The December 2012 CCI opened the month at 572.64 and as of Dec. 27 is trading at 560.29.
Looking at the monthly chart below, you see how this index has climbed and dropped over the past 10 years. The index is made up of 17 markets, all weighted equally. Look at the following table to see how the index has opened the year over the last decade.
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
|
191.27 |
234.64 |
255.67 |
284.38 |
348.94 |
396.52 |
476.86 |
363.06 |
489.17 |
629.36 |
564.36 |
The index hit an all-time high in 2011 at 691.09. You can see the gradual climb until 2008. All this time the monthly ADX showed a strong trend and monthly Stochastics were overbought.
In 2008 there were numerous reasons for the highs in commodities. One major reason is the U.S. Dollar Index hitting a low of 71 in 2008. Also, through 2000 we saw more money enter the futures industry then at any time before. Swap Dealers and exchange-traded funds (ETFs) have added unheard of volume and dollars to commodities. Even the CCI has an ETF (GCC) that actually holds long-only futures contracts in all 17 commodities. It is currently managing $482.3 million in assets and was created in January 2008. And this is by far not the biggest. Another ETF, DBA, created in January 2007 has $1.69 billion in assets also spread across numerous long-only commodity futures contracts. We have seen many more commodity ETFs created. Just these two ETFs control more than $2 billion in commodity futures contracts that must roll over. The exchanges love these investment vehicles because they bring volume — massive volume. And I am not even talking about Swap Dealers here.
One thing on the chart to look at is the weak monthly trend we currently see with ADX at 18.6. So watch the index — not to trade, but to gauge the overall direction of commodities. FYI, GCC had a 52-week high at $32.36 and a 52-week low at $26.53.
Proceed to Page 2 for the latest COT Data...
COT Data
In the COT report, you will see that it looks as if we are witnessing a posture change by big money in the euro, U.S. dollar and cotton. The Commercials are now at a 52-week low in the euro at 7,751 net long, a 52-week high in the U.S. Dollar Index at 9,052 net long (previously net short), and in cotton we see Commercials now net short -34,949 contracts — a 52-week low.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
Watch for all the “so called experts predictions for 2013.” If you have not learned yet, you cannot predict the markets, you can only ride momentum. Once you realize this, you will have better success as a trader.
A happy and healthy New Year to all.
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