The guiding principle in analyzing the Commitments Report is the belief that the large commercial hedgers are usually right, while the traders are usually wrong. That being the case, the idea is to place yourself in the same positions as the hedgers and in the opposite positions of the two categories of traders. For example, a
bullish signal at a market bottom would occur when the com­mercials are heavily net long while the large and small traders are heavily net short. In a rising market, a warning signal of a possi­ble top would take place when the large and small traders become heavily net long at the same time that the commercials are becoming heavily net short.