Entries by Peter Brandt

Special Situation Report (SSR) Details

It is anticipated that between five and ten Special Trading Situation Reports will be issued annually on no set schedule. Updates (if any) on trades outlined in the SSRs will be provided at the end of regular Factor updates. It would be very possible for a Factor member to focus only on SSR trades. The […]

Introducing Factor Special Situation Reports (SSRs)

Two comments we received quite frequently are:

  • The weekly Factor Update (16 to 24 pages) can become overwhelming.
  • Might there be a way for Factor to provide specific trading ideas in bite-sized packages that offer what might be described as "set it and forget it" trading strategies?
The first Factor Special Situation Report is attached, featuring a trading opportunity in Hard Red Spring Wheat.

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CFTC COT Data – A discussion

CFTC COT Data – A discussion

As a trader, I have gone months and even years paying little attention to the composition of open interest as reported each week by the CFTC’s Commitment of Traders data (COT).  I have covered the topic of CFTC COT Data recently, only because a number of markets have experienced all-time record levels of spec long and commercial short positions.

In a recent Factor update, I even raised the question of whether the old book on how to interpret COT data might be thrown away – that we might have entered a new and different era. Evidence now indicates that the old book and understanding of CFTC COT data still applies – that record levels of spec longs and commercial shorts is a reason for concern.

The charts below show some recent and current markets exhibiting CFTC COT extremes. In the cases of Soybean Oil, Sugar, Gold, Silver, Cotton, Copper and Crude Oil, record COT spec long positions led to significant market sell offs. It should be noted that Soybean Oil, Sugar, Cotton, Coffee and Copper are still at COT extremes, indicating that additional selling pressure is likely.

Please do not misunderstand me to be saying that record spec long positions MUST always lead to price declines. This is NOT the case. There have been times in the past when commercials have been forced to capitulate. For example, the monthly Copper chart (bottom chart featured) shows that a COT profile similar to the current profile resulted in an historic advance starting in Sep 2003.

 

CFTC COT Data - Factor Trading - Peter Brandt - Gold

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