COTs Timer: Trader Data Bullish for Bank Index, Copper Starting Monday

Friday 5 August 2011

Trader Data Bullish for Bank Index, Copper Starting Monday

Woah - that was just plain nutso. I was expecting a big bounce off the debt deal, but this week we got something like Godzilla meets 2008 meets 1929. I got stopped out of my bullish S&P 500 signal, as reported in my post earlier today. When that happens, my rule is to look for possible discretionary trades in the other direction. But I'm not anxious to get short either. We're close to a completed 9 count of a DeMark Sequential Setup in most equity indexes (see more on analyst Tom DeMark's system here), so there could be a vicious snap-back rally early next week that will screw up a lot of bears.

That's also the take I get from today's Commitments of Traders data. As you can see on my newly updated latest signals table, my setup for the BKX U.S. Bank Index has gone from cash to bullish, taking effect on next week's open of trading.

Also turning bullish on Monday's open is my brand new copper trading setup, as noted in previous posts. Sorry I haven't posted the full testing or other info on my signals and testing pages. I'll do so soon. My maximum portfolio allocation for this setup is 6.53 percent, and my stop is 11.49 percent below the entry price.

See my signals table for more details based on the CFTC's latest data. Have a good weekend, and good luck next week.

TAGS: SPX, S&P 500, gold, BKX, Bank Index, natural gas, Nikkei, crude oil,Treasury, bond, COT, Commitments of Traders,derivatives, Black Swans,market timing,trading system development, CFTC,Commodity Futures Trading Commission,COTs Timer, out-of-sample testing, walk-around testing

3 comments:

I_Got_Prechterized said...: Alex,

Am I reading your signals table correctly? Commercial traders are bullish the S&P500? But your indicator is cash because there's not confirmation from the small traders? Is that right?; 6 August 2011 at 15:34
Alex Roslin said...: Hi "I Got,"

Thanks for your question. That setup is in cash because it got stopped out of the bullish signal last week. Note that the cell for "Current Signal" has an asterix beside "cash." The note below the table explains when the setup was stopped out.

Regards,
Alex; 8 August 2011 at 16:38
In Debt We Trust said...: Volatility has a strong - very strong - tendency to revert to the mean. It is likely that the Vix will plunge in the short to medium term and absolutely in the long term.

Perhaps a strategy of buying vix puts may work.; 9 August 2011 at 09:40

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I am an active trader and award-winning investigative journalist based in Lac Brome in Quebec's Eastern Townships, just outside Montreal. I have written about investing and business for The Montreal Gazette, Investor's Digest of Canada, Technical Analysis of Stocks & Commodities, Futures & Options Trader, The Financial Post and others. I am not a certified financial advisor and am still refining my COTs Timer system. Please see more disclaimer information below. See my complete profile at the "Intro to COT" link above.

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I created this blog to record my personal, subjective observations about the markets, solely for my entertainment and that of interested readers and to foster research. Nothing on this blog should be construed as financial advice or an offer or recommendation to purchase or sell any security. I encourage anyone interested in the markets to do your own homework and/or consult a professional advisor. I am not a certified financial advisor and am still refining my trading system. I reserve the right to modify or stop publishing aspects of my system at any time or to delay updating my tables for whatever reason, or I may not do so in a timely manner. My system has resulted in very large drawdowns in some trades. Past backtested and real-time results are no guarantee of future performance. I will not be liable for any losses or damages of any kind that result from the content of this site. Although I consider the data, calculations and information on this blog to be reliable, I can't make any guarantees and won't be held liable or responsible for anything erroneous on this website. You are solely responsible for implementing safeguards of your data and system when you use this site and its content and links. It is up to the user of this site and content to protect yourself from worms, trojan horses, viruses and the like. I may hold positions in some of the securities mentioned in this blog.