Welcome to the Hedge Fund Telemetry Commodity Weekly note! We are very excited about this new weekly note that will be a good overview of the major commodity markets using our charts with DeMark analysis, charts of bullish sentiment, and the weekly Commitment of Traders data. We have been urged for a while by our subscribers to launch this stand-alone research product offering. We also launched a Currency Weekly note as a stand-alone product. Both of these new research weekly reports will require a separate subscription and as a current subscriber to Hedge Fund Telemetry, we have discounted the notes by 50%. These are available “a la carte” for a yearly rate of $500 each however we are offering them at $250 each. For “small institutions” and “large institutions” subscribers these reports are included in your subscription.
We will be sending this weekly to all current Hedge Fund Telemetry subscribers for just a few more weeks. If you would like to sign up now (which would be most appreciated) here is the link to find the offerings. Your discount will apply at checkout.
There are also detailed explanations of Commitment of Trader data and a DeMark Sequential primer at the bottom of this note. Please let us know your thoughts by email.
Commitment of Traders – The Basics
The Commitments of Traders (CoT) is a weekly report released by the Commodity Futures Trading Commission (CFTC). The CoT report outlines how different types of traders are positioned in the futures markets. There are two main types of traders in a CoT report: commercials and money managers.
Commercials are the actual producers and users of a commodity that use the futures markets to hedge. A commercial producer in the corn market could be a farmer who sells corn futures to lock in his selling price. Commercial traders are thought of as the “smart money” since they are in tune with the physical commodity business and likely have superior supply/demand information. The other main CoT trader type, money managers, is composed of hedge funds, mutual funds, and commodity trading advisors. These are speculative traders who have no interest in the underlying physical commodity business.
CoT data is most meaningful at extremes when either commercial traders or speculators are super net long or net short. The charts below are mostly self-explanatory by looking at the color-coded type of traders. For a more detailed explanation please see the bottom of this note.
BLOOMBERG COMMODITY INDEX DAILY AND WEEKLY
Bloomberg Commodity Index daily

Bloomberg Commodity Index Weekly

COMMODITY SENTIMENT OVERVIEW

OIL AND ENERGY
WTI Crude futures daily. Watch 73.79 as a level if broken could see a this continue lower

Brent Crude futures daily similar pattern

WTI Crude futures bullish sentiment stopped the recent move higher

WTI Crude futures Commitment of Traders shows speculators positioned long albeit they are selling some while commercials have added more long exposure

Natural Gas futures daily can’t find a bid

Natural Gas futures bullish sentiment remains overall under pressure while under 50%

Natural Gas futures Commitment of Traders shows commercials (in black) are positioned steady long with speculators selling down exposure

Gasoline RBOC futures daily

Gasoline futures Commitment of Traders shows speculators positioned long and commercials steady

Metals
Gold futures daily lacks momentum. I added a short position last week after the sell Setup 9 as it’s been good at inflection points. The quick reversal up had the risk of a Sequential starting and continuing the trend higher. This occurred and I shifted from 2% short to 2% long. I’m cognizant that seasonality is decent this time of year and also was watching the USD slightly fade. My 2% sized long now doesn’t carry a lot of strong conviction as we’ve seen so many false starts fail. I am using a very tight stop of 1785. I don’t have a longer-term strong bullish view and more of a skeptical view. I will add to my long position if last Friday’s high is exceeded.

Gold futures bullish sentiment has been knocking on 50% the majority level which was also one of the reasons I turned long.

Gold futures Commitment of Traders shows speculators slighly increasing long exposure

Silver futures daily similar thoughts as Gold. So many false starts.

Silver futures bullish sentiment improving but still under 50%

Silver futures Commitment of Traders shows speculators decreasing long exposure while commercials did not do much

Copper futures daily has resistance at 450 and above this could move

Copper futures bullish sentiment – Sorry for the price action mess. Getting futures data can be tricky. Programmers will fix this asap. More important is the sentiment has been improving

Copper futures Commitment of Traders shows speculators continue selling down exposure with commercials adding

Platinum daily

Platinum bullish sentiment remains under pressure while slight improvment

Platinum Commitment of Traders shows speculators decreasing long positioning while commercials were continued buyers

Palladium daily with Sell Setup 9

Palladium bullish sentiment stopped at 50% which has been the top several times in the past year

Palladium Commitment of Traders shows a more neutral setup for both speculators and commercials

Uranium ETF if down today could get a new Sequential buy Countdown 13

Grains
Corn futures daily with a 9-13-9 DeMark pattern and price reversal

Corn futures bullish sentiment was extreme and now under the 20 day moving average of sentiment

Corn futures Commitment of Traders shows speculators increasing longs while commercials were sellers

Wheat futures daily likely will move lower with the Sequential on day 4 of 13

Wheat futures bullish sentiment with a lower high bounce and now right at the midpoint

Wheat futures Commitment of Traders tightly wound with speculators decreasing long exposure while commercials were buyers

Soybean futures daily reversal with sell Setup 9

Soybean futures bullish sentiment was extreme at 80% and reversed

Soybean futures Commitment of Traders shows speculators increasing long positions while commercials were sellers.

Livestock
Cattle futures daily should have a sell Setup 9 today

Cattle futures bullish sentiment stalled at the 50% level and this has had a tough time remaining over 50%

Cattle futures Commitment of Traders shows speculators selling down long exposure while commercials were buyers

Lean Hogs futures daily reversal after DeMark Sequential sell Countdown 13’s

Lean Hogs bullish sentiment remains under pressure

Lean Hogs Commitment of Traders has speculators very long (and caught out). Commercials had been buyers and stopped

Softs
Cotton futures daily

Cotton futures bullish sentiment was extreme for quite a while and now has a lower high potential

Cotton Futures Commitment of Traders shows speculators positioned long while commercials did little

Coffee futures daily is holding the 50 day for now. 206.70 is the TDST support

Coffee futures bullish sentiment (again sorry about the pricing mess) has support at 50%-60% for now

Coffee futures Commitment of Traders shows speculators selling down very long positions

Sugar futures daily should work lower however the TDST support at 18.42 is important

Sugar futures bullish sentiment remains under a lot of pressure

Sugar futures Commitment of Traders shows speculators significantly decreasing long positions while commercials were buyers last week

Cocoa futures daily

Cocoa futures bullish sentiment still needs to get over 50% to show some momentum. A lot of lower highs

Cocoa futures Commitment of Traders shows speculators buying again after being sellers for weeks. Commercials were sellers last week after increasing long exposure into the decline.

Lumber futures daily (sorry no COT data for lumber) is getting late in this move

Lumber bullish sentiment whipped back to the extreme zone

DeMark Sequential Basics

MORE DETAILED COMMITMENT OF TRADERS DEFINITIONS
