Friday, 5 February 2010
Commercial Hedgers Bet Big on Rebound
What a crazy day to cap a nutso week. Feels like we're back in the dog days of early last year. So many people are sitting in front of computers with their finger on the nuclear button. But new data from the Commitments of Traders report today suggests my series of bullish signals from last week are still on track. I've updated my latest signals table based on the new figures released this afternoon. A few highlights:
- S&P 500: You have to go back to Sept. 2007 to find a time when the "smart money" commercial hedgers have been this bullish. As you'll see on that latest signals table, these guys are in heavy-duty extreme territory in their bullish net positioning. Meanwhile, the wrong-way small traders have gotten even more super-sizedly bearish. This is setting up very nicely for my long bullish trade starting on the open of trading on Feb. 22. Note that, as I explained in a special post yesterday, such big moves in trader positioning don't necessarily take effect right away. On average, in the S&P 500 data, the commercial and small trader signals were best traded with a three-week delay in my backtesting.
- U.S. banks: My second week of being bullish in this market. The data is still looking pretty hot, even if it's a hair less bullish this week.
- Crude oil: My setup remains in cash, but the data has given me a new bullish signal with a four-week delay. It's to take effect March 8, I guess somewhat in sync with the yearly seasonal trade.
- Gold: Bullion remains also bullish. The data, which correlates strongly with bullion prices, has also gotten a little more bullish Friday.
- Natural gas: My trading setup for gas is bullish a second week and will remain so next week, then cash out.
Hope you did okay last week. Please check back in early next week for an update of my portfolio page. Good luck next week!