Commitments of Traders report tracks exposure to all kinds of futures by the two main types of investors in futures.....
hedgers/commercials and speculators/noncommercials
the report tabulates the net positions -- total number of long positions minus total number of short positions -- of the hedgers and the speculators....
For every long position in a futures contract there is a corresponding short position, as a general rule then, the net positions of hedgers and speculators, when added together, come out close to zero.
The reason they don't always is because the figures for hedgers and speculators don't include what the CFTC classifies as nonreportable positions, positions which are small ..... don't recall what the fig is, but it does differ from commodity to commodity ... but as a rule the ratio of non reportables stays fairly constant as a percentage and I only seek the BIG differences ....
At any rate .... the commercials generally come equipped with money, time, and information than do the rest of us ... the "public speculators" ///
so .....hedgers do so much better for buying at the lows and selling at the highs that I like looking at the differences .... sometimes vast, sometimes close to non existant ....
it really isn't "Smart Money" per se ... it is just Large Money most of the time, cause the specs can and will beat the hedgers a goodly percentage of the time .....
prices rise, the hedger has an increasing amount of risk to shed ..... so he shorts a growing number of futures contracts...
prices fall, there is a lesser need to hedge, so the hedgers' net position becomes less and less short, occasionally becoming a net long position....
now, when the market is trading in a long sweeping trend, whether it be up or down .... or when it is choppy, but not moving at breakneck speed .... I have found these two seemingly disparate sets of traders to be in agreement, or close to it ...
BUT
when things are getting ready to change (or so it appears to me anyway ...after all I see these things in visions .... hehehe) .... For example, when hedgers net short position and speculators net long position reach extreme levels by historical standards, I start to "sense" a peak in price
So, the chart is of good use to me .. in a non math type of intuitive feel ... to make me aware when the figures get out of line from a historical standpoint ......
HEAT ....Mare and I have been doing ok in the heat ....
she is inside under the a/c most all day and evening and night .. and of course in the car, too .....gggg
I, on the other hand, am out in it a great deal ...
and
believe it or not ...
but it is true ..
I don't even run the a/c in either of the suburbans or the pickup all day long ..... gggggggg
Don't know if this has been of ANY help to you ...
but John P will have forgotten more about this than I ever will learn ...
so ask him .....
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