COT positions

[friendly_jacek]

Now, if this is a big one, why COT is bullish on equities and bearish on gold?
Historically, COT were smart money.
I've been studying the markets closely for several months but I'm lost now. I added some new positions in FXI since it was "on sale" today, but trying to catch falling knives feels painful. Obviously, I sold yen and covered my shorts a couple of weeks too early.

[friendly_jacek]

Re: COT positions

Anyone, please?
Here are the COT charts for viewing: http://www.timingcharts.com/index.php

COT is record long on equities now. More so than in 3/2003.
They are also selling USD and JPY now.

I think this is how COT makes money: the opposite (or contrarian) position to the general public (dumb money). Obviously, it works short term and not necessarily long term.

[Jim Nickerson]

Re: COT positions

Anyone, please?
Here are the COT charts for viewing: http://www.timingcharts.com/index.php

COT is record long on equities now. More so than in 3/2003.
They are also selling USD and JPY now.

I think this is how COT makes money: the opposite (or contrarian) position to the general public (dumb money). Obviously, it works short term and not necessarily long term.

f-j,

That is a decent link worth bookmarking.

If I am reading the chart correctly, it seems the Comm Traders have backed off their long positions on the JPY, but still are rather long the US$ index.

I'm not even sure what constitutes the basis of my opinion, but I don't think much of anything has truly unwound just yet. I have a 10% long position in the yen, and it got down to -4% and has turned into a gain now. I'm not sure it is even close to time to sell it. Anyone wishing to argue me out of the position, I'm all eyes.

[rabot10]

Re: COT positions

f-j,

That is a decent link worth bookmarking.

If I am reading the chart correctly, it seems the Comm Traders have backed off their long positions on the JPY, but still are rather long the US$ index.

I'm not even sure what constitutes the basis of my opinion, but I don't think much of anything has truly unwound just yet. I have a 10% long position in the yen, and it got down to -4% and has turned into a gain now. I'm not sure it is even close to time to sell it. Anyone wishing to argue me out of the position, I'm all eyes.

No Jim stay in for the long haul - I just talked to dog and he said Jim should stay in for the long haul

[c1ue]

Re: COT positions

Jim,

Full carry trade unwind is probably still not there yet.

Yen/Dollar went from 117 to 112, previously 122 to 119; these are significant but hardly blood on the street.

My rule of thumb is that the full carry trade unwind can be considered done when 90% of possible profit from interest rate arbitrage is erased by currency changes.

This will require BOJ to raise rates to 2%-ish, and that has not happened nor will it for some time.

As for COT - you've probably seen my previous posts on technical analysis.

It is interesting, but ultimately 100% worthless for protecting your backside from the really bad events.

From what I can see COT is just comparing present price as a ratio between historical highs and lows.

A quick and dirty way to screen lots of commodities/stocks/whatever, but not a very good guide to put big money on by itself.

For example, this type of guide is probably still screaming that the Internet sector is a buy from 2000... since they're on average about 5% of historical highs.

[Guest]

Re: COT positions

Ted Butler on Commitment of Traders being distinct from mere charting -

I think we have a great set up in the COTs for silver and gold. The high-volume sharp sell-off last Thursday in gold and silver dramatically improved an already constructive set up. Friday’s high-volume rebound did not appear to be driven by technical fund buying, but rather some intense competition between the commercial T-rex’s and raptors, adding to the constructive picture. As I write this, on Tuesday morning, the price weakness only adds to the positive structure.

The one thing you must remember about COT analysis is that if a "buy signal" is flashing, as I believe is the case now, lower prices only strengthen the buy case. In this sense, the COTs are somewhat incompatible with chart analysis, which long-time readers know I never reference. The simple reason is if I’m buying an item, silver, that I believe is inherently undervalued to start with, I don’t care to sell it if it becomes more undervalued, as a violation of some chart point may dictate. In this sense, I find the COT analysis to be highly compatible with long-term supply/demand fundamental analysis.

Additionally, aside from pure analysis of the COTs, subjectivity and all, there’s a feeling I have down deep that we are about to see some real surprises to the upside in gold and silver, but especially in silver. We have been in a broad trading range in both, for about a year and a half, and it feels like the time is up on remaining in that range. The COTs strongly suggest the next real move is up.

[Jim Nickerson]

Re: COT positions

Ted Butler on Commitment of Traders being distinct from mere charting -

I think we have a great set up in the COTs for silver and gold. The high-volume sharp sell-off last Thursday in gold and silver dramatically improved an already constructive set up. Friday’s high-volume rebound did not appear to be driven by technical fund buying, but rather some intense competition between the commercial T-rex’s and raptors, adding to the constructive picture. As I write this, on Tuesday morning, the price weakness only adds to the positive structure.

The one thing you must remember about COT analysis is that if a "buy signal" is flashing, as I believe is the case now, lower prices only strengthen the buy case. In this sense, the COTs are somewhat incompatible with chart analysis, which long-time readers know I never reference. The simple reason is if I’m buying an item, silver, that I believe is inherently undervalued to start with, I don’t care to sell it if it becomes more undervalued, as a violation of some chart point may dictate. In this sense, I find the COT analysis to be highly compatible with long-term supply/demand fundamental analysis.

Additionally, aside from pure analysis of the COTs, subjectivity and all, there’s a feeling I have down deep that we are about to see some real surprises to the upside in gold and silver, but especially in silver. We have been in a broad trading range in both, for about a year and a half, and it feels like the time is up on remaining in that range. The COTs strongly suggest the next real move is up.

It's a bit confusing to me who wrote the above. I guess it was Ted Butler--the apparent link to his name is an Amazon book.

Where was the link posted? Who is Butler?

[Guest]

Re: COT positions

Jim -

Rick Bishop needs to answer that. I don't know if you noticed, but along with his self deprecating demeanor and camp jokes, Rick tends to be remarkably cagey. As you seem to be on his good side, ask him! I'm mud in his books this week 'cause I sold my small caps (so I'm a pansy).

Ted Butler has been a commodities trader for 25+ years and is very knowledgeable in the precious metals market. C1ue would feel he was delving into apostate literature reading this guy.

[Jim Nickerson]

Re: COT positions

Jim -

Rick Bishop needs to answer that. I don't know if you noticed, but along with his self deprecating demeanor and camp jokes, Rick tends to be remarkably cagey. As you seem to be on his good side, ask him! I'm mud in his books this week 'cause I sold my small caps (so I'm a pansy).

Ted Butler has been a commodities trader for 25+ years and is very knowledgeable in the precious metals market. C1ue would feel he was delving into apostate literature reading this guy.

Luke,

It seems to me to be a detraction from whatever might be your credibility to be posting things about which you don't know their derivation. Personally I think it is appropriate for posts here to information that originates elsewhere to contain the links so that anyone interested can explore whether or not he/she thinks the information or opinion is credible.

[Guest]

Re: COT positions

Jim - I have read enough of Ted Butler's to have a sense of what he's on abnout. I've mis-represented nothing to you.

Please look up Ted Butler yourself - all it takes is a few mouse clicks. He's considered an authority on the silver market in particular.

Now can you please stop grinding your ax in my regard? I thought Fred did the rounds this morning and re-inserted all our pacifiers? ( Mine's fine ... Glug, glug - does a "Maggie Simpson sucking on a a pacifier" impersonation ).

[Jim Nickerson]

Re: COT positions

Jim - I have read enough of Ted Butler's to have a sense of what he's on abnout. I've mis-represented nothing to you.

Please look up Ted Butler yourself - all it takes is a few mouse clicks. He's considered an authority on the silver market in particular.

Now can you please stop grinding your ax in my regard? I thought Fred did the rounds this morning and re-inserted all our pacifiers? ( Mine's fine ... Glug, glug - does a "Maggie Simpson sucking on a a pacifier" impersonation ).

Luke,

I'm not grinding anything on you. I have not suggested anything to you I would not ask of others. When you post others' stuff without reference, I think it assumes some form of plagarism. I'm not going to search out what you don't see as important enough to reference. In my opinion it was poor posting.

Not being omniscient, I have no idea to what all that means after the "in my regard?" and why a question mark?