Monday, 26 November 2007

Happy Days Here Again for Equity, Agriculture Setups

Good news for equity bulls: My U.S. Composite Equity Index has shot back up to an optimistic height. The latest Commitments of Traders report has pushed this index, based on my trading setups for the SP500, Dow Jones industrials, Russell 2000 and NASDAQ 100, to a sunny reading of 0.62, up from last week's dismal 0.04. In fact, the reading gives me a renewed bullish signal for this index. Readers may recall the index took a decidedly worrisome turn starting in early October, sliding for nearly two months until its low of last week. The index remained on a bullish signal throughout (as it's been since March 27), but its downturn may have presaged the selloff we just endured. The recent upturn in the index suggests the worst may now be over for the markets.

My Agriculture Composite Index has also shot up to 0.90 from last week's 0.52. (A reading of "1" in both indices means its component setups are all giving a bullish signal, adjusted for execution on the open of next week's trading.) My ag index is based on wheat, soybeans, corn and sugar and gives signals for the DBA PowerShares Agriculture Fund. The latest COTs report gives me a renewed bullish signal for DBA.

2 comments:

Stan said...

Why use sugar? It's more of a world crop than domestic. Cotton is commonly planted in place of beans. It might be a better component for such an "index". Hope you find that useful.

Alex Roslin said...

Hi Stan,

Those are simply the four component commodities for the DBA ETF.

Regards,
Alex