Saturday, 5 April 2014
Commercial Hedgers Keep Up Heavily Bearish S&P 500 Stance
Was yesterday's market bloodbath a one-off -- or the start of something more serious?
Could be more of the latter, if trader positioning in S&P 500 futures and options is anything to go by.
As discussed in previous posts, the upward trend of positioning by "smart money" commercial hedgers that started in December is over.
(Why "smart money"? That's because the S&P 500 commercial traders tend to get heavily bullish in their positioning when markets are about to go up and vice versa.)
That uptrend coincided with a nice little rally.
Friday's COT data shows the commercials at 1.32 standard deviations below my moving average in their net position as a percentage of total open interest.
Gold Joins Silver in Bearish Column
The downturn in trader positioning has pushed my S&P 500 signal to bearish on the open of trading the week of April 14.
See my latest signals table for more details.
As usual, though, the news from the COT data is somewhat mixed. My signal for the BKX U.S. Bank Index goes bullish for Monday's open of trading. And my signal for the Nasdaq-100 continues to be bullish.
In commodities, my signal for gold goes bearish on Monday's open, too -- joining my already bearish silver signal.
Natural gas also remains bearish.
Good luck this week.