Friday, 1 February 2008

Dow Jones Industrials Go Bearish

Looks like that might have been a premature bottom-is-in call in my post earlier today. This afternoon's Commitments of Traders data on positioning in the markets isn't quite as bullish as you might think from all the happily optimistic analysts out there. Perhaps we've got a bunch of more volatility headed our way after all. I've just posted the results from my trading setups based on this weekly data on my Latest Signals page.

My setup for the Dow Jones industrials has now turned bearish. This setup has no trade delay, which means execution is for the open on Monday. The Dow Jones signal is based on fading the "dumb money" large speculators when they get super-bullish or bearish. They've been reducing their huge net short position steadily for several weeks and are now nearly net long. It's a surprise after my SP500 and Russell 2000 setups have flipped to bullish for execution on Feb. 11 and 18, respectively. Overall, equities are still gasping for life, according to my COTs U.S. Equity Composite Index, based on all three of those setups plus the one for the NASDAQ 100. That index, now revised to take into account my new SP500 setup's dataset, has edged up to -0.74 from last week's -0.89. Good but not great. No sir. The index is giving its 10th straight bearish signal. Oh-oh. I think tough-guy Bernanke broke something.

On a housekeeping note: you'll see I've got my OIH Oil Services Holders and XEG iShares Canadian Energy setups both listed as bullish as of the Jan. 22 COTs report. This, with a trade delay of three weeks (i.e., for the open Monday, Feb. 18). When I was updating my setup signals last week, I didn't spot these two new signals as they're way at the end of my crude oil spreadsheet and I'm in the process of revising them. Sorry! Have a good weekend, and tune back in here for more details from the latest COTs report early next week.

1 comment:

2dogs said...

alex,[you fox] looks like you got out of silver JUST IN TIME