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
- The US Dollar has had a very good pullback after upside DeMark exhaustion signals.
- Now some DeMark exhaustion signals are starting to trigger, and some nearing.
- US Dollar Index and Bloomberg Dollar Index both have new DeMark Sequential buy Countdown 13’s, while there are some pending Combo Countdowns that will take a few more down days.
- China’s Yuan is very close to a reversal. Japanese Yen is further away from exhaustion. Euro is a few days away and needs upside to complete the 13s. British Pound Sterling has already started to reverse.
- Crypto remains in the nothing to do category.
Currency Sentiment Overview
Currency sentiment highlights shows the US Dollar at 40%. (it actually was up from 32% the previous day – we’ve been having a data feed issue with USD sentiment)
US Dollar Indexes
DXY US Dollar Index daily did get the expected DeMark Sequential buy Countdown 13. Now upside should occur within the next 10 days. There is a Combo only on day 9 of 13 so it’s also very possible to see further downside to qualify the Combo.
DXY US Dollar Index weekly has a DeMark buy Setup 9 and could lift from here syncing up with the daily Buy Countdown 13’s
Bloomberg US Dollar Index daily similar signals
US Dollar bullish sentiment chart is correct (vs the monitor) and shows a potential higher low. Now let’s watch for a break above 50% to confirm upside.
US Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Bitcoin and Ethereum
Bitcoin Daily nothing to do here
Bitcoin Bullish Sentiment has been under pressure since May last year
Ethereum Daily ditto
Major USD Crosses
EURUSD Euro / US Dollar still has the Sequential and Combo’s in progress and I’d like to see this get the Countdown 13’s to make a stronger call for a reversal.
Euro bullish sentiment has grinded higher
Euro Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
GBPUSD British Pound Sterling / US Dollar has already started to fade with a new Sequential on the downside starting
British Pound Sterling bullish sentiment reversal down
British Pound Sterling Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
AUDUSD Australian Dollar / US Dollar did get a new Sequential sell Countdown 13
Australian Dollar bullish sentiment still looks bullish however it’s stalled here several times
Australian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCAD US Dollar / Canadian Dollar sideways
Canadian Dollar bullish sentiment remains under pressure and has not been over 50% since April last year
Canadian Dollar Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDCHF US Dollar / Swiss Franc didn’t quite get the full exhaustion with the Sequential pending on day 12 of 13
Swiss Franc bullish sentiment remains under 50% a bearish textbook pattern
Swiss Franc Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
USDJPY Daily Japanese Yen still has a Sequential and Combo in progress and I would really like to see the Countdown 13’s to make a stronger call on a reversal
Japanese Yen Bullish Sentiment improved after being under severe pressure for the past year
Japanese Yen Commitment of Traders
USDNZD New Zealand Dollar might be starting a turn now
New Zealand Dollar Bullish Sentiment has been in the extreme zone over 80%
New Zealand Dollar Commitment of Traders
RISK On Risk Off
This cross is often used as a risk-on / risk-off indicator
EURAUD Euro / Australian Dollar
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 with a Luna spike
Brazil Commitment of Traders
USDMXN US Dollar / Mexican Peso
Mexican Peso bullish sentiment has been in the extreme zone
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) could be very close to a buy Countdown 13
DeMark Sequential Basics from Bloomberg
More detailed Commitment of Traders explanation
