I don't think of it in terms of right or wrong, just different
groups with different goals. The Commercials are running businesses
that often require them to hedge forward -- either selling their
production for future delivery to guarantee cash flow or buying
forward to lock-in costs. The producers tend, though, to sell more
forward at extreme high prices and less near lows. The consumers,
obviously, buy more near lows and less near highs. Matt's long-term
data tracking looks for those extremes in the commercials,
especially the gold producers.
The non-commercials are speculators and want to be profitable
directionally. They crowd trades at extremes and will inevitably be
wrong at turns because they tend to herd. The Z-scores I put out,
show whether they are stretching the rubber band on 1 & 3 year
timeframes.
Does that help? Both are most helpful at extremes.
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Haven't posted this in a
Posted by a_l_ on 21st of Jun 2016 at 09:36 am
Haven't posted this in a while. Look at the consensus long ES. Huge week over week delta.
wow yeah that's a huge
Posted by matt on 21st of Jun 2016 at 10:04 am
wow yeah that's a huge change for most of them. I of course covered gold on the weekend, the commercials, which are sky high at about 300K
Commercial vs Non Commercial
Posted by kattap on 22nd of Jun 2016 at 02:31 am
But Matt, what a_I_ is reporting is Non commercial and what you report on the GOld weekly is the Commercial net short, am I right.
Also I have heard that most of the the times The Commercial traders are right in medium term, but difficult to really come to that conclusion?
Matt or a_I_ , or anyone else please comment?
thanks
kattap
I don't think of it
Posted by a_l_ on 22nd of Jun 2016 at 09:59 am
I don't think of it in terms of right or wrong, just different groups with different goals. The Commercials are running businesses that often require them to hedge forward -- either selling their production for future delivery to guarantee cash flow or buying forward to lock-in costs. The producers tend, though, to sell more forward at extreme high prices and less near lows. The consumers, obviously, buy more near lows and less near highs. Matt's long-term data tracking looks for those extremes in the commercials, especially the gold producers.
The non-commercials are speculators and want to be profitable directionally. They crowd trades at extremes and will inevitably be wrong at turns because they tend to herd. The Z-scores I put out, show whether they are stretching the rubber band on 1 & 3 year timeframes.
Does that help? Both are most helpful at extremes.