Friday, 3 December 2010

Slew of Red

Woah. What a mess of red showing up this week on my latest signals table! Although I'm quite long in my discretionary trades based on the sweet price action lately, the Commitments of Traders data just hates this market. I've just updated my table based on this afternoon's data from the CFTC. Some highlights:
- U.S. financials: My trading setup for the BKX U.S. Bank Index has gone bearish after 11 weeks in cash. This is due to huge declines in the total open interest of the large speculators and small traders in the three-month Eurodollar contract, plus declining net positioning of the large specs. The bearish signal takes effect on Monday's open of trading.

- Nikkei: My Nikkei setup also goes bearish on Monday's open.

- S&P 500: My S&P 500 setup has been bearish since Oct. 4, and the data remains steadfastly negatory despite the recent market action.

- Natural gas: Even natural gas is jumping into the bearish camp. This, even after its collapse over the last few eons. The signal takes effect with a week's trade delay - i.e. on Monday, Dec. 13.

Hope you had a good week and that you have an even better weekend. Tune back in early next week for a portfolio update.

5 comments:

Hunt said...

Alex, I'm brand new to your blog: looking forward to it. 2 questions, if your system follows COT and COT for S&P signal is bearish: what signal told you to be long right now (price action?). You were right, despite your system? How?

Also, do you ever use the COT to put on contrary trades? Like others do with sentiment? Thanks!! Hunt

Hunt said...

Alex, hi I'm new and was referred to your blog. Two questions for you. If your COT signal told you to short the S&P, why did you go long with your discretionary trading?

Also, if you went long in the face of a short signal, what told you to go long, price action? Thank you!

Hunt

Alex Roslin said...

Hi Hunt,

Yes, I'm long based on price action - specifically, breakouts of Tom DeMark Setup Trend lines on various securities. But I also follow all COT signals religiously. I also don't directly trade opposite to a COT signal.

For example, I'm short the S&P 500 based on my COT signal, so I don't have any long positions for the S&P 500. My long positions could be for another equity index or a specific sector or company.

Do I ever use the COT to put on contrary trades? No, not really. I just follow the signals the system spits out, whether they seem contrary or not. To learn more, check out my FAQs, Intro and How It Works pages.

Regards,
Alex

Hunt said...

Alex, thanks! Do you find Demark accurate? Do you use his mechanized system or just watch sequentials on your own charts? Thanks!

Alex Roslin said...

Hi Hunt,

I find DeMark's TDST lines work very well for me on the daily charts, especially when confirmed by the weekly charts. I annotate my own charts based on his indicators.

Regards,
Alex