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<DIV>John & all RT's,</DIV>
<DIV> </DIV>
<DIV>First of all, I wish to make it clear that I am <STRONG>not
</STRONG>selling anything, nor do I have any affiliation with the organization
I'm about to mention (although I'm sure I'll be accused of spamming just the
same).</DIV>
<DIV>About a year ago, I came across a website that sells COT report analysis -
I don't know what sort of formula they use to compensate for the
"fuzzy" part of determining the extent of a commercial entity's
position, but they seem to have a knack for calling a move in a particular
market based on the rating produced by their COT Index (for position trading, of
course). For those who may have an interest, their web address is <A
href="http://www.apogee-atl.com";>www.apogee-atl.com</A> - they also publish one
of the best futures analysis newsletters I've seen, giving precise entry points
with first and second objectives for swing trades of 2-5 days. They've been
surprisingly accurate with those, and their profitable/losing trade percentage
is over 70% (and yes, the profits exceed the losses nicely). If I didn't think
their product/service was worth it, I wouldn't waste my time (or yours)
mentioning them.</DIV>
<DIV> </DIV>
<DIV>Let the (misguided) spam accusations begin!</DIV>
<DIV> </DIV>
<DIV>Dennis C.</DIV>
<DIV>dconn@xxxxxxxxx</DIV>
<DIV><FONT face=Arial size=2>-----Original Message-----<BR>From: <A
href="mailto:I4Lothian@xxxxxxx";>I4Lothian@xxxxxxx</A> <<A
href="mailto:I4Lothian@xxxxxxx";>I4Lothian@xxxxxxx</A>><BR>To: RealTraders
Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR>Date:
Friday, January 22, 1999 13:13<BR>Subject: FUTR: When COT data becomes more
important, or not!<BR><BR></DIV></FONT>>When COT data becomes more important,
or not!<BR>><BR>>The Commitment of Traders report gives a dated snapshot
of commercial and<BR>>speculative positions in the futures and futures
options markets. Some<BR>>analysts routinely derive some strong
opinions about future direction of the<BR>>futures markets based on these
reports. Regardless of whether they are right<BR>>or wrong, it does
make a good story.<BR>><BR>>Some look at the Large Speculator position and
say it is too large one way or<BR>>another. Others look at the Small
Speculator, because they are always wrong.<BR>>Right?<BR>><BR>>Others
look at the Commercial positions because commercial are real endusers<BR>>and
thus potentially have the best fundamental information about the
market.<BR>>This is where the analysis gets a little fuzzy for me.
Commercial futures<BR>>positions are really just one component of a variably
weighted algebraic<BR>>equation. The equation for the complete
commercial position in a commodity is<BR>>equal to its net futures position +
its net cash commodity position + its net<BR>>futures options position.
The weighting of each of these can vary greatly<BR>>depending upon the
conditions. <BR>><BR>>Market movement alone can alter the position
significantly, without any<BR>>adjustments to any cash, futures or futures
options position, due to the<BR>>dynamics of options. They could be
short futures, short cash and long a<BR>>boatload of options (calls and puts)
against it. <BR>><BR>>The COT report comes out with two
reports. The first one is futures positions<BR>>and the second is the
futures + the options. Now the quirky thing about this<BR>>is that if
the commercial is long a call, any strike call, that is another<BR>>unit
long. Does not matter if it is in the money or out of the money,
what<BR>>the delta or gamma is. It is one contract in long or
short. Thus, you have a<BR>>variable defined as a constant. Makes
for some funny math and some fuzzy<BR>>conclusions.<BR>><BR>>OK, that
is the downside. What about the upside? Well, in the grains
right<BR>>now the farmer received a big cash payment, due to low prices, as
part of the<BR>>transition to freer markets as part of the Freed to Farm
Act. This has two<BR>>important effects. One, it gives the farmer
a cushion so they don't have to<BR>>sell their grain at distressed prices, at
least right away. Two, it buffers<BR>>the natural market effect
of pushing high cost excess capacity out of<BR>>production. Anyway, I
think that because the farmer does not have as much<BR>>economic pressure to
sell as in the past, they are not selling at a rate that<BR>>would satisfy
current cash market needs.<BR>><BR>>This is reflected in the positive corn
basis in Decatur, IL. Despite all we<BR>>hear about the glut of corn
around, the commercials in Decatur (mainly ADM)<BR>>are paying above the
nearby futures price to get corn today. If they cannot<BR>>originate
enough cash corn from the country, then they can hedge their needs<BR>>in the
futures or futures options.<BR>><BR>>This influence, I believe, means that
there is more weight in the algebraic<BR>>equation towards the futures and
options components and less in the cash<BR>>position. This, I believe,
gives greater significance to current COT data in<BR>>the grains. You
still need to deal with the fuzzy math of the options<BR>>positions.
But, by following the Kevin Nevers grain players sheets you can<BR>>glean
information about some of the larger trades from all the
players,<BR>>including the commercials. These players sheets are
available from the CBOT<BR>>website, <A
href="http://www.cbot.com";>www.cbot.com</A>. I have no connection to this
service, other than as a<BR>>client and I know Kevin. (He tells very bad
jokes). Many brokers and<BR>>brokerage offices receive the players
report, so you might be able to get your<BR>>non-discount broker to give you
a rundown on any significant trades listed on<BR>>the end of the day copy of
the report.<BR>><BR>>These observations were not meant as a recommendation
to buy or sell any<BR>>specific futures or futures option contract. I
can and will change my mind.<BR>><BR>>Regards,<BR>><BR>>John J.
Lothian<BR>>President<BR>>Electronic Trading Division<BR>>The Price
Futures Group, Inc.<BR>><A
href="http://www.pricegroup.com";>www.pricegroup.com</A><BR>><BR>>Disclosure:
Futures trading involves financial risk, lots of it!<BR>></BODY></HTML>
</x-html>From ???@??? Fri Jan 22 12:41:38 1999
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Date: Fri, 22 Jan 1999 13:29:02 -0700
Reply-To: eadamy@xxxxxxxxxx
Sender: owner-realtraders@xxxxxxxxxxxxxx
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Windows Network
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For anyone working with NT, I highly recommend PC Novice Learning Series
Windows NT available from magazine racks for 5.95. Coverage includes
installation, troubleshooting, networking and tips. I've been using NT a
long time and still found it well worth the price and much less expensive
than the NT Resource Kit which I don't have time to read. Another excellent
source of Q & A info on NT is MS newsgroup microsoft.public.windowsnt.setup
(MS newsgroups are generally spam free).
Earl
-----Original Message-----
From: GREHERT@xxxxxxx <GREHERT@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, January 22, 1999 1:00 PM
Subject: Windows Network
>Would you email me privately if you would answer some questions about
setting
>up a Windows Network - either Windows98 peer-to-peer, Windows NT
Workstation
>peer-to-peer, or Windows NT Server.
>
>Thank you,
>
>Jerry Rehert (grehert@xxxxxxx)
>Atlanta, GA
>@ 02:58 am, January 22nd, 1999
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