Commitment of Traders Confirms Natural Gas Reversal

Commercial Trader Selling Leads to Key Reversal

Commitment of Traders Report identifies commercial traders as main sellers on natural gas futures rally.

The natural gas market is awash in excess supply. The warm summer has helped to push current stock through the pipeline but the fundamental picture remains little changed. New technologies have simply led to a glut of natural gas on the market.

The expectations for the natural gas futures market can be clearly seen in the actions of the commercial traders. They were the ones building the base as it traded down to $2 and below and they are primary sellers now that the market has rebounded.

Building on their success in this market we will also employ the technical key reversal in our creation of a new short trade. We will place our protective buy stop above Friday’s high at 3.060. Nearest supprt is $2.500. I expect the market to trade closer to $2.000 or below.

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ANDREW WALDOCK

866-990-0777

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Commitment of Traders Defending Cocoa Resistance

Commercial Traders Defend Cocoa at $2400.

Commercial traders rule sideways market. Three wins in a row. Will it be four?

We often talk about the Commercial Traders’ ability to define value as markets meander. The cocoa futures market has been an exceptional example over the last few months. The market has basically, gone nowhere. Fortunately, we’ve been able to pick up three succesful trades by following their ideas on overbought and oversold markets. Let’s see if we can make it four in a row. We are selling September Cocoa futures and placing our protective buy stop above yesterday’s high of 2375.

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Three winning trades in a row in cocoa futures.

 

ANDREW WALDOCK

866-990-0777

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Silver Futures Set to Rally

Commitment of Traders Report Points to Higher Silver Prices

Commercial traders building position for silver futures rally.

 

June 26, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

The commercial traders have nailed the silver market for the last few months. They were the heaviest sellers at the March highs. They sold more than 10,000 contracts through the month of February.

They’ve also been the heaviest buyers through the May – June decline, adding 7,000 contracts in the last month. These additions have pushed their position just above their buying levels in early January.

Their buying has also led to a technical divergence in the ARSI momentum indicator. We can see that the market made a new low on Friday’s trade, down to $26.57. However, the ARSI’s significantly higher reading in light of the market’s new lows provides evidence of a turnaround in the market, rather than continued downside.

We will be buying September silver futures and placing a protective sell stop at the swing low of $26.57.
If you would like to trade commodities with us, please go to Commodity & Derivative Advisors.

 

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ANDREW WALDOCK

866-990-0777

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Coffee Futures to Lead Coffee ETF (JO) Higher

Futures Move Farther & Faster than ETF

How to invest in the volatility differential between futures and ETF's.

It is widely accepted that the commodity futures markets move farther and faster than their equity related cousins and I certainly agree with that supposition. We see it all of the time. The leveraged nature of the futures markets and subsequent margin requirements allow smaller players to enter the markets due to the lower capital requirements as well as forcing them to exit for the same reason.

The coffee futures market has fallen by nearly half since the September highs. Over the same period, the Coffee Exchange Traded Fund (JO) has fallen by 40%. The 8% difference is easily attributable to excessive pressure on the short side of the futures market. 

This added pressure is also what will cause the futures market to bounce off its lows far more quickly than the ETF. The bounce will be fueled by massive short covering from Index funds and small speculators as the commercial traders in the coffee futures market have built up a very large long position on the market’s decline.

Clearly, the commercial trader sentiment is that this market has been beaten down below its deliverable price in the cash market. They are using these prices to ensure their production costs moving forward. Our philosophy of following the commercial traders in the commodity markets is based on our beliefs that no one knows a market like the people who whose living is tied to it. We track their actions through the Commitment of Traders Report and put their analysis to work for us at COT Signals.

 

ANDREW WALDOCK

866-990-0777

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Covering Coffee Futures Short Positions

Commercial Traders Holding Long Coffee Positions

Small Speculators and Funds Covering Short Positions

The coffee market has been one of the weakest markets of 2012 with prices declining more than 25%. Commercial traders were heavy buyers on the market’s decline to the 180-190 area where the market consolidated for months until May’s decline hit all market sectors.
Commercial traders have held fast to their position with very little net change since the middle of March. It appears that they may be getting the bounce they’ve been waiting for.
I expect this is primarily a large speculator and fund driven short covering rally given the magnitude and the timing as the July contract expires. Never the less, it’s perfectly conceivable that we trade back to the bottom side of the resistance between 170-180. Our protective sell stops will be placed at the swing low of 150.10
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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Cocoa Futures Headed Lower

Commercial Traders Selling with Seasonal Tendency

Commitment of Traders Report aligns bearish seasonal pattern with commercial selling.

The cocoa market is exhibiting classic commercial trader behavior. Commercials were buyers in April near the $2050 per ton lows and now that the market has come back to test the $2275-$2350 area, commercial traders have turned sellers. Last week’s Commitment of Traders Report shows that commercial traders sold nearly 5,000 contracts, 12.5% of their total position.

They clearly expect the resistance to hold and the market to exhibit its typical seasonal price decline from July, 1st – expiration of the September contract. We will be selling September Cocoa and placing our protective buy stop above the recent swing high of $2271.

ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Commercial Traders Halt Crude Oil Slide

Commercial Traders Defend $80 per Barrel Support in Crude Oil Futures

Commitment of Traders Report Shows Commercials as Willing Buyers on Crude Oil Decline

The crude oil market has been digesting excess supply due to Iranian oil flowing east, rather than west and the Saudi’s crude oil production filling the westward supply gap. See Global Glut Going Nowhere.
The market finally gave way to fundamentals and fell after spending March and April above $100 per barrel. Like most markets, swings tend to go too far in either direction and that is what we’re seeing now.
Commercial traders have been active buyers below $90 per barrel and I expect this to continue. We will be buying August crude oil futures and placing a protective sell stop below the swing low of  $81.39.
This trade was generated by COT Signals.

 

 ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.