It is not immediate to extract useful information from the COT data.
There are 2 main COT Reports: Legacy and Disaggregated.
The difference is that each report break down the 'Open Interest' (the amount of open contracts) and categorize the groups of traders in a different way:
- Legacy Report in 3 groups
- Disaggregated in 5 groups
So, considering both reports, there are a total of 8 groups of traders that can be followed, plus the 'Open Interest'.
The description of each group is available in the COT Chart page and in this article.
Usually the Commercials (operators that use the market to support their core-business) from Legacy Report is the best group to be followed, but each market can have different group or groups that gives the best indications.
In ForecastCycles you find the selection already done.
After a research, best COT data to be watched for the following markets are:
- for Gold: Commercials (from Legacy Report);
- for S&P 500: Asset/Money Managers (from Disaggregated Report);
- for Dow Jones: Commercials (from Legacy Report) and Open Interest;
- for Crude Oil: Dealers (from Disaggregated Report).