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Eric,
One of the advantages of using a COT Index is that it creates a standard
scale for comparison. This is helpful when comparing COT positions
between markets, and is especially helpful in markets like Silver where
commercials have never been net long. If you just looked at raw net
positions in Silver, you would never get a signal to go long based on
commercial positions.
Brad
>Date: Wed, 28 Jan 1998 00:14:09 -0600
>From: Eric Stewart <estewart@xxxxxxxx>
>To: btwj@xxxxxxxxxxx
>CC: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Subject: Re: COT Index
>As I mentioned in another message, I've personally not been able to use
>COT for timing trades but for indicating sentiment and confirming with
>other indicators. I particularly look for situations where the small
>traders have opposing sentiment to the commercials, and when the
>commercials are at significant highs/lows (such as yearly highs/lows
>looking at continous contracts). I know that these ideas are preached
>by many but they really seem to help (not alone however). I'm sure
that
>there are other "patterns" of COT data that others are trading, and
>would love to hear what others might be using.
>
>I may have missed some discussions on charting the 3 net longs vs. a
COT
>index, but am curious to know how those who are using an index are
>using it. I like to see the different groups positioning themselves
>relative to one another so I haven't gotten into using the COT index
>yet. It looks like I need to do some more reading!
>
>Eric
>
>
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