Gary

About Me

I discovered the commitment of traders report several years ago. I have found these reports give me a tremendous edge trading the stock and commodity markets. The markets boil down to the big commercial traders being 75-80% of the market. For all practical purposes market direction is determined by the commercial longs battling the commercial shorts. If I can know what direction the majority of those large traders are leaning and stay on the same side of the fence as them I should have an edge in the market. The COT report does just that. When the COT reaches an extreme position either long or short then it is usually a good time to start looking for a trend change. These traders are regression to the mean investors. Typically they will increase their short positions as the markets get stretched on the upside banking on the market eventually regressing back to the average. Once the markets have corrected they tend to cover their shorts and go long relatively speaking. In order to understand the COT report you need some historical data to determine what levels are generally extreme short and long. I have condensed the historical data into an excel spreadsheet.

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