Objective of Analyzing Top Movers

Top Gainers refer to contracts that show the largest weekly increase in speculative long positions or open interest. These movements often suggest rising bullish momentum and growing trader confidence.

Top Losers are contracts with the biggest weekly increase in speculative short positions or a noticeable drop in long positions. This typically indicates bearish sentiment or a loss of conviction in the market.

Data Required

The analysis relies on the Legacy Commitment of Traders (COT) reports, which are published weekly by the CFTC. The key fields to focus on include Non-Commercial Net Positions, specifically the difference between long and short contracts. You’ll also want to track the change from the prior week, open interest as a percentage of total, and commercials' net positions which can provide contrarian signals.

Method for Ranking Gainers and Losers

To begin, pull the weekly COT data for either Futures Only or Futures + Options. Calculate the weekly change in net speculative positions by subtracting the previous week's net longs from the current week’s net longs. Contracts can be ranked by either percentage change or absolute change in position size. It can be helpful to filter out contracts with low volume or minimal open interest to focus on more liquid instruments.

Interpreting Gainers

A rise in speculative longs often points to growing momentum and the potential start or continuation of an uptrend. However, caution is needed if commercials are simultaneously increasing their selling activity, as this can indicate potential exhaustion. It’s best to compare the COT signal with technical resistance levels, fair value gaps, and current price action to validate the move.

Interpreting Losers

When speculative positions decline or shorts increase, it often reflects bearish pressure or waning interest. These unwinds can lead to sharp price drops. On the flip side, if commercials begin buying into that weakness, it may signal a bottoming opportunity. Discrepancies between sentiment and price action can hint at a potential reversal, especially when the move is overextended.

Weekly Workflow Example

Every Friday or Saturday, download the latest COT report and analyze the net speculative changes across major contracts. Rank each instrument to identify the week’s top gainers and losers. From there, overlay technical indicators such as RSI, moving averages, or fair value gaps to enhance decision-making. Momentum trades can be built around the top gainers, while reversal opportunities may come from the most oversold or overbought extremes.

Final Tips

Always cross-check COT signals with fundamental market conditions. Avoid chasing crowded trades as they often reverse unexpectedly. Finally, use historical data to understand positioning extremes and identify when the market may be due for a turning point.