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 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 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 considered 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, comprises hedge funds, mutual funds, and commodity trading advisors. These speculative traders 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.
DeMark Indicators basics at the bottom of this note
Highlights and themes
- Several weeks ago, there were DeMark exhaustion signals on the US dollar on the upside on the daily and weekly charts
- “Was this the top” was the question after several short-lived reversals. Now it’s looking more pronounced as a top.
- Now there are continuation Sequential trend Countdowns in progress that could see recent trends continue lower for the US Dollar and upside for crosses
- Crypto remains depressed despite a few downside exhaustion signals on the daily charts
Currency Sentiment Overview
Currency sentiment highlights show the US Dollar back under 50% and a recent breakdown under the one-year support level at 60% bulls.
US Dollar Indexes
DXY US Dollar Index daily now has a Sequential Countdown in progress and can go lower or sideways from here. There will be people watching the 200 day moving average.
DXY US Dollar Index weekly could see a buy Setup 9 in December if the pattern continues. To complete the weekly Setup 9 there must be nine consecutive weekly closes lower than the close four price bars earlier. If this pattern is interrupted the Setup will cancel and disappear from the chart
US Dollar bullish sentiment with a new one-year low breaking below the support at 60% that held all year.
US Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Bitcoin and Ethereum
Bitcoin Daily did get some buy signals recently with no response. The Weekly still has a Countdown’s in progress.
Bitcoin Bullish Sentiment has been depressed since May.
Ethereum Daily with a recent buy Setup 9 and the weekly still has a pending Sequential in progress
Major USD Crosses
EURUSD Euro / US Dollar is at the 200 day for the first time in quite a while. The Sequential in progress is more important to see if this can continue.
Euro bullish sentiment is at 50% and trying to move higher
Euro Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
GBPUSD British Pound Sterling / US Dollar with a very similar chart as others with the Sequential in progress
British Pound Sterling bullish sentiment improving over 50%
British Pound Sterling Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
AUDUSD Australian Dollar / US Dollar also with a Sequential in progress
Australian Dollar bullish sentiment has 50% as resistance
Australian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCAD US Dollar / Canadian Dollar
Canadian Dollar bullish sentiment with higher lows but failure below 50% has happened a few times in the past 6 months
Canadian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCHF US Dollar / Swiss Franc consolidating?
Swiss Franc bullish sentiment also shows a failure at 50%
Swiss Franc Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDJPY Japanese Yen consolidating and could continue the trend this week.
Japanese Yen Bullish Sentiment with a higher low
Yen Commitment of Traders
RISK On Risk Off
This cross is often used as a risk-on / risk-off indicator
EURAUD Euro / Australian Dollar
New Zealand Dollar
NZDUSD is a little further along in the Sequential Countdown
New Zealand Dollar Bullish Sentiment is overbought now
New Zealand Dollar Commitment of Traders
Three major Yen crosses
EURJPY Euro / Japanese Yen
GBPJPY British Pound Sterling / Japanese Yen
AUDJPY Australian Dollar / Japanese Yen
US Dollar vs Emerging Markets
USDTRY US Dollar / Turkish Lira
USDBRL US Dollar / Brazilian Real
USDMXN US Dollar / Mexican Peso
Mexican Peso bullish sentiment
Mexican Peso Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDZAR US Dollar / South African Rand
USDCNH US Dollar / Chinese Offshore Renminbi (Yuan)