To say the commercials a.k.a hedgers are ALWAYS on the wrong side of the longer trend surprises me a bit since I am quite sure they are usually correct on the longer trend rather than the shorter trend.
Commercials are seen buying/selling at exhaustion points. If you measure their losses at a week-by-week basis, it will seem that the speculators are mostly on the right direction since they are trend followers. Commercials on the other hand are only trading when demand and supply imbalances are over-hyped. I liken it to a weather derivatives trader in Sydney looking at his sky and determining the weather in New York whilst the New York trader (hedger) is trading in the opposite direction.
Although I know very few agree with time series regressions analysis; do one over a week and look for the changes in highly volatile weeks (use a Garman Klaus volatility so you measure intraday volatility). You will note when the hedgers swap positions better and it will actually shed some light to the actual direction the Commercials are betting on.
Anyway, I don't need to teach an expert how to read the COT report. We may interpret it differently but as long as both of us are making money, it doesn't quite matter :)
