Commodities  |  MAY 2007

Timing The Market With COTS by Alex Roslin

Stocks & Commodities V. 25:5 (34-37): Timing The Market With COTS by Alex Roslin Who says you can’t time trades using the Commitments of Traders reports? This COTS-based mechanical system beat the NASDAQ by 728 percentage points — with only one trade needed per year. Ever wonder what the smart money is doing in the markets? How do the folks with the best information and deepest pockets invest their wealth? A handful of analysts and traders have found an interesting way to tell. It’s called the Commitments Of Traders report, and its devoted fans say the report is the closest to a holy grail of market forecasting they’ve found. The COTs, as they’re known, don’t make headlines like those celebrities of the world of economic indicators, the Consumer Price Index (CPI) or the unemployment numbers. But a growing legion of “commitments analysts” are glued to computers each Friday at 3:30 pm (Eastern time) when the Commodity Futures Trading Commission releases the latest weekly COTs numbers. The data, which used to be available only to paying subscribers but is now free, shows how many of the world’s largest commodity-producing firms, index funds, and hedge funds are positioning trillions of dollars of futures and options bets in more than 90 markets — everything from frozen pork bellies to the Standard & Poor’s 500, orange juice, the Canadian dollar, and unleaded gas.

by Alex Roslin