Weakening this coming week. we might see some minor drawdown but thats about the extent of it the the commercials are switching sides with the non-commercials. remember this is a long process becasue big business and banks just cant switch sides over-night it would crash the world economy so look at it as each week they take a big step toward the Zero Line and then swich sides. during this process we will see that pair get stronger and stronger and before you know it youre in a bull trend when everyone can see it then its time to switch sides again.
TVC:AXYLong
by ARegularGuy
BXY (British Pound) Here we have the BXY or the Pound Index. Im not gonna pretend i know what curriencies make up the BXY its worth a google if you want to know. But what we have here Is an Alternate bat pattern that tested the HOP and was rejected. I am gussing the pattern will drive down to the 382 retracement of this pattern and then start moving up. I say this becasue when you look at the COT report the Commercials reduced their positions from 136k orders to 127k orders while the shorts marginally increased theirs about 1,600 orders. the Non-Commercials, which are the fuel for the trend, reduced their short side by 10k orders bringing their value from 63,000 short to about 52,900 short. this is a siginificant deal. so when you look at the net positions for both which is what most COT traders do then we have the following stats for The Cable... Commercials Current= 34,112 // previous = 44,403 Non-Commercials Current = (24,048) // Previous= (36,044) I think this is nothing more than the commercials delievering on contracts and the Non-Commercials taking profit. when you look at the COT index both sides were getting pretty close to the buy/ sell extremes respectively. So, all in all what i think we will see is price drive down to the 382 of this pattern monday possibly tuesday some minor consolidation tuesday possibly wednesday and some upward movement to finish out the week. So, i suggest any shorts on any pound trades clear them and wait for another chance to sell the pound again. I say this, becasue on the Commercial short side there were no large orders indicating a drive for a change in direction and you definetly dont see the profiteers loading up on the long side for the Non-Commercials. For my friends across the pond what do you guys have going on around this time of year, becasue i would like to know for future speculation. why would any big businesses in the UK be hedging against the pound to lock in a rate? like a rainy season, or dry season, major crop planting anything helps... thanks for reading!
TVC:BXYShort
by ARegularGuy
GBP/ USD Here on the Pound Dollar (GBP/ USD) we have an Bearish Alternate Bat pattern. Honestly i drew this pattern earlier this week and i cant remember the demensions. With the COT datat though this is an interesting pair. The dollar index is weakening and the Pound is already bearish. the current stats are (-8 867) and previous stats (-16 438) and these are the Net stats for the Commercials the current Non-Commercial are 8 258 and the previous 14 799 suggesting that the DXY is still in bullish terriroty but dramatically coming out.
Short
by ARegularGuy
GBP/ CHF On the Pound we have a Bearish Bat Pattern the top of the prz is the CD Leg max the 2.618 and the 886 is on the lower side. we see that price shot right through the PRZ and created a big wick PA came right to the HOP level of this pattern and was rejected. i wanna see the RSI go a bit lower and i do wanna see the HSI on the other side and in the upper extreme coming down. the COT Fundamental side of this is the Pound is losing strength becasue the commercials are building more orders on the long side which means price is driving lower and the Non-Commercials are driving the bus lower. With the open interest increasing. the CHF is gaining strength so i would like to hold this trade and ride the wave down. i watched this pair all week and broke even on my smaller pattern. it almost hit my TP1 and now waiting for the re-entry off this pattern.
Short
by ARegularGuy
Up Comming week COT analysis COT Data CHF- Commercials have relieved their long positions giving rise to more producers (shorts) to move around. We had some commercials close their positions, but there were no more entered afterward. The shorts are still providing fuel to the Non-Commercials to drive prices higher and the Non-Commercials are happily taking the supply. There were 1280 new orders opened for the CHF with 747 of them coming from the Commercials adding to their short hedges. In regards to the net positions this is what I was looking for last week. On the COT index the major players just switched sides and I was wanting to see both sides add to their bias to kinda confirm what we see. in regards to net positions the commercials are Current (7754) coming from (6,846) this increase will provide more supply on the market driving price up as the producers are in charge at the moment. The non-Commercials are at 8989 coming from 8739 its only a mere 250 order change so it might seem like buying is drying up, and it very well could be but on the line items the shorts took off 132 orders (not adding Open interest) while the Longs added 118 orders (which will add to the Open Interest). So in a nut shell we see the CHF producers from the Commercials still producing so the Non-Commercials might be a bit slow to buy leaving it up to the non-reportables to save the day LOL. GBP- On the Pound the Commercial Consumers are still in control forcing the Pound to become cheaper. This is not some commercials delivering product and closing contracts there were 1488 added to the open interest. The Commercial Consumers added 12377 new order their long bias while the producers only added a 1/4 of that. Surprisingly 12,000 orders came off the table on the Non-Commercial side going from 39,000 orders to 26,000 orders while the shorts are still driving down price with 63,000 orders coming from 61,500 orders. When you look at the net side of things the Commercial Consumers are still buying up supply while the Non-Commercials are still driving price down. It takes along time for the big curriencies to turn around but I would expect to see some of the GBP major Pairs start to consolidate or turn around. CAD- The United States’ Unofficial but Official supplier of oil. When you look at the Export of oil from Canada on the invoice it says US. The CAD Dollar is in a very interesting place right now the Commercial are about to be battling it out of control and this is probably why the Non-Commercials have both closed positions without re-entering the market. The Commercial Consumers added 1100 positions to their already existing 77,000 orders while the Commercial Producers have added a whopping 4961 orders to their side driving up thier 41,000 to 46,000 while the Non-Commercial shorts took off 2800 orders and the longs took off 2000 orders. The Non-Commercial Shorts are still driving price down but the COT index is nearing the Zero line so we might be seeing a trend change which is something we can see with oil. The Black Gold has been slowly gaining value but it has struggled in the past few weeks. JPY- Japan is the world leader in exporting electronics supplying the whole world with just stuff. and knowing that the conductors in the electronics use platinum or palladium I suspect as the precious metals begin to rise again so will their economy , not including the uses of the metals in emissions pieces in vehicles which Is japans #1 export. What we have is the Commercials delivering on their contracts and not opening up any more so we might be seeing a trend change to support my “theory” (which is a very cavalier way of using the term) but we see the non-commercials still buying up the supply still available driving their orders from 57,000 to 62,000. We also see the Non-Commercial shorts want to play as well coming in from 23,000 to 29,000. This is probably stalling the yen a bit but I do think we are gonna see the yen get stronger here in the next few weeks if not months. But the Commercial Shorts are still by far in control with 100,000 orders short. Driving the yen up. I suspect the yen is not as strong as it should be is because the non-commercials are a bit hesitant to buy. Eur- the Euro is strong as he**. Selling the Euro is probably not the wisest moves as a trader unless you’re a hedger. The Open interest increased by 26,000 orders and the Shorts are 429,000 orders short driving the Euro up through the roof. Some of the Non-Commercials booked profit on the long side and Some of the Non-Commercial shorts booked some losses. The Euro is a strong buy at this point in time. The Supply is out there. There is a nice Eur/Nzd Trade I have been waiting on to get in and this Report gives me a better feeling about it. NZD- if you did not know the Kiwis are some cowboys with the majority of thier economy coming from cows, pigs, and other food products. This is probably why their nickname is “Kiwi” anyways the Kiwi is getting stronger and I might have to wait on my Eur/Nzd trade until the Kiwi weakens the longs closed out 1400 positions while the shorts added 1400. Same story on the non-commercials 2100 orders were put into the Kiwi Longs driving the currency higher. But I do have a hard time thinking the Kiwi is really out muscling the Euro but the candles don’t lie. But good news is Both sides are drawing nearer to the Zero Line… so the trade could be happening sooner than later. This is all for the COT Analysis for this coming week. I’m keeping some out for myself but here are the Major pairs and their reports as I see them Good Luck!
TVC:DXYLong
by ARegularGuy
NZD/ USD I am still posting Part 2 of my COT Analysis. However, we have a bearish Deep Gartley that I charted what seems like months ago! the 886 lines up with the 88 swing point and the lower and the lower part of the PRZ. PA has tested the whole PRZ the HSI and AMP RSI are both at extremes. the HSI has conducted it checkback and now im waiting for the floor to open up. now the Fundamental Analysis: As I have stated in my previous analysis the Dollar Index by the COT is a bit stalled but it could be the Commercials and the Non-Commercials closing positions as the Open Interest is drawing down. the 30 year Bond Yield still has plenty of room to move up... However the Kiwi is still out weighed by the Commercials buying... however, the Non-Commercials are still selling the NZD but its slowing down too.
Short
by ARegularGuy
DXY (COT Analysis)Okay, here is the DXY or the Dollar Index. Part 1... This post is going to be quite long as it is going to serve as the post that introduces something im gonna try and update weekly. the COT Report. Now, i had no idea what the COT report was until i watched and looked at a very popular, here on TrdingView, trader's charts and saw his very useful indicator! I did my own research and thanks to another popular trader, again here on tradingview, who helped tremendously with providing some very useful resources i was able to learn about the COT. Now Here is going to be a trial, mainly for my own reference, to track which pairs too look out for. So without further wait: the USD Bias- Undecided Commercials - current== (16 438) and the previous == (18 407) Non-Commercials- Current== 14 799 and the previous== 17 297 Open Interest - current == 28 298 and the previous == 31 477 What does this mean? This means the Dollar is stalling right now. The open interest went down which suggests that both sides closed out positions without opening up new ones. the non commerciasl are still selling and the non-commercials are still buying which is giving us the slight rise in PA. However on the COT Index the Gap is closing between the Commercials and Non-Commercials., nd both sides are nearing the Zero Line. the last time this happened the Dollar fell to 86-87. This might be just a profit taking session to give the DXY a slight rest as the 30 year bond rate on the COT index the Commercial failed to take out their previous buying high set in april, so we could see bond rates go lower while the interest gets a bit higher attracting more investors into the American economy! The Euro Bias- Moderate Buy! Commercials- Current== (-106 256) previous ==(-102 594) change == (-3 662) Non-Com- Current== 75 222 previous== 72 562 change ==2 660 Open interest- current== 556 749 previous== 547 206 change== 9 543 What this tells us is that the Commercials are still selling to the Non-Commercials and this is deduced from the increase of the Open Intrest. The euro makes up ike 56% of the DXY and this currency is a moderate buy! now what i want to see is another increase in long orders so the COT index exceedes the current Buy level. Its no Seceret that Germany is the Back Bone of the Euro providing 20% to the Union Budget followed by France and the UK at 15%. Now Germany's main Export are cars and other electronics and Platinum and Palladium are main metals for those as they provide for conduction in the electronic compntes and for emission parts on cars. Both metals took a hit in price and Commercial and Non-Commercials have relieved both sides during COVID-19 making both metals cheaper. now when the economy opens back up i would not be shocked if the main compaines that make these pieces of equipment and cars to buy a surplus to Hedge their physical position causing a slight dip initially in their profit share only to expand in the long run causing the Euro to grow stronger as Germany offers more to the Union Budget. To Be Continued...
TVC:DXYLong
by ARegularGuy
EUR/ JPY (COT Trial) So, Here on the Euro/ Yen (EUR/ JPY) we have a Bat Pattern that PA has tested and bounced right out of it. Its quite a big pattern so it carrys some good weight. i have included the 1.27 abcd over extension which is toward the top of the PRZ and the 1618 and the ABCD pattern completed at the same spot. And the 886 is somewhere in the middle! so now on to the fundamental analysis part...(COT Trial) ------------------------------------------------------------------EURO COT REPORT --------------------------------------------------------------------------------------------------------- Non-Commercial Commercial Total. Non-Reportable Long Short Spreads Long Short Long Short Long Short 167,756 95,194 6,820 295,367 397,961 469,943 499,975 77,263 47,231 Changes (Change In Open Interest: -123 ) -4,224 +1,354 +332 +997. -2,866 -2,895 -1,180 +2,772 +1,057 (CONTRACTS OF EUR 125,000) Open Interest: 547,206 ------------------------------------------------------------YEN COT REPORT ----------------------------------------------------------------------------------------------------------------- Non-Commercial Commercial Total Non-Reportable Long Short Spreads Long. Short Long. Short Long Short 52,038 24,568 1,381 71,027 98,736 124,446 124,685 23,529 23,290 Changes (Change In Open Interest: -5,395 ) -4,269 -3,802 -30 -1,333 -2,863 -5,632 -6,695 +237 +1,300 (CONTRACTS OF JPY 12,500,000) Open Interest: 147,975 So here we have the COT reports of both pairs and again i pull this information off tradingster.com! so what we have is the hedge funds attempting to move the euro up with 164,xxx orders with another 24,xxx orders going against the Yen bringing the total to 188,xxx orders favoing the Euro or Against the Yen. Conversley, we have 95,xxx going against the Euro and 52,xxx orders favoring the yen (downward movement on the chart) bringing th total orders to 147,000 orders supporting the yen and going against the Euro. So, With this particular pattern i think with the way PA is looking now and the way the COTs are looking heavily favoring the Euro i could see PA coming back this week and retesting the PRZ and maybe even testing the Harmonic Optimal Price level before giving way to the Commercial traders and their whopping 400k orders short along with the yens 124k longs. this pattern will be very interesting to see how this COT trial plays with this pair!
Short
by ARegularGuy
1
AUDCHF Market Analysis In this analysis, from a weekly perspective the market had made a impulse move to the downside and corrected it with what seems like a W formation, from this I would like to see it go back to the neckline at least. It started rejection on the .786 Fib level, also with co relation to the COT (commitment of traders) report showing signs of the pair moving to the downside. Leave feedback let me know your thoughts on the analysis and if I missed anything or done anything wrong.
Short
by Explicit_Fx
3
Commercials - Guys who KNOW! EDU VIDEO HOW TO USE IT $$$Hi traders, I have decided to record the educational video about commercials because I have received very good questions that are worth answering. Thanks Michal! Commercials provide information about WHAT IS GOING TO HAPPEN . Price Action is used for timing. That´s the biggest difference between those two worlds. I also describe how to set the COT Index and how to use it if you are a BEGINNER. You have to understand that connecting PA and Commercials rapidly increases the WIN ratio. Commercials are used for creating the watchlist for the upcoming week. Price Action finds the best entry point. I hope you will like the video. Thank you for your time. Good trading, Jakub FINEIGHT
ICEUS:SB1!
by Fineight
4
Will UJ breakout?Why I assume it won't breakout for a while, atleast for not this week 1. H1 charts shows that the downtrend is over extended, it has moved 4 waves to the downside. 2. H4 divergence on the stochastic. I assume the market will consolidate for a while However the CoT report from CFTC released last week shows the Non- Commercial(Hedge Funds) are LONG on Yen and are closing their SHORTS. Therefore I assume that the market will continue to the downside, may be next week. But still I am waiting for CoT report which is going to come this week for added confirmation. (Note: The report on the chart is from Commodity Futures Trading Commission) Please let me know what you guys think. Thanks for reading this. Happy Trading
by AtitPatel
EURUSD, Weekly - short squeezeRecently the large speculators has significantly reduced the short positions in the euro futures market. This seems to be a huge change in the positioning of the important market participants. This may suggest that the recent downward trend in the euro fx may be ended. This type of switch in positioning is a rare phenomenon so it could worth paying attention to it. ________ Daniel Kostecki, Chief Analyst Conotoxia Ltd. Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CME:6E1!
by Daniel_Kostecki
1
Commitment of traders reportWHAT IS IT The Commitment Of Traders (CoT) is a report issued by the Commodity Futures Trading Commission (CFTC) , one of the most important trading insitutionsof the American government. The report has the purpose of transparently showing market dynamics to the all the people involved or interested in the matter. The COT report show all currently open positions (open interest) of the future and options market, where 20 or more traders hold positions for an amount greater or equal to the minimum amount amount established by the CFTC . The report is issued every Friday at 3:30 P.M. (Eastern Standard Time, hence UTC-5). Each report normally contains data until previous Tuesday. CFTC usually receives data on Wednesday morning from the reporting firms (i.e.: Future Commission Merchants, Financial Insititutions, Brokers or International Stock Exchanges). After some verifications, CFTC publish data the following Friday. For each market, data are provided in terms of existing (still open) LONG and SHORT positions. TYPES OF REPORTS There are 4 types of report: 1) Legacy It contains data split by stock exchange. This report has two different variants: "futures only", that contains data related to the futures market only, and "combined", that contains aggregated data for futures and options market. All the reported positions in this report are split in two main market actors categories: Commercials (or Large Speculators) and Non-Commercials 2) Supplemental It includes contracts related to 13 selected agricultural market commodities. This kind of report split positions in 3 market actors categories: Commercials (or Large Speculators), Non-Commercials and Index Traders. Differently from Legacy report, the Supplemental is provided in the "combined" format only, hence contains data for both futures and options market 3) Disaggregated This report contains the same data issued in the Legacy report, but with a more detailed drill down in terms of representation. First of all, it presents data split in 5 macro-categories: Agriculture, Petroleum and Products, Natural Gas and Products, Electricity, Metals and Other. Moreover, the report shows open positions/interests of 4 market actors categories: Producer/Merchant/Processor/User, Swap Dealers, Managed Money e Other Reportables. Aggregating data of this report, it is possible to obtain same data of Legacy report, hence this is a detailed view of data contained in the Legacy report. The Disaggregated, as well as the Legacy one, is available as "futures only" and "combined" variants 4) Traders in Financial Futures (TFF) This report includes contracts related to currencies, US Treasury Bonds, Eurodollar deposits, VIX shares and Bloomberg Index only. The reports shows open interests of 4 market actors categories: Dealer/Intermediary, Asset Manager/Institutional, Leveraged Funds e Other Reportables. Last, also this report is available as "futures only" and "combined" variants REPORT FORMATS Legacy and Disaggregated reports are provided in two formats: short (synthetic) and long (extended). Both these formats contain same data, but long format contains also the concentration of open positions in the hands of the major 4 and 8 market investors at the moment of data collection, while short format does not contains any data about concentration. TFF report is available in long format only, while the Supplemental is available in the short format only. Report type Scope Format Futures Combined Long Short Legacy ✓ ✓ ✓ ✓ Disaggregated ✓ ✓ ✓ ✓ TTFF ✓ ✓ ✓ X Supplemental X ✓ X ✓ Legacy report As said above, market actors in Legacy report are divided in 2 categories: Non-Commercials , or Large Speculators : they are market speculators as well as hedge funds. This category normally uses financial leverage to amplify variation of derivative asset and has an aggressive behavior in the market. They use rigid stop loss policies and, when the market falls below certain levels, they reverse positions on the other side. The main purpose of Large Speculators is not the asset they buy or sell, but to obtain a net profit from the buy/sell cycle. They normally have a trend following behavior. Commercials buy futures just because they are interested in the underlying asset and try to hedge their financial exposition related to the commercial activity with the assets they are interested in. These market actors hold more than 50% of open positions in the US futures market and normally they go against the price trend: they sell when the market goes higher and they buy when the market goes lower. Their positions on underlying assets normally anticipate market trend, hence they should be carefully monitored Non-Reportable : are the open position of small investors/traders that normally are on the wrong side of the market. This investors category is usually confused and not disciplined. They do not follow precise rules and are usually dragged by the trend, but they are slow to reverse positions when the market trend reverses. The following example contains data about "futures only" market for BUTTER, coming from Chicago Mercantile Exchange. BUTTER (CASH SETTLED) - CHICAGO MERCANTILE EXCHANGE Code-050642 FUTURES ONLY POSITIONS AS OF 03/17/20 | ----------------------------------------------------------------------------------| NON-REPORTABLE NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS --------------------------------|---------------------|--------------------------|----------------- LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT -------------------------------------------------------------------------------- (CONTRACTS OF 20,000 POUNDS) OPEN INTEREST: 11,597 COMMITMENTS 0 2,473 453 10,401 8,149 10,854 11,075 743 522 CHANGES FROM 03/10/20 (CHANGE IN OPEN INTEREST: 753) 0 -127 101 675 796 776 770 -23 -17 PERCENT OF OPEN INTEREST FOR EACH CATEGORY OF TRADERS 0.0 21.3 3.9 89.7 70.3 93.6 95.5 6.4 4.5 NUMBER OF TRADERS IN EACH CATEGORY (TOTAL TRADERS: 47) 0 12 10 28 22 38 34 It is possible to see as in the report is provided the total amount of LONG and SHORT positions for Non-Commercial, Commercial and Non-Reportable actors. Variations from previous week are moreover reported. In addiction to LONG and SHORT positions, Legacy report contains also the SPREAD amount, that is available for Non-Commercial only, and refers to contracts that are opened LONG and SHORT at the same time. Normally a growing SPREAD value means a high level of uncertainty. If we calculate NET POSITIONS (NP) for the 3 actors categories, as it's easy to check, the report show a zero-sum scenario: NP Non-Comm = 0 – 2,473 = - 2,473 NP Comm = 10,401 – 8,149 = 2,252 NP Non-Rept = 743 – 522 = 221 NP Non-Comm + NP Comm + NP Non-Rept = -2,473 + 2,252 + 221 = 0 OPEN INTEREST value is the grand total resulting as the sum of LONG, SHORT and SPREAD positions: Open Interest = 0 + 453 + 10,401 + 743 = 11,597 Supplemental report Even the Supplemental report (called also Commodity Index Traders - CIT) shows data in the same manner of Legacy report, but the market actors are 3: Non-Commercial, Commercial and Index Traders. Non-Commercial and Commercial actors are the same, while Index Traders category has appeared for the first time in January 2007. Before that date, investors that are now reported in this category were scattered in the two existing categories (Non-Commercial and mostly in the Commercial). The creation of Index Traders category has had the purpose to separate that category from Commercials, because Index Traders are not involved in the buy/sell cycle of underlying assets, and are usually managed funds, institutional investors or swap dealers. Index traders are normally interested in passive and longstanding LONG positions, while are not interested in the short-term price fluctuations. It's not unusual that this category start buying when price is falling and technical analysis says that the price falling will be even more deep. Index Traders are hence a counter-part of speculators, who have usually a contrarian habit. Supplemental report is provided for 13 commodities: • WHEAT-SRW - CHICAGO BOARD OF TRADE • WHEAT-HRW - CHICAGO BOARD OF TRADE • CORN - CHICAGO BOARD OF TRADE • SOYBEANS - CHICAGO BOARD OF TRADE • SOYBEAN OIL - CHICAGO BOARD OF TRADE • SOYBEAN MEAL - CHICAGO BOARD OF TRADE • COTTON NO. 2 - ICE FUTURES U.S. • LEAN HOGS - CHICAGO MERCANTILE EXCHANGE • LIVE CATTLE - CHICAGO MERCANTILE EXCHANGE • FEEDER CATTLE - CHICAGO MERCANTILE EXCHANGE • COCOA - ICE FUTURES U.S. • SUGAR NO. 11 - ICE FUTURES U.S. • COFFEE C - ICE FUTURES U.S. Disaggregated report Market actors of Disaggregated report are: Producer/Merchant/Processor/User : they are involved in production, handling, packaging or transport of physical assets that is underlying to the future instrument or option. These actors use futures to cover/hedge risks associated to the activities they are involved in that are strictly related to the production of the assets Swap Dealers : they are subjects that are involved in trading swap contracts related to the commodity and uses futures market to cover/hedge risks associated with swap transactions. The counterpart of a Swap dealer could be a speculative traders, as well as an hedge fund, or a more traditional Commercial subject that is interested in managing risks associated with the commerce activities of the asset Money manager : to this category belong Commodity Trading Advisor (CTA), Commodity Pool Operator (CPO) or an unregistered fund identified by the CFTC. These subjects are delegated from their clients to do financial operations in their behalf Other Reportable : all speculative traders that are not belonging in the three previous category are included in this category Even in this case, the report shows LONG, SHORT and SPREAD positions. Comparing this kind of report with Legacy, we can see that: COMMERCIAL = PRODUCER/MERCHANT/PROCESSOR/USER + SWAP DEALERS NON-COMMERCIAL = MONEY MANAGER + OTHER REPORTABLE This explains why the report is called "disaggregated". It shows the same data but with a more level of detail especially regarding the actors that hold open positions. If we take the Disaggregated report about BUTTER for the "futures only" market coming from Chicago Mercantile Exchange (equivalent to the previous example that is showed under the Legacy report section, we see: :------------------------------------------------------------------------------------------------------------------------------------------------------ : : Producer/Merchant : : : : : Processor/User : Swap Dealers : Managed Money : Other Reportables : : Long : Short : Long : Short : Spreading : Long : Short : Spreading : Long : Short : Spreading : -------------------------------------------------------------------------------------------------------------------------------------------------------- BUTTER (CASH SETTLED) - CHICAGO MERCANTILE EXCHANGE (CONTRACTS OF 20,000 POUNDS) : CFTC Code #050642 Open Interest is 11,597 : : Positions : : 8,893 6,326 1,048 1,363 460 0 301 180 0 2,172 273 : : : : Changes from: March 10, 2020 : : 244 648 324 41 107 0 -12 -8 0 -115 109 : : : : Percent of Open Interest Represented by Each Category of Trader : : 76.7 54.5 9.0 11.8 4.0 0.0 2.6 1.6 0.0 18.7 2.4 : : : : Number of Traders in Each Category Total Traders: 47 : : 24 18 . . 4 0 . . 0 10 9 : --------------------------------------------------------------------------------------------------------------------------------------------------------- If we take the categories Producer/Merchant/Processor/User and Swap Dealers and we sum all LONG positions and then subtract all SHORT positions, we obtain an overall NET positions like this: NP = (8,893 +1,048 + 0 + 0) - (6,326 + 1,363) = 2,252 Now, if we do the same calculation for Commercial category of the correspondent Legacy report (see above) we obtain: NP = 10,401 - 8,149 = 2,252 This is the confirmation that Disaggregated report contains the split of data reported in the Legacy report, where Commercial category is divided in Producer/Merchant/Processor/User and Swap Dealers. Same calculation would demonstrate that Non-Commercial category in the Legacy report is spitted here in Managed Money and Other Reportable categories. If we now consider the Disaggregated report and we sum all LONG positions and then we subtract all SHORT positions for each actors category, we obtain: (8,893 + 1,048 + 0 + 0) – (6,326 + 1,363 + 301 + 2,172) = 9941 - 10162 = -221 Given that the grand total should represent a zero-sum scenario, e can deduce from Disaggregated report that net position of Non-Reportable subjects should be +221, hence a net LONG of 221 contracts, and that is correct, in fact it is possible to obtain the same result from correspondent Legacy report (see above) by subtracting net SHORT position for Non-Reportable actors to the amount of net LONG positions for the same actors. Hence Disaggregated report allow us to calculato also net position of Non-Reportable, even if the data do not explicitly report the value. Traders in financial futures report This report is a further view on the market and split market actors in two sides (SELL and BUY) and 4 categories: SELL SIDE Dealer/Intermediary : are financial intermediaries who earn by the commissions related to the sell of financial products. Big banks and other financial entities are involved in this activities BUY SIDE Asset Manager/Institutional : they are insitutional investors, including pension funds, insurance companies and investment portfolio managers whose clients are mainly institutional entities Leveraged funds : these are typically speculative funds (hedge funds) and various types of money managers, including the Commodity Trading Advisors (CTA) and the Commodity Pool Operators (CPO) not necessarily registered by CFTC. These subjects can be involved in hedging strategies and arbitrages on their own capital, or even third parties capital Other reportable : these are all the traders that are not included in previous categories Differently from Disaggregated report, the TFF report the positions of the mentioned actors categories are not an exact disaggregation of Commercial and Non-Commercial positions reported in the Legacy report. Here each actor belonging to one of the categories mentioned above could belong to the Commercial or the Non-Commercial category in the Legacy report, basing on the decision that CFTC takes during the report creation, that can be different time after time (i.e.: a subject that has already been considered a Commercial one in the beginning, can be shifted to Non-Commercial after a while, depending on the specific activities he is involved during the time, that can change as well). The TFF report is moreover available only in the LONG format REPORT ANALYSIS If we properly analyze data in the Commitment of Traders legacy report, we can determine the expectations of each market actor category regarding the market future. The possibility to know the net positions of Commercial subjects (institutional investors) is the basis to understand the market sentiment. Their influence is, in fact, between 50% and 75% of the entire futures market of S&P500 and from 40% and 60% of Nasdaq100. It is useful to point out that Commercial subjects, as well as the Non-Commercial, can take arbitrage or hedging positions, or, alternatively, put in place an active management of their portfolios by buying or selling futures on foreign (not US) markets, or, again, have open position on the futures' underlying assets and protect themselves from risks of price variations by taking opposite positions on the futures market. Hence the Commitment of Traders Report is an important thermometer to measure US stock exchange sentiment, but it isn't a tool that, alone, can allow us to predict how financial markets will move. It should be used (as usual) together with other indicators, tools, analysis and perspectives to have a better understanding of what is happening and a good approximation of what is going to happen (most likely). Commercial subjects are active actors in the futures' underlying asset market and generally sell when the market (price) grows and buy when the price is more convenient (low), hence their activities are contrarian to the logic of speculators. For this reason the Commercial actors are often responsible of market moves and trends. They drag prices and the market with their activities, hence they anticipate and determine the market trends. Non-Commercial subjects, viceversa, have opposite interests. They want to make money by price variations, hence they buy when the market shows growing prices and sell in the opposite conditions. This behavior is what we call "trend following" approach. Here are some typical scenarios that we can find by analyzing the Commitment of Traders report: 1) If Non-Reportable actors (small/retail traders) are LONG and Commercial are SHORT, the Non-Reportable actors are most likely going to loose money because the price will go to to the side where Commercial are pushing it (down) 2) On the maximum levels of an asset price (i.e. near significant RESITANCE levels), Non-Reportable are likely pushed to SELL their positions. Then stop loss levels are likely hit and only after the price starts his falling stage 3) If Non-Commercial are LONG and Non-Reportable are SHORT, we are likely in the middle of an UPTREND and there is more space for the price to gro further 4) If Non-Commercial are LONG and also Non-Reportable are LONG, we are likely in the "euphoric" phase of the trend, hence the trend is going to finish soon 5) If Non-Commercial are SHORT, Non-Reportable are upgrading their SHORT positions and Comemrcial slow down their LONG positions, e re likely in the terminal phase of a downtrend If we accept the hypothesis that Commercial traders hold better information on the market than the others just because they are active actors of the futures' underlying assets (it's their own business!), it is very important to monitor their behaviour in order to understand how they are evaluating the situation related to the specific commodity that is at the center of our interest. Commitment of Traders Index An interesting approach to have effective insights from the Commitment of Traders report can be obtained by calculating an index using the report data. Normally Comemrcial net positions are used to calculate the index as follows: NP (Net Position) = Long Positions – Short Positions Usually, an interval of 26 periods (weeks) is selected and the calculation to determine the index value is: COT Index = * 100 The index, expressed as a pecentage value from 0 to 100, reflects net position of Commercials on the basis of last 26 periods. It can be used as an indicator of overbought and oversold zones and can be a good tool to understand where investors are moving. The index can be also calculated for Non-Commercial or Non-Reportable positions. Last, but not least, remember that Commitment Of Traders report is released every Friday evening, but contains data up until previous Tuesday, hence a "lagging" effect should be seriously considered in all the analysis that involves it. The content of this article has solely education purposes and should be not considered trading or investement advise.
Education
by Marco_it972