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NYMEX Non-Commercial/Manager Index


Last update: December 9, 2017, 5:09 EST

Description

CFTC COT Index is a percentile of net speculative positioning in light sweet crude oil (NYMEX) measured over the last 3 years. 

This indicator converts net positions (commitments) to a 0% -100% scale. It reflects where the current net position ranks as a percentage of its range over the last three years. A reading close to 0 suggests that a bottom is forming and a reading close to 100 suggests that a top is forming. Use this indicator to watch for extremes reading in the oil market. Readings of 95 and higher as well as 5 and lower indicate a potential market extreme. This is when the probability of a reversal is higher and a trader may start consider taking a contrarian position.

Managed positions form part of the broader non-commerical category. Therefore, even when non-commerical index is not setting a record low/high, managed index may be already doing so, indicating that a potential reversal in price is likely.

Updated every Friday by 6 PM Eastern time.

Source: US Commodity Futures Trading Commission, Bluegold Research calculations

Definitions

  • Non-Commercial positions - all positions by traders, who do not use futures contracts for hedging purposes. The “non commercial” category of the COT includes professional money managers (CTAs, CPOs, and hedge funds) as well as a wide array of other non-commercial (speculative) traders.
  • Managed positions - all positions by money managers.
  • Money manager - is a registered commodity trading advisor, a registered commodity pool operator; or an unregistered fund identified by CFTC. These traders are engaged in managing and conducting organized futures trading on behalf of clients. Managers are usually on the “correct” side of the market. If they are net long or are increasing their long positions then there is a bullish bias, if they are net short or are increasing their short positions then there is a bearish bias. However, it is important to remember that any side of the trade can become overcrowded. When net positions are near record highs or lows, it may be safer to be on the opposite side of the trade.
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