Coffee Traders Forum
[ Post a Response | Coffee Traders Forum ]
COT: An Alternate View
Posted by Tango
on January 19, 2020, 9:49 am
It is difficult to accept that the consumer sector are the only commercial buyers. The market behaves as if the buying is solid and fluid. It certainly satisfies most of the selling. We know that commercial spreads, and small traders spreads, are reflected on the COT as individual legs of longs and shorts. We see that the spread activity by specs is big. In this COT report the spread OI changed by 9,878 lots. We donít know what the individual sectors did, buy or sell spreads and which spreads. But we know that commercials and small traders are active in spreads as well. The point is that the changes shown on the COT for commercials could very possibly reflect more buying than the COT shows.
To say that commercials are not buying is not necessarily accurate. As delta traders they are natural buyers as prices ease. However, it is a matter of interpretation by the trading community. On the surface, commercials net bought a mere 866 lots in a high to low move of 9.35c. Some COT devotees may construe this as a bearish sign.