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. A CoT report has two main types of traders: 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 Bloomberg Commodity index on the daily and weekly time frames have both DeMark Sequential buy Countdown 13’s in play. There is a lack of strong upside momentum to push these higher, although it was a solid week overall. Crude stopped at the 200 day with a recent sell Setup 9 and a new possible upside Sequential Countdown starting. We have seen this before, so momentum is needed to kick in this week or next. Gold and Silver bounced hard this past week, which wasn’t a surprise and it could be another lower-high bounce that will fail. Copper was up this past week and needs to push higher above 400 for an upside wave 3 price target. Grains had a volatile June and could be setting up for a bounce. Livestock is overbought. Softs are mixed with Coffee, possibly ready to bounce, Cocoa remains in a strong trend, although it’s late, and Sugar could be in another lower high bounce.
BLOOMBERG COMMODITY INDEX DAILY AND WEEKLY
Bloomberg Commodity Index daily had recent DeMark Combo and Sequential buy Countdown 13s. A new sell Setup, 9 at resistance, could stall this upside here. A move higher will make a higher high and could start a new Sequential Countdown. I will update this throughout the week.
Bloomberg Commodity Index Weekly has a recent DeMark Sequential buy Countdown 13 and needs momentum to kick in which has been elusive.
COMMODITY SENTIMENT OVERVIEW
OIL AND ENERGY
Bloomberg Energy Index daily had a recent DeMark Sequential buy Countdown 13 and has turned higher stalling after a sell Setup 9 at resistance at 35. This needs to clear 35 and if so would start a new upside Sequential Countdown.
Bloomberg Energy Index still has the Sequential pending on week 9 of 13. Upside Setup on week 7 of 9 needs to complete to cancel the pending Sequential Countdown. Lacking momentum on the upside.
WTI Crude futures daily turned higher after the recent DeMark Sequential buy Countdown 13. Stalling at the 200 day. There is the potential for the Sequential on day 2 of 13 to continue the trend higher. 82.71 if the resistance level I want to see clear breaking a more important lower high.
WTI Crude futures bullish sentiment moved back above the elevated zone and backed off Friday.
WTI Crude futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators. Recent DeMark Sequential buy Countdown 13
Natural Gas futures daily struggling to get upside momentum above 3.00. Higher low wave 2 of 5 with a potential upside wave 3 price objective of 3.27 if recent high wave 1 is surpassed.
Natural Gas futures bullish sentiment struggling
Natural Gas futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Metals
Gold daily bounced after the recent DeMark Sequential buy Countdown 13. A lower high bounce is probable. I will update in the week if this clears the wave 2 as it would shift the downside wave 3 to downside wave 1 of 5 and the bounce wave 2 of 5.
Gold bullish sentiment bounced of oversold levels.
Gold futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators. On week 11 of 13 with the Sequential Countdown
Silver daily with a strong bounce leaving the Sequential pending which could cancel with the completion of sell Setup 9 this week.
Silver bullish sentiment increased off oversold levels
Silver futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators. On week 11 of 13 with Sequential upside Countdown
Copper futures daily has made a potential higher low with the Sequential on day 9 of 13 at resistance needing to clear 400 for upside targets
Copper futures bullish sentiment stalled again at the 50% level. Needs to break higher.
Copper futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Platinum daily bounced after the recent DeMark Sequential buy Countdown 13 however this could be a lower high bounce
Platinum bullish sentiment decent reversal off oversold levels.
Platinum Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Palladium daily trying to turn higher after recent DeMark buy Countdown 13’s lacking momo.
Palladium bullish sentiment trying to bounce off oversold levels. Struggling a bit.
Palladium Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Grains
Corn futures daily saw one of the craziest months in June in memory. Potential for a bounce here.
Corn futures bullish sentiment has been recently oversold with a strong bounce on Friday
Corn futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Wheat futures daily could have made a higher low. Watch and see if this can regain 700
Wheat futures bullish sentiment saw some recent whippy action. Possibly making a higher low.
Wheat futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Soybean futures daily has a DeMark Sequential in progress stalling at resistance
Soybean futures bullish sentiment back in the elevated zone after some crazy action
Soybean futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Livestock
Cattle futures daily is overbought and has ignored the recent sell Countdown 13’s
Cattle futures bullish sentiment has been in the extreme zone >80%
Cattle futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Lean Hogs futures daily could get the DeMark sell Setup 9 on Monday
Lean Hogs bullish sentiment is in elevated zone >70% looking a little toppy
Lean Hogs Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Softs
Cotton futures daily sideways action continues
Cotton futures bullish sentiment still trending under 50% midpoint zone
Cotton Futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Coffee futures daily hit my downside targets and is trying to bounce
Coffee futures bullish sentiment did get into oversold zone
Sugar futures daily with another corrective lower high wave bounce
Sugar futures bullish sentiment with a bounce off 1 year lows
Sugar futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
Cocoa futures daily has been trending outside of the recent channel
Cocoa futures bullish sentiment remains in the elevated zone
Cocoa futures Commitment of Traders large speculators and weekly DeMark Setup, Sequential, and Combo indicators
DeMark Sequential Basics
DETAILED COMMITMENT OF TRADERS DEFINITIONS
