Commitment Of Traders Reports

Comments

1. anna says:

   February 22, 2009 at 1:38 pm

   Hi Doug

   Many thanks for your question and I will try to explain as best I can which I hope answers the question. In essence I use the weekly COT data in three ways. First of all I use it as a sentiment indicator, then as a momentum indicator, and finally as an extreme indicator. In other words, what is the sentiment in the market, bullish or bearish, where is the money going, long or short, and when have we reached the extreme points which may indicate a turning point. For the first I use the difference between the long and short positions for the non commercials which provides the net long or short position on the week which are then plotted – a 4 week trend in positive or negative territory suggests a change in the sentiment. As you mentioned I then use changes in Open Interest to identify volume or momentum in the move. Finally we go back to look at our non commercials again and look at the extremes. Here we are looking for the extremes in terms of volume, and is based on the premise that at these points all the traders who want to trade long are already in the market, which has reached saturation. With so many speculators weighing in one direction, there is no one left to buy or sell, and the market reverses.

   The COT report can be found by clicking on the link here, http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm, and the previous weeks data can be found on the RH sidebar at the top of the page under historical reports, which I hope helps.

   I am in the process of updating the COT site in the next few weeks which will then be updated weekly with the COT data, comments, charts and videos on how to use the COT report to help with your trading, which I hope will be useful for you. Once again many thanks for your question and good luck with your trading – all best wishes Anna

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