Memorial Archives

Recommended Reading - Once Upon A Time The COT Ruled
posted Mar 6, 2006 at 10:44PM

Once Upon A Time The COT Ruled

My tribulations with COT interpretation have been well documented here. If you remember I had thought I had come upon a more thourough method of looking at COT in terms of the percentage of total open interest held by commerical shorts. I could not remember the source of the knowledge but I just rediscoverd that it was Brady Willet of I am certainly not pointing fingers here. Brady Willet does excellent work, and the method had a lot of compelling evidence. The markets are such a complex phenomena that no mechanical method lasts forever. The same thing happened to me once using CPC. I nailed the Nasdaq bottom, but bailed out of tech when the CPC had reached the level associated with bear rally tops. The Nas was 1600 then.

When indicators change it is usually because something in the market has changed. That is why I am in the camp that gold is in a new phase of its gold bull market (although it may be in for some tough sledding, short term)

The above article talks to COT behaviour and for those who follow COT, a very good read indeed.

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