Riding The Gravy Train: Cocoa Commitment Of Traders (COT) Observation

Riding The Gravy Train

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Wednesday, July 12, 2017

Cocoa Commitment Of Traders (COT) Observation

 
We note a record extreme in bullish COT among Commercial Hedgers, as seen in this chart (black circle):



The two horizontal red lines border a historic trading range just below current pricing, while the sloping black line suggests a trend of resistance. 

In the COT data at bottom we've circled in blue the times that Commercial Hedgers have held net positive positions and placed blue arrows to indicate that the price typically shot higher.  Note however that in 2004-2007 several years passed before a significant appreciation in price. 

The red arrows indicate prices dropping after Commercial Hedgers were net long.  That hasn't happened often. 

Simply, the odds strongly favor those buying cocoa at present levels.

We're effectively long cocoa via NIB already, and will now add to our position.

This related post should also be of interest to those holding or contemplating cocoa


 
 
 
 
 


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