Prediction
Cocoa is likely to rise over the next 2-4 weeks, with Commercial Hedgers' 100th percentile positioning and a 99-point divergence from Managed Money suggesting a high win rate.
Commercial Hedgers at 100th percentile · Managed Money at 1th percentile · 5-year range.
Key points
- Commercial Hedgers — 100th percentile, Managed Money — 1st percentile
- Open Interest +3.13% month-over-month
- Extreme positioning persisting 15 weeks
Why it matters
The convergence of Commercial Hedgers at the 100th percentile and Managed Money at the 1st percentile, along with a significant divergence between the two, matters because it suggests a strong bullish signal. Historically, such extreme positioning has often preceded significant price movements, and the persistence of this setup for 15 consecutive weeks increases the likelihood of a notable move in the next 2-4 weeks.
What confirms the thesis
Commercial positioning stays elevated and Cocoa holds or reclaims its recent range.
What invalidates the thesis
Commercial accumulation fades quickly or Cocoa breaks to fresh short-term lows.
For informational purposes only. Not investment advice. Disclaimer.