Beyond the raw data of the CFTC website<\/strong><\/h2>\n\n\n\nEvery week, the CFTC publishes the COT report on its official website. If you scroll through it, you will find data for every single listed future on the market: currencies like the Canadian Dollar or British Pound, agriculture, metals, stock indexes, petroleum, treasuries, and natural gas. It categorizes the market participants into groups such as dealer intermediaries, institutional asset managers, and leveraged funds, showing their long, short, and net positions.<\/p>\n\n\n\n![\"CFTC](\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\")
<\/figure>\n\n\n\nHowever, there is a massive catch. The original version provided by the commission is incredibly old-school. It is a dense, text-heavy wall of numbers that is incredibly difficult and time-consuming to read.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em><\/p>\n\n\n\nThis is exactly why we rely on Forecaster, our proprietary software for 360-degree financial analysis. Forecaster is the absolute foundation of our strategy, integrating everything from seasonality and technical indicators to fundamental analysis, corporate balance sheets, and advanced AI models. What Forecaster does with the COT report is beautifully simple: it collects all this complex weekly data and plots it directly onto clean, interactive charts.<\/p>\n\n\n\n
Instead of reading raw text, you can open the Forecaster terminal and immediately see a line chart or a bar chart representing the net positions of asset managers right below the price chart of the S&P 500. You can merge the charts, separate them, and look back through the entire historical data to instantly grasp the big picture. We don’t use this to predict the future with a crystal ball; we use it to understand how prices are reacting to the actual volume of money moving behind the scenes.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em> <\/p>\n\n\n\nThe classic mistake of following non-commercials<\/strong><\/h2>\n\n\n\nWhen analysts and traders first discover the COT report, they almost universally make the exact same mistake. They focus entirely on the non-commercial positions, which consist of professional money managers, Commodity Trading Advisors (CTAs), and hedge funds.<\/p>\n\n\n\n
The flawed logic goes like this: these guys manage billions of dollars, therefore they must always be right, and they must know the future of a specific financial instrument. This is completely false. Professional managers cannot predict the future any better than we can, and they make mistakes all the time.<\/p>\n\n\n\n
Furthermore, these massive funds have a structural problem that retail investors do not have: liquidity. If we want to go long on the S&P 500, we click a button on our trading platform, and the trade is executed instantly. Hedge funds cannot do that. Because they have billions to allocate, they have to move very slowly. Building a long or short position takes them weeks or months.<\/p>\n\n\n\n
Therefore, our goal is not to blindly copy what the big players are doing. Our goal is to analyze how the market is moving compared to the volume they are slowly injecting into the system. Another critical error is looking at only one category. To get a true read on an asset like the S&P 500, you must analyze multiple categories. You need to look at the speculative non-commercials alongside the asset managers, who invest for the long run and provide crucial insights into the fundamental valuation of the market. By comparing these categories\u2014and using tools like our Gap Index to spot extreme divergences between them\u2014we can identify highly probable market tops and bottoms.<\/p>\n\n\n\n
Hunting for divergences on the S&P 500<\/strong><\/h2>\n\n\n\nThe single most important concept to grasp when analyzing the COT report is the divergence. You must actively search for divergences between the price of an asset and the net positions (longs minus shorts) of a specific category of investors.<\/p>\n\n\n\n
A divergence occurs when the price is moving in one direction, but the net positions are moving in the exact opposite direction. When this happens, it is a glaring signal that a major top or bottom is forming.<\/p>\n\n\n\n
Let’s look at the S&P 500 as a prime example. During a recent major market bottom, the price of the S&P 500 was in a clear downtrend, tumbling lower and lower. However, if you looked at the net positions of the non-commercials in the Forecaster terminal during that exact same period, they were rising sharply. While the market was bleeding, speculative traders were heavily adding long positions. They knew the bear market was merely a correction and were buying aggressively. Price going down, net positions going up: that is a massive divergence and a true sign that a reversal is imminent.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em><\/p>\n\n\n\nWe saw similar patterns looking back at the beginning of 2026, and also during the bull run of 2024 into early 2025. In late 2024, the S&P 500 was pushing higher, making new all-time highs. But if you looked at the asset managers, starting from September 2024, they were actively decreasing their long positions. They recognized the market was fundamentally overpriced. They sold heavily into the rally. When the price finally dropped, forming a new low in the spring of 2025, these same asset managers started aggressively buying again.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em><\/p>\n\n\n\nWhen you see both non-commercials and asset managers buying heavily at a market low, you have confirmation from multiple angles that the asset is undervalued. Conversely, if the net position line is moving in the exact same direction as the price, it simply confirms that the current trend is healthy, safe, and sound.<\/p>\n\n\n\n
The Gap index and spotting extreme market conditions<\/strong><\/h2>\n\n\n\nAs we established, analyzing just one category limits your perspective. The true magic happens when you compare opposing categories, specifically the commercials and the non-commercials. When you plot them together on the same chart, you will immediately notice that they behave in completely different ways.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em><\/p>\n\n\n\nTo quantify this relationship, Forecaster features the Gap Index, a powerful metric that calculates the exact difference (the gap) between these two distinct categories.<\/p>\n\n\n\n
The rule here is incredibly straightforward: every single time the Gap Index reaches the absolute extremes of the chart, something major is about to happen in the market.<\/strong> Looking at historical data, whether it is a massive top or a devastating bottom, these turning points almost always align with extreme readings on the Gap Index. It acts as a definitive warning system. If you see prices making a new low and the Gap Index stretching to historical extremes, it is yet another profound confirmation that an important market bottom is currently forming.<\/p>\n\n\n\n<\/figure>\n\n\n\nPast performance is not indicative of future returns.<\/em><\/p>\n\n\n\nGold and the hidden power of producers<\/strong><\/h2>\n\n\n\nWhile the COT report is brilliant for equities, it offers borderline insider information when applied to commodities like Gold<\/a>. When analyzing gold, we have a unique and incredibly important category to monitor: the producers (merchant processors).<\/p>\n\n\n\nThese are the companies physically extracting gold from the earth. They know everything there is to know about the commodity. They know the exact cost of extraction and they hold the master key to supply and demand orders. Historically, producers use the futures market to protect themselves from price volatility. If they dig gold out of the ground today, it might take 30 days to refine and sell it. To ensure they don’t lose money if the price crashes during those 30 days, they open short positions on the futures market. Because of this constant need to hedge, the net positions of producers are historically negative.<\/p>\n\n\n\n<\/figure>\n\n\n\n
![\"CFTC](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/1-1100x824.png\")
<\/figure>\n\n\n\nHowever, there is a massive catch. The original version provided by the commission is incredibly old-school. It is a dense, text-heavy wall of numbers that is incredibly difficult and time-consuming to read.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em><\/p>\n\n\n\n This is exactly why we rely on Forecaster, our proprietary software for 360-degree financial analysis. Forecaster is the absolute foundation of our strategy, integrating everything from seasonality and technical indicators to fundamental analysis, corporate balance sheets, and advanced AI models. What Forecaster does with the COT report is beautifully simple: it collects all this complex weekly data and plots it directly onto clean, interactive charts.<\/p>\n\n\n\n Instead of reading raw text, you can open the Forecaster terminal and immediately see a line chart or a bar chart representing the net positions of asset managers right below the price chart of the S&P 500. You can merge the charts, separate them, and look back through the entire historical data to instantly grasp the big picture. We don’t use this to predict the future with a crystal ball; we use it to understand how prices are reacting to the actual volume of money moving behind the scenes.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em> <\/p>\n\n\n\n When analysts and traders first discover the COT report, they almost universally make the exact same mistake. They focus entirely on the non-commercial positions, which consist of professional money managers, Commodity Trading Advisors (CTAs), and hedge funds.<\/p>\n\n\n\n The flawed logic goes like this: these guys manage billions of dollars, therefore they must always be right, and they must know the future of a specific financial instrument. This is completely false. Professional managers cannot predict the future any better than we can, and they make mistakes all the time.<\/p>\n\n\n\n Furthermore, these massive funds have a structural problem that retail investors do not have: liquidity. If we want to go long on the S&P 500, we click a button on our trading platform, and the trade is executed instantly. Hedge funds cannot do that. Because they have billions to allocate, they have to move very slowly. Building a long or short position takes them weeks or months.<\/p>\n\n\n\n Therefore, our goal is not to blindly copy what the big players are doing. Our goal is to analyze how the market is moving compared to the volume they are slowly injecting into the system. Another critical error is looking at only one category. To get a true read on an asset like the S&P 500, you must analyze multiple categories. You need to look at the speculative non-commercials alongside the asset managers, who invest for the long run and provide crucial insights into the fundamental valuation of the market. By comparing these categories\u2014and using tools like our Gap Index to spot extreme divergences between them\u2014we can identify highly probable market tops and bottoms.<\/p>\n\n\n\n The single most important concept to grasp when analyzing the COT report is the divergence. You must actively search for divergences between the price of an asset and the net positions (longs minus shorts) of a specific category of investors.<\/p>\n\n\n\n A divergence occurs when the price is moving in one direction, but the net positions are moving in the exact opposite direction. When this happens, it is a glaring signal that a major top or bottom is forming.<\/p>\n\n\n\n Let’s look at the S&P 500 as a prime example. During a recent major market bottom, the price of the S&P 500 was in a clear downtrend, tumbling lower and lower. However, if you looked at the net positions of the non-commercials in the Forecaster terminal during that exact same period, they were rising sharply. While the market was bleeding, speculative traders were heavily adding long positions. They knew the bear market was merely a correction and were buying aggressively. Price going down, net positions going up: that is a massive divergence and a true sign that a reversal is imminent.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em><\/p>\n\n\n\n We saw similar patterns looking back at the beginning of 2026, and also during the bull run of 2024 into early 2025. In late 2024, the S&P 500 was pushing higher, making new all-time highs. But if you looked at the asset managers, starting from September 2024, they were actively decreasing their long positions. They recognized the market was fundamentally overpriced. They sold heavily into the rally. When the price finally dropped, forming a new low in the spring of 2025, these same asset managers started aggressively buying again.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em><\/p>\n\n\n\n When you see both non-commercials and asset managers buying heavily at a market low, you have confirmation from multiple angles that the asset is undervalued. Conversely, if the net position line is moving in the exact same direction as the price, it simply confirms that the current trend is healthy, safe, and sound.<\/p>\n\n\n\n As we established, analyzing just one category limits your perspective. The true magic happens when you compare opposing categories, specifically the commercials and the non-commercials. When you plot them together on the same chart, you will immediately notice that they behave in completely different ways.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em><\/p>\n\n\n\n To quantify this relationship, Forecaster features the Gap Index, a powerful metric that calculates the exact difference (the gap) between these two distinct categories.<\/p>\n\n\n\n The rule here is incredibly straightforward: every single time the Gap Index reaches the absolute extremes of the chart, something major is about to happen in the market.<\/strong> Looking at historical data, whether it is a massive top or a devastating bottom, these turning points almost always align with extreme readings on the Gap Index. It acts as a definitive warning system. If you see prices making a new low and the Gap Index stretching to historical extremes, it is yet another profound confirmation that an important market bottom is currently forming.<\/p>\n\n\n\n Past performance is not indicative of future returns.<\/em><\/p>\n\n\n\n While the COT report is brilliant for equities, it offers borderline insider information when applied to commodities like Gold<\/a>. When analyzing gold, we have a unique and incredibly important category to monitor: the producers (merchant processors).<\/p>\n\n\n\n These are the companies physically extracting gold from the earth. They know everything there is to know about the commodity. They know the exact cost of extraction and they hold the master key to supply and demand orders. Historically, producers use the futures market to protect themselves from price volatility. If they dig gold out of the ground today, it might take 30 days to refine and sell it. To ensure they don’t lose money if the price crashes during those 30 days, they open short positions on the futures market. Because of this constant need to hedge, the net positions of producers are historically negative.<\/p>\n\n\n\n![\"CBOT](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/2-1-1100x724.png\")
<\/figure>\n\n\n\n![\"gold](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/3-1100x899.png\")
<\/figure>\n\n\n\nThe classic mistake of following non-commercials<\/strong><\/h2>\n\n\n\n
Hunting for divergences on the S&P 500<\/strong><\/h2>\n\n\n\n
![\"CBOT](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/4-1100x826.png\")
<\/figure>\n\n\n\n![\"s&p](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/5-1100x1015.png\")
<\/figure>\n\n\n\nThe Gap index and spotting extreme market conditions<\/strong><\/h2>\n\n\n\n
![\"gold](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/6-1100x877.png\")
<\/figure>\n\n\n\n![\"gold](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/7-1100x877.png\")
<\/figure>\n\n\n\nGold and the hidden power of producers<\/strong><\/h2>\n\n\n\n
![\"CBOT](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/8-1100x758.png\")
<\/figure>\n\n\n\n
![\"gold](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/9-1100x895.png\")
<\/figure>\n\n\n\n![\"CBOT](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/11-1100x640.png\")
<\/figure>\n\n\n\n![\"CBOT](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2026\/08\/12-1100x839.png\")
<\/figure>\n\n\n\n