Uncle Ti 88

Dow Jones Industrial Average DJIA Commitments of Traders Chart We have been looking at commercials all these while and how their trading positions affect prices or sometimes how prices affect their trading decisions. It will be interesting to see how the non-commercials or specialists as some call them behave in relation to market prices. Look at the bottom of the DJIA at around 11000. The non-commercials are flipping to being net short but their numbers turned bullish and the DJIA bounced from that level to start the current rally.

COT Report - Euro FX The Euro is in a confused state right now. Look at where the Euro is heading and what the commercials are doing. The short has been taking place since the reported date of 11th September 2011!

Commitments of Traders COT CFTC - Gold Where is gold heading? Through the roof! There is no let up by both the commercials and speculators since 2002!

Commitments of Traders CFTC - EUR/USD Please not the above chart is the real COT report released by CFTC and it is not the COT Proxy. The EUR/USD have no proper direction in the last 2 weeks. Euro debt, US debt... both bad news hence even the commercials no have no idea what to do. The week prior to 16 August they are net long but last week they were net short. We see what the report release tomorrow will reveal for this week's positions. If the commercials for Euro are net short again this week, we can expect the EUR/USD go up.

SPDR S&P China - NYSE Want to know where the market in China is heading? The commercials aka " big boys" have been shorting the ETF since April 2011! Now the question is whether the selling will still go on or the price will rebound back-up... according to COT Proxy looks like the commercials are still shorting it... who will you follow? The commercials - "smart money" or  "dumb money"?

We shall look at metals, here we have the Copper Commitments of Traders Chart. Copper - Commitments of Traders Chart The COT chart shows that the bottom for copper is on Mar 2009 and the traders start buying into Copper. Lets look at the London Metals Exchange chart for the prices. Copper - London Metal Exchange Chart You can see that the prices bottom at around the same time and rises up as more and more traders enter long!

The graph below shows the relationship between the commercials and the large speculators. They go the opposite don't they? When the commercials are long, the speculators are short and vice versa. Gold - Commitments of Traders Chart The commercials (producers) are producing and selling (short) and the speculators are buying (long) since 2002! Look where the price of gold is now. Even though the price has fallen in the last few weeks, the percentage remains the same. From here you can expect the price of gold to go higher! The sell-off is nothing but consolidation! People have been saying to sell gold now but that is not what the Commitments of Traders chart is telling us. It tells us to buy, buy, buy! On a side note, if you don't know how to invest in gold and don't want to hold onto physical gold, you can look at the SPDR Gold ETF. In Singapore, it is traded like a stock on the Singapore Stock Exchange (SGX).

The raw data of the COT Report can be confusing. It is better to focus only on data that is relevant to your pursuit. For me, I focus on the marked red lines. COT Report I look at the long/short numbers for the 3 types of traders: commercials, non-commercials and non-reportables. By comparing the numbers with previous weeks numbers you are able to tell the trend of each trader class.