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Commitment of Traders Plug-in

S&P Example

Video Transcript

The S&P 500 is probably one of the most difficult markets to trade. Let's look at the Commitment of Traders on the S&P, we're looking at the June 2004 S&P 500. You'll notice that we're only receiving one signal. That's because- if you look down here at the Commitment of Traders the primary individuals who trade the Commitment of Traders are these speculators.

Notice the green bars there are the small speculators, which are mostly day traders. The large speculators who held all of their contracts all night long, but primarily they're going to probably day trading or short positioning the markets as well.

You'll notice that the red lines, who are the commercials don't trade in this market very much. Even if we scoot back here, we have a little bit of an area where the commercials are in there. But primarily, this market is traded by the speculators only.

The buy/sell formula given to us by Jake Bernstein takes into account a lot of what's going on with the large commercial red line indicator guys. Because of that, because they are very few in this market, we get a lot less of the buy/sell signals arrows, from the Commitment of Traders in the S&P 500. You'll see more buy/sell signals on markets where the markets where the large commercials and the large speculators are working together to sell back and forth between the two. That's how this formula works, it works based on those. We don't take into account for the buy sell signals the small speculators. We're only interested in what the large speculators are doing.

That's why you don't get a lot of those in the S&P market, because we're not getting a lot of activity by the large commercials. That doesn't mean that you can't look and use the Commitment of Traders in your S&P trading, it just means that you're not going to get a lot of buy sell signals off of it.

You can see which markets, what the people are doing, what the large speculators are doing, what the small speculators are doing based on the chart, and based on the graph.


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