Saturday 25 September 2010

"Smart Money" S&P 500 Traders Abandon Ship

It sure does look like we've put most of the worries about a "fall fall" well behind us. The S&P 500 has topped its highs of the summer, while NDX and copper are testing their highs of the year. But some sectors still can't shake off trouble - crude oil and financials among them. What, oh, what do the wise Commitments of Traders numbers foretell, you ask? Friday's data is gloomy indeed. I've just updated my latest signals table based on the latest COT report from the CFTC. Some highlights:
- S&P 500: Still on track to go bearish Oct. 4 and stay that way for three weeks at least. As you can see from my latest signals table, the "smart money" commercials have hit the panic button and are bailing out. They are now more relatively bearish than at any time since early Dec. 2008, which with their customary three-week trade delay was good timing for the early 2009 final leg down of the market crash.

- Crude oil: My trading setup remains bearish one more week, then goes to cash.

- 30-year U.S. Treasury: My setup goes bullish on this Monday's open of trading (not bearish as I had previously indicated!) That means bullish for the bond (i.e. the yield would fall). Another possible sign of market problems as bond yields tend to drop when equities go down.

- Natural gas: One more week bullish, then to cash on Oct. 4.

- Gold: Bullion has had a sweet run to all-new highs, and my setup is still bullish this coming week. The week following is a little in the air. It could go to cash on Oct. 4, but only if the large speculators go absolutely insanely over the top in their bullishness. Based on the COT positioning, the signal will definitely go either to cash or bearish on Oct. 11.

Hope you fare well this week, and be sure to check back in early in the week to see my updated portfolio page.

It sure does look like we've put most of the worries about a "fall fall" well behind us. The S&P 500 has topped its highs of the summer, while NDX and copper are testing their highs of the year. But some sectors still can't shake off trouble - crude oil and financials among them. What, oh, what do the wise Commitments of Traders numbers foretell, you ask? Friday's data is gloomy indeed. I've just updated my latest signals table based on the latest COT report from the CFTC. Some highlights:
- S&P 500: Still on track to go bearish Oct. 4 and stay that way for three weeks at least. As you can see from my latest signals table, the "smart money" commercials have hit the panic button and are bailing out. They are now more relatively bearish than at any time since early Dec. 2008, which with their customary three-week trade delay was good timing for the early 2009 final leg down of the market crash.

- Crude oil: My trading setup remains bearish one more week, then goes to cash.

- 30-year U.S. Treasury: My setup goes bullish on this Monday's open of trading (not bearish as I had previously indicated!) That means bullish for the bond (i.e. the yield would fall). Another possible sign of market problems as bond yields tend to drop when equities go down.

- Natural gas: One more week bullish, then to cash on Oct. 4.

- Gold: Bullion has had a sweet run to all-new highs, and my setup is still bullish this coming week. The week following is a little in the air. It could go to cash on Oct. 4, but only if the large speculators go absolutely insanely over the top in their bullishness. Based on the COT positioning, the signal will definitely go either to cash or bearish on Oct. 11.

Hope you fare well this week, and be sure to check back in early in the week to see my updated portfolio page.

Friday 17 September 2010

Cashing Out

Oh-oh. Just when talk of the "fall fall" has quieted down amid this nice little rally, the Commitments of Traders numbers are lining up to signal trouble. My trading setup for the S&P 500 was already going to cash on Monday's open after two and a half months of being bullish. It then goes outright bearish on the open of trading the week of Oct. 4. Also Monday, my bullish signal for the benchmark BKX U.S. Bank Index is ending; that setup also goes to cash.
See my newly updated latest signals table for all the details on these and the other markets I trade based on the COT data issued weekly by the U.S. Commodity Futures Trading Commission. My Nikkei setup went bearish last week. My crude oil setup has been bearish since Aug. 30. The only markets I'm bullish on right now from a COT viewpoint are gold (since Aug. 30) and natural gas (since Aug. 23). Correction to my post last week: My 30-year Treasury setup remains in cash next week and goes to bullish the week following - i.e. on the open of Sept. 27.

Hope you have a good weekend, and please tune back in early next week for an update to my portfolio page.

Friday 10 September 2010

Bank Signal Bullish Next Week... But S&P 500 Smart Money Gets Bearish

Some new signals and interesting data coming out of today's Commitments of Traders report from the CFTC. Check my latest signals table for the details. Some highlights:
- S&P 500: The "smart money" commercial hedgers have followed the wrong-way small traders in giving a bearish signal for my S&P 500 setup. That signal is to take effect on the open the week of Oct. 4.

- BKX U.S. Bank Index: The data for BKX, based on the three-month Eurodollar contract, has flipped to bullish for next week. (The trade is to go into effect on Monday's open.) But it's a short-term trade only, lasting just a single week, as the small trader total open interest went bearish last week. Their signal will kick in with a two-week trade delay the week of Sept. 20. This means my setup will go to cash or bearish that week.

- Nikkei: My setup goes bearish on Monday's open (Sept. 13).

- 30-year Treasury bond: My setup, which was bearish for two weeks, goes to cash on Monday's open. It will then go back to bearish on the open the week of Sept. 27.

- Crude oil: My setup went bearish Aug. 30 and will remain so until Oct. 4, when it goes to cash.

- Gold: My setup went bullish Aug. 30.

- Natural gas: The setup went bullish on Aug. 23 and remains so for at least one more week.

Hope you survived the last week and have a great weekend. Check back in early next week for an update to my portfolio page.



Saturday 4 September 2010

No More Bull for U.S. Banks

Wow - nice little rally last week. Just the thing to further confuse all the bears expecting a "fall fall." But just as more money is being pulled into the market, things are looking murkier and murkier in the Commitments of Traders data.
After seven weeks bullish, my trading setup for the BKX U.S. Bank Index has gone to cash for execution on this week's open of trading. (Those seven weeks being bullish were, incidentally, the longest this signal has been bullish since the fall of 1995, when the signal also went bullish for the same length of time.) See my newly updated latest signals table for more details on this and my other trading setups based on the COT data. Some other highlights:

- S&P 500: The wrong-way small traders are again boosting their net futures and options position in the S&P 500. It's now 2.1 standard deviations above the average. That's really leaning hard for a rally. Unfortunately, these guys tend to be wrongly positioned at key market junctures. Still, the "smart money" commercial hedgers are somewhat bullish themselves, too, so there's no clear signal in this market based on my read of how the data works. My setup is bullish right now and will go to cash on the open of Sept. 20.

- Crude oil: My setup is now bearish, but it's just gotten a new signal that will put it in cash in four weeks' time - i.e., on the open Oct. 4.

Hope Canadian and U.S. readers have a great long weekend - we're having a blast at our local, 154-year-old Brome County Fair - and good luck this coming week. Check back in early in the week to see my updated portfolio page.