Friday, 28 September 2007

Wow. New Signals Galore: Bullish S&P 500, SOX; Bearish Gold, HUI, USERX Gold Fund

Wow. It's just that crazy. The latest Commitments of Traders report has given an astonishing array of new signals for my trading system based on this fascinating government data:

1) After a summer from Hell for the markets, my trading setup for the S&P 500 has flipped to bullish.

2) After a wild ride to the stars, my setups for gold, the HUI Gold Bugs Index and USERX U.S. Gold Fund have gone bearish. Sorry, gold bugs and dollar-haters!

3) The SOX Semiconductor Index has also gone to bullish after six months in the bearish camp.

And that's not even including an armada of renewed signals in other setups: bullish for the Russell 2000, Nikkei and 13-week T-Bill; bearish for copper and natural gas. Doncha love this stuff?? There's also a renewed bullish signal for my COTs U.S. Composite Equity Indicator, which incidentally has gone ballistic slap-happy. It's shot up to a reading of 1.22 from last week's 0.53. As devotees of this space will know, a "1" means all four of my equity setups that make up this indicator have just registered a bullish signal, on average, for execution on the next open of trading. The reading is now higher than at any time since last April.

Check "Latest Signals & Results" in the Navigation bar for more details on these signals and the setups they go with. For more on my system, see "How It Works." See you early next week with some more thoughts on all this craziness. Hope your week went well, and best wishes for the weekend.


alexi said...

In the latest report, it looks like the S&P 500 contract went from 787 to 68221 (long position - short position) for commercial traders. However, the E-MINI contract went from 505696 to -88852. As I understand it, the S&P 500 contract is more important so presumably this is bullish overall. However, I was wondering -- does this tell us anything? Thanks.

Johnny Red said...

I follow the COT's in a slightly different manner, but I agree this week's COT report has put up a huge buy signal on the SP500. I'm glad your data analysis, confirms my system as well.

Anonymous said...

I'm new to your system and trying to figure it out. I noticed that last week (9/25/07) COT made a dramatic shift from long to short on e-mini S&P500 and Nasdaq100 that I consider smart money. Yet your system generates a bullish signal?
Could you please comment?

Alex Roslin said...

Hi folks,

Thanks for your comments. I haven't studied the e-mini data, so I can't comment on that.

As for the NASDAQ 100, I fade the large specs, who I found are dumber than the commercials are smart in this market.

The large specs did dramatically reduce their net short position in NASDAQ 100 futures and options in the latest report, but nowhere near enough to qualify as a historic extreme, so my existing signal still holds. In fact, historically speaking, the large specs are at a neutral level now, having been at record extremes of bearishness for several months.