Letters To The Editor

YOU SAY COT, I SAY CIT

Jamie Saettele’s June 2009 article “Construct a Powerful Sentiment Indicator with COT Data” was interesting. However, he failed to mention that in its current state, COT data is not useful but is, in fact, misleading.

The CFTC for unclear reasons combined the true commercial data with another large speculator group—commodity index trader/dealer (CIT)—effectively rendering this data useless to all traders. These groups have different objectives in the market. When their net positions are comingled, you get an inaccurate view of market activity.

To the CFTC’s credit, it does publish the CIT report as an after-the-fact Band-Aid. But this information is not incorporated into any of the current publications that use the COT report data. Even worse, virtually nobody is aware of the existence of this CIT data. This means that most people are disseminating flawed COT data.
—Thomas N.

IMPRESSIVE, MOST IMPRESSIVE

I have participated in the first two SFO Author Series webinars, and they were informative and helpful. I liked having my questions answered and not just a generic answer that is seen by most people. I was impressed with the May 19 webinar with Jeff Augen because it was not cut off at the end of the scheduled 30 minutes. I liked that the organizer allowed time for all of the questions to be answered. Keep up the good topics and speakers.
—Douglas T.

SAME OLD, SAME OLD

I was looking for some meat in the May 2009 article “600 Students Later” by John A. Sarkett. I read the whole article trying to glean even the minutest bit of useful information. Every trader who is tired of losing money knows about setting goals, profit targets, maximum loss strategy, etc. It is the how part that they are missing. It would have been nice to read how Dan Sheridan selects his trades, what strategies he uses, entry points, exit points, the usage of the Greeks and so on.
—Nash T., Phoenix