ChrisMoody

Yen Major Move Up Coming! Custom COT Indicators!

CME:JY1!   JAPANESE YEN FUTURES
2760 18 23
Overview.
-This is the Beginning of a Educational Series from Jake Bernstein to the TradingView Community.
-Many Traders use the COT Data Incorrectly.
-Jake Discovered if You Look at the Net Commercials and Take Note When Commercials net Buying is Either At All Time Highs, Or Net Buying = Longest Period of Buying Look for an Extreme Move To the Upside.
-In The Future We Will Show Precise Entry Signals…But a Basic Entry Signal Is When Commercials Go From Net Long to Net Short.
-Full Credit in Methodology goes to Jake Bernstein at www.Trade-Futures.com and www.2Chimps.net

Thought Process:
-Commercials Represent Large (Typically Billion Dollar) Companies.
-Take Note - When Commercials Are Buying at Record High
-Take Note - When Commercials Are Buying For Record Long Periods of Time
***Note…Commercials Can Buy For Extended Periods Dollar Cost Averaging…
***Basic Entry Listed In Overview.
***More Precise Entries Will Be Introduced Soon.

Take Note When Commercials STOP Buying and START Selling

Indicator Shows Net Commercials
-Full Credit goes to Greeny for Creating Original Code. I only made slight modifications.

Lower Indicator Modifications include
-Took Off Net Long and Short Individual Plots
-Added Optional Background Highlighting when Commercials Switch from Long to Short
-Added Optional Alert Capability If Commercials Go From Net Long to Short
-Ability to Show INVERSE - This makes it Easier for some Traders to See…Since the Signals look similar to MacD/RSI Type Indicators.

Upper Indicator Modifications include:
-Added Ability to Plot Text Entries when Commercials Switch From Net Long To Short
-Added Optional Background Highlighting when Commercials Switch from Long to Short
-Added Optional Alert Capability If Commercials Go From Net Long to Short

***Additional Indicators and Updates Coming Soon

***Link To Lower Indicator & Upper Indicator Below Under Related Ideas:
sigmadict
2 years ago
Thanks Chris I was looking for that information !
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maximus71
2 years ago
Hi very good work, use for pairs only or indexes?
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ChrisMoody PRO maximus71
2 years ago
I'll give more details later...But this is COT Data from http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm

The Data is on Futures Contracts....But the code converts Pairs to the Underlying Futures Contract if there is one.

As for Index's... the DOW, Nasdaq, S&P...you will have to look up symbols but I believe they are YM1!, NQ1!, ES1!
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Euro Rallies Almost Every Time Commercials Go Net Short....Some Short Term Rallies...Some Are Significant Rallies.

Not the HUGE Buying of Commercials Right Now...Big Move to Come Eventually!

More Thought Processes To Come.

snapshot
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maximus71 ChrisMoody
2 years ago
Very good work...this indicator Was missing....if have time think at COT for indexes...:) Thanks a lot to you
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ChrisMoody PRO maximus71
2 years ago
COT data is available for the S&P, Dow, Nadaq...etc...It's not as reliable for one obvious reason. When your talking index's there are many ways to play that move. You can buy the index's...or short bonds, play the Euro...these are only a few examples. Commodities are one of the few markets that are still PURE Supply and Demand. If you need corn...you need corn...You don't need index's....you buy index's to make money...so commercials believe index's are going higher....there are Lot's of places to place there money.
+1 Reply
Rocketman PRO
2 years ago
The visual COT data looks exactly like a reciprocal of the price chart. You can overlay them over each other and they will be exactly the same shape, except without candle wicks; unless there are anomalies that you can spot.
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ChrisMoody PRO Rocketman
2 years ago
You nailed it with the word Anomalies.

What I learned from Jake is if the chart looks normal...meaning nothing stands out...then it tells you nothing. However if you see Commercials buying at all time highs...or for a record length of time...something major is going to happen. What people have to understand regarding COT data (Commercials) is #1 they start buying while price is falling for one reason only. These are billion dollar companies...and have more research than we have...and they KNOW what the DEMAND is for there product. #2 they can afford to buy for extended periods of time b/c they have constant cashflows coming in. They are investing there profits for future returns. (Therefore This is not a TIMING Indicator...It's a Heads UP...BE AWARE type indicator). But they don't have billions of dollars for no reason!!!!

Take a look at the below chart of Coffee. First wee need historical data back to 1986...which I've requested, so pull up the chart on the DropBox link below. Note how few times commercials have went net Long since 1986. 100% of the time Commercials start buying Price EVENTUALLY makes a significant move to the upside...

What happens in Real Life. Starbucks is now Buying Coffee. Prices may continue to fall for a Long time. Starbucks Knows the Global outlook for coffee demand. Eventually when Prices Start to rise...Starbucks has already purchased coffee cheap. Do you think they will lower the price of coffee? Or when the price of coffee starts rising do you think they might RAISE the price of coffee saying they are ONLY passing on the costs to the consumer. Yet they bought the coffee when it was much cheaper. Starbucks will make billions...but in the near term there financials might not look so great because they are spending cash buying while prices keep falling.

Look at any raw commodity and you will see this. You just need the full historical data...10 years isn't enough.

I'll end by saying yes...if you overlay the charts...they are close to identical. But I would argue that in this case Price isn't the leading indicator. Commercials are. Billion dollar Institutions control the market. They Buy as prices are falling...and sell as prices are rising. Next time you see wheat prices skyrocket...notice the price of cereal...and then look and see what prices the commercials were buying at. They simply bought up the supply of wheat...which they can b/c people don't stop eating cereal (constant cash flow)...then they quit buying wheat as prices move higher.

I'll give it a couple of days...then I'll post a full historical chart of Wheat...Now that chart is a chart that shows Commercials buying like we have never seen before...

Chart of Coffee...

Below is a link to a full historical chart of coffee.
https://dl.dropboxusercontent.com/u/77187122/TradingView%20Posts/Coffee-COT.png


snapshot
+1 Reply
timwest PRO
2 years ago
I hope you are open to posting when you see trades set up and develop on a walk-forward basis too. Nice work Chris & Jake & Greeny.
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Carl7816 PRO
2 years ago
Nice Work my friend, very nice, I like it !!!!!
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Sinuhet
2 years ago
Dear Chris thank you for this work. Just wondering, because the absolute amount of Commercials and/or their positions change over a time, would not be better to express the same as "COMMERCIALS NET POSITION AS A % OF OPEN INTEREST"? Tome McClellan does it in this way (here example: http://www.mcoscillator.com/learning_center/weekly_chart/commercials_betting_on_big_dollar_downturn/) and he is consistently over years one of the best forecasters.
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ChrisMoody PRO Sinuhet
2 years ago
In no way trying to disagree with you...but I paid for McClellans weekly and Daily outlooks for years. if you get hi sfree newsletter he is GREAT at posting charts historically that look great...but when you pay for the daily analysis where he actually has to make a decision...below average.

His family (His Father) was difinately one of the key influential people who brought technical analysis to become widely accepted. I have respect for Tom...he finds great correlations. But over the years I've found ONE Thing to be a RED FLAG. he posts historical results...but I've never once seen him post a live account statement of what he makes from trading. I've never even see him post a fake account statement on predictions he's made...and track the actual results in real time. I have to believe he makes 100% of his money from his newsletters.

But his charts do look good historically.
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MartM
2 years ago
sorry but how do you provide the indicator exactly? can it be purchased?
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ChrisMoody PRO MartM
2 years ago
I charge timwest...but you can have them for free....just go to the top of the page and the links for the indicators are under Related ideas
+2 Reply
timwest PRO ChrisMoody
2 years ago
Good one! It's worth every penny to pay for Chris' advice, indicators and insights, which is why I charge for mine too.
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Xilpa
2 years ago
Chris, impressive work - well done and thanks!!
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GPFromChina PRO
9 months ago
I thought non-commercial interest is useful predicting the price move direction...
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Very nice! Looks like the buying has finally shifted to selling by the commercials. There looks to be big profits still to be made! Thanks Chris! All your scrips are money!
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