Monday, 11 January 2010
Gas Smells, Bond Bubbles, Gold Goes
Interesting new developments in the latest Commitments of Traders report released Friday. See my newly updated latest signals table for all the details. New signals for gold (cash), natural gas (bearish) and the 30-year Treasury bond (bullish). A few other highlights:
- S&P 500: Trader positioning has just made a major course change in S&P 500 futures and options, as that table of mine shows. Commercial hedgers (the smart money) are getting substantially less bearish, while small traders (the not-so-smart) are suddenly much more negatory. This, of course, overall could prove to be bullish. But not yet. My signal is still a leap and a jump away from flipping course and this week remains bearish. In fact, it can often be during this kind of trader repositioning that a big moves come.
- U.S. financials: The data still looks sad for the banks, although the large spec and small trader total open interest are both seriously less bearish this week. My setup is still bearish.
- Gold: My setup for bullion has suddenly had a major change of heart. It's going to cash after two weeks being bearish. The large spec (dumb money) net percentage of total open interest has seriously plummeted in the latest report. In fact, it has more or less steadily dropped for the past three months, but it's only this week that the signal based on this positioning has finally switched to bullish. (I fade the large speculators in this market.) It's a big move as this signal has been bearish since the beginning of August. The setup overall now goes to cash since both signals have to agree for me to take a position in this market.
But if the large spec net position signal remains bullish for three more weeks, which is very likely considering the long-term nature of that signal (it's based on a 33-week moving average), the setup will go bullish at that point.
Good luck this week, and be sure to tune back in within a day or two for an update of my portfolio page.