COMMITMENTS OF TRADERS REPORT - Summary and Analysis of the US Government Report

The Commitments of Traders .com web site is set up as an "open" web site so individual pages can be viewed by anyone. The weekly updated data schedules and charts will not display unless the user is a subscriber and has a user name and password. The subscription is a $35 per month subscription paid month to month through a Pay Pal account. Click here for information about SUBSCRIBING to
www. Commitments of Traders .com and www. Stock Index Timing .com

Following is a brief review of some of the key features of this Commitments of Traders .com web site.

12 week Summary of the Net Commercial Positions.
special combined "crib sheet" summary
one year, three year and ten year weekly front month charts
individual futures only contract data files
free weekly email commentary and free weekly email report summary

12 week Crib Charts Data Email

12 Week Summary:

The single most important feature is the 12 week Summary of the Net Commercial Positions. There are summaries for both the futures only data, and the futures combined with option delta data. The summary can be found on the above navigation bar by clicking the red button above under the REPORTABLE COMMERCIAL column.

When a subscriber clicks on that button he is taken to a page that displays the current table like the following. These Twelve Week Summary tables are posted to the web site usually within 30 minutes of the release of the COT data by the CFTC each Friday evening at 3:30 eastern time. The table for the "Net Commercial Positions Combined with Options" is emailed to subscribers at about the same time that it is posted to the web site.

The table shows the last twelve weeks of net data for the selected commodities and the one year, three year, and five year ranges of the data. When the reported net number is within 95% of the five year range extremes during the current or previous five weeks it is highlighted in either green or red. When the reported net number is within 95% of the one year or three year range of the data during the current or previous five weeks it is highlighted in yellow with an I or III (-I or -III) following the number to indicate near the one year or three year range of the data.

Supplemental Commodity Index Trader data is also available in this web site. Each week a summary of the report is prepared and the data since publication is plotted over the weekly chart of the covered commodities.

Special note to Market Professionals:

The 12 Week Summary of Net Commercial Positions available to subscribers of this web site is a special tool that market professionals should consider. In one quick scan, the reviewer of the 12 Week Summary of Net Commercial Positions can make a broad statement about the "macro" condition of the commodity markets and the overall economy.

If you view the "heavy" net commercial positions as a net statement of market value, you can quickly conclude that when the net commercial position is highlighted in red that such markets are overvalued. (Red highlight indicates the net commercial position is near the largest net short in the last five years.) Further, you can generally assume that the trends of such markets have been rising for some time.

If the net commercial position is highlighted in green you can conclude that the market is under valued. (Green highlight indicates that the net commercial position is the smallest short hedge, or the largest net long hedge in the last five years.)

When you make a broad view of the total table, you can conclude something about the metals, interest rates, stock market, currencies, and agriculture.

Here is a clip, as of 12/5/06, of the "net commercial positions combined with options" table.

Copper is showing some net hedger buying. Hard to believe it is cheap, must be year end inventory adjustments.

Eurodollars and Bonds have heavy shorts suggesting firm interest rates.

Stock Index heavy shorts, suggesting an overvalued stock market, and possible anticipating firmer interest rates.

Currencies have heavy shorts, suggesting a stronger dollar (from firming interest rates?)

Grains have heavy shorts suggesting the grain market is overvalued (and anticipating a stronger dollar?)

Do you see the benefit you can gain from just a quick review of the items highlighted in the 12 week summary of net commercial positions?

When you make broad comments about the markets based on the highlighted items, your not necessarily saying the trends in place are going to reverse immediately. But your statement of "over value or under value" can be made with confidence saying it is based on what the professional users and producers are doing that use futures to hedge risk.

I hope you consider subscribing to this web site. Thanks! George

The table is designed to allow you to take a simple quick look at about 35 markets to see which markets have net commercial positions that may be significant to your analysis of the market. All you need to do to get a quick review is look at the listing of commodity names and note the highlights. In the following table, the currencies generally have net commercial position neat the five year record net short (items highlighted in red.) Further, many of the grains are highlighted in yellow and the "-I" in the data column indicates they have net commercial short positions near the largest net short of the last one year.

Similar tables are prepared for the large trader non hedger positions and the net small spec positions and can be found by clicking on the navigation bar buttons at the top of the page.

Generally, one year, three year, or five year record or near record net commercial positions are considered a broad statement by the producers and users of the market as being under valued or over valued. Most often, the large trader non commercial (large speculator) has a position opposite the net commercial position. This is because the large trader tends to be a trend follower, and in most markets trends are driven by the trend followers are far as they can go. Knowing this can be a valuable tool in evaluating when a market trend might change. Powerful market turns can develop when the short term large spec trader sees a change in trend and tries to exit his position, because the opposite position in the hands of the net commercial tends to be a longer term position.

Sometimes, the large net commercial position is opposite a near record small speculator position. This circumstance is considered by some to be a special opportunity in that the market is at an extreme value and the generally undercapitalized small trader is holding the opposite positions.

12 week Crib Charts Data Email

"crib sheet":

This web site has a special combined summary "crib sheet" that can be linked in the lower right hand corner of the navigation bar at the top of the page.

This link will bring you to a page that pieces together just a few columns of the twelve week summaries to let you make a quick review of the net commercial positions and the large non commercial positions and the small (non reportable) trader positions.

In the following you can see that the net commercial position is near the largest net long in the last five years (highlighted in green with a roman numeral "v" next to the data point.) The small spec has his smallest long side position in the last five years. (Identified by a "-V." Obviously this means that small spec is almost always long, and the current position is a small net short, but near the smallest long side position by the net small spec in the last five years.) Further, three weeks earlier the Large Spec had near his largest net short in the last five years. This says the trend of the Canadian $ has been driven down to a level that could be considered cheap based on the large net hedger net long position, and a change in trend could create a powerful market movement from this undervalued, obviously over sold position.

Some of my subscribers have told me they use this schedule to help identify markets to make longer term option trade positions. Particularly, when the net commercials are "in the green" because that suggests low prices and option premium volatility in commodities tend to be cheap at market bottoms (and expensive at market tops - generally opposite the typical stock market option valuations of low volatility at tops and high volatility at bottoms.)

Following is a portion of the special "Working Combined Crib Sheet" showing how the clips of the larger summaries are set side by side for easy comparative review.

12 week Crib Charts Data Email

Charts:

Another feature of this web site are the one year, three year and ten year weekly front month charts of the commodities with the COT data plotted over the chart. The link to the chart index page is in the lower left corner of the navigation bar.

Some charts, like the weekly front month Swiss Franc, are better viewed on a one year view because of the volatility of the net commercial position (Plotted over price in red. Large spec in green and small spec in brownish yellow)

Other charts, like the weekly front month Lean Hogs, have a less volatile swing in the net commercial position, and so the three year chart may provide a better review of past movement.

12 week Crib Charts Data Email

Data:

Subscribers can also access individual futures only contract data files. The link to the data file listing is on the left hand corner of the navigation bar.

12 week Crib Charts Data Email

Free email:

No paying subscription is needed to join the free email list to receive the free weekly email commentary and free weekly email report summary.

At the top of each page is the "sign up button" to join the free email list. The email list is maintained through a Microsoft email list service and the one signing up has complete control over staying on the email list. At any time you can click at the bottom of the email received to be withdrawn from the list.

A copy of the free email is also posted on a web page each week.

You can review the free email at the link on the commentary page.

First go to the Commentary page.

Then click on the free email link.

The free weekly email, usually sent by 4pm eastern, includes the following summary of the COT Report data just released.

12 week Crib Charts Data Email

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The subscription to the Commitments of Traders .com INCLUDES access to Stock Index Timing .com, The Gold Bull / Bear .com, and Beans on the Teens. com. These web sites use the Commitments of Traders data to develop market timing recommendations in the Stock Market, Gold Markets, and Grain Markets.

The Commitments of Traders .com web site is updated each Friday evening. The weekly Stock Index Timing commentary is updated each Saturday morning. The Gold commentary and Grain commentary are updated each Sunday morning.