Saturday, 15 March 2014

Bullish Traders Hopeful on Crimea -- Or in for Surprise?

The bullish move in trader positioning in the S&P 500 futures and options is now being confirmed in other equity markets, according to Friday's Commitments of Traders report.

The free weekly data from the U.S. Commodity Futures Trading Commission has pushed my signals for the BKX U.S. Bank Index and the Nasdaq-100 to bullish for the coming week of trading.

As well, my signal for the Nikkei, which had been bearish, has now gone to cash for this week's open of trading.

The commercial hedgers and small traders, both of whom I follow for my Nikkei signal, are now at astonishing levels of bullish positioning, as you can see on my latest signals table.

(Meanwhile, in commodities, my gold signal, long bullish, also moves to cash on the coming week's open.)

Market Hopes for Resolution in Crimea?

What does the bullish equities move mean? Perhaps the market doesn't believe Russia's Vladimir Putin will mount a feared full-scale invasion of Ukraine after Sunday's fraud-riddled referendum in Crimea.

Or perhaps the trader positioning last Tuesday -- which the current COT report reflects -- was based on market hopes of a resolution to the Crimea crisis, which have since failed to materialize.

If it's the latter case and Russian military incursions into Ukraine continue, the next COT report could promise a sharp reversal of bullish equity positioning.

No comments: