COTs Timer

Copper to Cash; Going for Gold and Gas

2012-01-23T09:22:00.000-05:00

Three signals take effect on today's open of trading based on my COTs Timer strategy: cash for copper and bullish for gold and natural gas. Sorry about the last-minute update this week. I'm away in Costa Rica! Beautiful place, and very nice people, but oh so very hot! Check my latest signals table for more details on these and my other setups. Good luck this week.

SPX Small Traders Get Excessively Bullish

2012-01-16T16:16:00.001-05:00

The wrong-way small traders have gotten excessively bullish in their positioning in S&P 500 futures and options, according to the latest Commitments of Traders report. That's helped push my setup for the S&P 500 into the bearish column with a three-week trade delay, meaning the trade takes effect the open of the week of Feb. 5.

Meanwhile, my BKX Bank Index setup has gone to cash this week.

See the details for these and the other COT data I am following with my COTs Timer system on my newly updated latest signals table.

Sorry about the delayed post this week. I was on the road travelling to beautiful and sunny Costa Rica. What a gorgeous place! Good luck this week.

Banks Bearish, Copper and Bond Bullish

2012-01-08T22:22:00.000-05:00

U.S. banks are bearish as of this week's open of trading, according to my trading setup for the BKX U.S. Bank Index based on the Commitments of Traders reports. Copper, on the other hand, goes bullish, as does my setup for the 30-year Treasury bond. Check out the details on my latest signals table. Good luck this week.

New Year Means Cash for Nikkei and Natural Gas

2012-01-01T07:55:00.000-05:00

Happy New Year! I've just updated my latest signals table based on Friday's Commitments of Traders data from the U.S. Commodity Futures Trading Commission. Signals taking effect the first week of 2012: Nikkei and natural gas to cash. See the table for more fascinating details about trader positioning in the eight markets I'm following with my COTs Timer trading strategy.

Thanks to readers for following this blog and your feedback over the last year and since I started it in 2007. I've learned more from readers' comments than I could have imagined, and that's helped me improve this trading system immeasurably. I hope 2011 was a good year for you and your loved ones and that 2012 is your best year so far. May all your dreams come true.

S&P 500 and Copper Bearish - And a Great Big Ho Ho Ho!

2011-12-23T16:14:00.000-05:00

I take it back. We got a beautiful bunch of fluffy snow this week to cover everything in a great big layer of snow just in time for Christmas. The wood stove is fired up, and we're as excited as can be for Santa up here in Quebec's Eastern Townships.

If only the news was so good coming out of the grinch-like trader positioning reflected in this afternoon's Commitments of Traders report from the U.S. Commodity Futures Trading Commission. As you'll see from my newly updated latest signals table, derivatives positioning has turned pretty sour pretty much across the board. Setups turning bearish on next week's open of trading: S&P 500 and copper. Crude oil, the Nikkei and natural gas were already bearish. The rest of my setups are in cash. None are bullish at this point.

But try not to think about that too much this holiday weekend! Happy holidays to all.

Out of Gold, Bearish for Gas and Nikkei

2011-12-16T16:53:00.002-05:00

Three signals take effect on next Monday's open of trading, coming out of my trading setups based on the weekly Commitments of Traders report from the U.S. Commodity Futures Trading Commission:

- Gold goes from bullish to cash. This is based on excessive bullishness in the large speculator total open interest starting several weeks ago. We could be in cash (or potentially bearish) for awhile.

- Natural gas goes from bullish to bearish. This signal will last two weeks.

- Nikkei goes from bullish to bearish. This signal will last two weeks too.

In other news, the S&P 500 data is still flipping around like a fish on the dock. The latest COT data issued this afternoon shows that the wrong-way small trader crowd has reduced its net positioning to the point that it's actually bullish. So that puts the overall setup, which goes to bearish on Dec. 26, back into cash on Jan. 9.

Hope you have a good weekend, and good luck next week! It's beginning to feel a lot like Christmas - except where's all the snow?! This time last year, we'd had weeks and weeks of non-stop snow up here in Quebec ski country. This year, we've just had lots of rain. I'm dreaming of a muddy Christmas. Thanks for nothing, global warming!

Cash for SPX, Bearish for Bond

2011-12-10T18:45:00.001-05:00

Short post this week - apologies! My signals table is now updated based on Friday's Commitments of Traders data. Signals for Monday's open: cash for the S&P 500 and bearish for the 30-year Treasury bond. Some of my other setups also have new signals for later in the month. See the signals table for all the details on how trader positioning looks right now. Hope you have a good weekend, and good luck next week.

Late December Awash in Bearish Red

2011-12-02T17:39:00.002-05:00

I somehow missed doing my promised update after Monday's holiday-delayed Commitments of Traders report came out. Very sorry! All the latest data based on today's new COT report has now been crunched by my chastized yet keen team here at COTs Timer central, and my latest signals table has been updated.

As it happens, last Monday's data didn't add any other signals than the ones I mentioned in last Saturday's post.

The new data from today, however, is a different story, as you'll see on my signals table. No new signals to report for next week's open, but after that, watch out. I think the best way to describe the latest COT data is "Yikes." Or perhaps "bahumbug." Santa will not be pleased. Late December is awash in bearish red. But try not to think about that right now! Tis the season to be jolly. Hope you have a great weekend, and good luck this coming week.

Holiday Delay - A Few New Signals

2011-11-26T14:10:00.000-05:00

Hope U.S. readers had a yummy turkey last week. The holiday delay means Friday's Commitments of Traders report will come out Monday, so I'll only update my latest signals table after that. But there are still a few signals taking effect on Monday's open based on data until now. To whit:

- S&P 500: Goes from cash to bearish

- Crude oil: Goes from cash to bearish

- Natural gas: Goes from bearish to bullish

- 30-year Treasury bond: Goes from bullish to cash

These signals are all marked on my signals table. But please note that I haven't updated the rest of that table, including the column for the coming week's "current signal," because of the holiday-delayed data. Thus, the signals in that column are for last week. Have a good weekend, and see you back here after Monday's data release.

Copper to Cash, Bond Bullish

2011-11-19T20:53:00.000-05:00

Two signals taking effect this coming week's open of trading: copper goes to cash, while the 30-year Treasury bond goes bullish. See my newly updated latest signals table for more details on these and the other markets I follow using the weekly Commitments of Traders reports.

Trader Data Good for Nikkei, Bad for Gas, Toss-up for Bond

2011-11-14T20:26:00.001-05:00

Some signals taking effect on this week's open: the Nikkei goes to bullish, natural gas goes to bearish and the 30-year Treasury bond goes to cash. See my newly updated latest signals table for more details on trader positioning in these and other markets as reported in the weekly Commitments of Traders reports.

The S&P 500 data is notably striking lately, with the "smart money" commercial hedgers getting highly bearish in their net positioning as a percentage of the total open interest, while the not-so-smart small traders remain super-bullish (whose signal I fade in my setup). My setup goes bearish the week of Nov. 28. What could it mean? These traders seem to be betting the cock-up in Europe gets even worse.

But meanwhile, the data for copper looks interesting too. The setup for the "smartest metal" remains bearish another week, then goes to cash. The data has just now also turned bullish, which historically has tended to mean price rises starting six to eight weeks down the line, depending on the trader group.

Hope you stay out of trouble this week! See you back here Friday.

Holiday Delay

2011-11-14T08:48:00.000-05:00

Friday's Commitments of Traders report is delayed until today due to a holiday delay with Remembrance Day. See you back here later today with a post about the latest weekly trader data. Meanwhile, as you'll see on my latest signals table, my natural gas trading setup goes from cash to bearish on this morning's open of trading owing to data from recent weeks.

BKX, Gas to Cash, Bond Bullish, Late Nov. Doldrums in Sight for SPX

2011-11-06T19:31:00.000-05:00

Signals taking effect on Monday's open: cash for the BKX U.S. Bank Index and natural gas, and bullish for the 30-year Treasury bond. To see more details on these markets and for other signals taking effect in coming weeks, check my newly updated latest signals table based on Friday's trader positioning as reported in the weekly Commitments of Traders report. Hint: New signal coming up for SPX, and it doesn't look good for bulls, no sir. Good luck this week!

Nikkei, Crude to Cash

2011-10-31T09:22:00.000-04:00

Two signals taking effect on today's open of trading. My trading setups for the Nikkei and crude oil both go to cash. See my latest signals table for the details on these and my other setups based on trader positioning as reported in the weekly Commitments of Traders reports issued by the U.S. Commodity Futures Trading Commission. In other markets, my natural gas signal goes from bearish to cash on Nov. 7, while my copper setup goes from bearish to cash on Nov. 21. Good luck this week, and Happy Halloween.

Nikkei Bullish, Bond to Cash

2011-10-23T16:58:00.000-04:00

A couple of signals taking effect on Monday's open of trading: cash for my 30-year Treasury bond setup and bullish for the Nikkei. See my newly updated latest signals table for more details on trader positioning and signals for these and the other markets I follow using the Commitments of Traders reports issued weekly for free by the U.S. Commodity Futures Trading Commission.

Existing signals that continue this coming week: bearish for the BKX U.S. Bank Index, bearish for crude oil (that setup goes to cash on Oct. 31), bullish for gold, bearish for natural gas and bearish for copper (that setup goes to cash on Nov. 21). Hope you had a good weekend, and good luck this week.

Trader Positioning Bearish for Copper and Natural Gas

2011-10-16T19:42:00.000-04:00

Two signals for Monday's open of trading: bearish for my natural gas trading setup and bearish for copper. Check my newly updated latest signals table to see details on trader positioning and signals for these and the other markets I follow using the weekly Commitments of Traders reports issued by the U.S. Commodity Futures Trading Commission. Good luck next week.

Slew of Sells From Latest Trader Data

2011-10-07T17:31:00.000-04:00

Woah - a slew of red bearish signals on my newly updated latest signals table. Looks like the bloodbath that is the markets these days. So you thought the correction was over and we're in the clear with this little bounce? Ha. The Commitments of Traders data does not agree with you.

Of course, the traders whose positioning the COT data reflects aren't always right. Nobody is. Here's a snapshot of some of those signals. You'll have to check the signals table for details on the COT positioning for each market.

- S&P 500: still in cash after being stopped out of a bullish signal in August.

- BKX U.S. Bank Index: bearish on next week's open of trading.

- Crude oil: bearish on next week's open.

- Gold: last week's bullish signal still in effect next week.

- Nikkei: in cash like last week.

- Natural gas: last week's bearish signal ends. This setup goes to cash on next week's open.

- 30-year Treasury bond: bullish last week, still bullish next week.

- Copper: in cash next week, going bearish the week after (on the open the week of Oct. 17).

Hope you have a good weekend, and good luck next week. Should be nutty! Happy Thanksgiving to Canadian readers.

Data Bullish for Bullion and Bond

2011-10-02T17:46:00.001-04:00

A slew of new signals to report for tomorrow's open of trading and the coming weeks. See my newly updated latest signals table for all the details based on the latest weekly Commitments of Traders data on how the biggest market players are positioned in the markets. For newbies, my COTs Timer trading strategy gives signals in eight markets based on past patterns of COT trader derivatives positioning that reliably signaled moves in price action. Here are some highlights from the latest COT data:

- Gold: The huge sell-off in bullion has spooked lots of folks. Good time to buy? Or is that just "losers averaging losers," to paraphrase Paul Tudor Jones. (Smart guy!) In this case, the COT data suggests the wrong-way large speculator crowd is at extremes of bearishness in its futures and options positioning. As my table shows, the large spec net position is now down to 2.5 standard deviations below average as a percentage of the total open interest. That's historically tended to lead to upward price moves.

- 30-year Treasury bond: My setup for the bond also goes bullish on Monday's open of trading.

See my signals table for more upcoming signals. Good luck next week.

Banks Go to Cash, Gas Still Bearish

2011-09-26T01:44:00.002-04:00

Only one new signal for execution on next week's open. My setup for the benchmark BKX U.S. Bank Index, which was bearish last week, goes to cash on Monday. My other bearish signal - for natural gas - stays bearish this coming week. Everything else is in cash this week.

My newly updated signals table based on the Commitments of Traders data also includes two bearish signals coming down the pipeline for mid-October. My setup for crude oil goes from cash to bearish on the open of Oct. 10 based on bearish positioning by the commercial hedgers and small traders (both of which are the "smart money" in this market). Also, I've finally included more details about my new setup for copper on that table. That setup goes bearish on Oct. 17 because of bearish positioning by the large speculators and small traders.

Reader feedback time: I'm curious how you use the COT data in your trading. Also, what are you doing that's working - and that isn't working - these days?

Good luck this week!

Banks, Gas Positioning Bearish for Next Week

2011-09-18T10:22:00.008-04:00

Two signals to report coming out of the latest weekly Commitments of Traders data. Trader positioning has turned super negative in the three-month Eurodollar contract. That's led my trading setup for the benchmark BKX U.S. Bank Index (a basket of the major U.S. financials) to go bearish for Monday's open of trading.

Also, my setup for natural gas goes bearish on Monday's open after the large speculators and small traders both put on highly bearish positioning in recent weeks.

See my newly updated latest signals table for all the details on these and the other setups I'm following. I still haven't added my new copper setup to that list. It's in cash for the next few weeks, but large spec and small trader positioning has turned very bearish here too lately. That's led the setup to give a bearish signal with a four-week delay - meaning for the open the week of Oct. 17. Good luck next week.

BKX, Copper to Cash

2011-09-09T16:23:00.006-04:00

A few new signals on my newly updated signals table: cash on next week's open of trading for the BKX U.S. Bank Index and bearish for my natural gas setup with a one week delay (i.e. for execution on the open of trading on Sept. 19). Also, my copper setup goes from bullish to cash on next week's open (on Sept. 12). See my signals table for more details on the Commitments of Traders positioning in these and other markets. Hope you did okay this week, and good luck next week!

Banks Bearish, Gold to Cash, Copper Bullish

2011-09-03T07:34:00.003-04:00

My trading setup for the BKX U.S. Bank Index goes to bearish on next week's open of trading, while my signal for gold goes from bullish to cash. Also, my new setup for copper goes from cash to bullish - but only for a single week; that signal then goes back to cash.

See more details stemming from Friday's Commitments of Traders report on my newly updated latest signals table (not including the data for copper, which I haven't put in that table yet). Hope you have a good weekend, and good luck next week!

Long Gold

2011-08-29T13:32:00.004-04:00

Gold goes back to bullish on today's open of trading, according to my latest signals based on the weekly Commitments of Traders reports. See my newly updated signals table for more details on this and the other markets I'm following. All other signals remain in cash. Sorry for the late update this week - Irene knocked out our power yesterday. Hope you got through Irene okay, and good luck this week!

Gold, Copper to Cash

2011-08-22T08:55:00.002-04:00

Just updated my latest signals table. Sorry for the late update! Two setups going to cash this morning on the open of trading: my gold setup, which was bearish, and my copper setup, which was bullish. See the signals table for more details on these and other markets. Good luck this week!

Bearish on Bullion

2011-08-14T19:34:00.006-04:00

Has gold topped? The Commitments of Traders data seems to be saying so. My trading setup for gold has gone bearish for Monday's open of trading. This is based on excessive bullishness by the large speculators.

See the details for this and the other markets I'm following with my COTs Timer trading strategy on my latest signals table, which I've updated based on Friday's COT data from the U.S. Commodity Futures Trading Commission. Hope you survived last week's nuttiness intact, and good luck next week.

BKX Bullish Trade Stopped Out After One Day

2011-08-10T10:03:00.001-04:00

Yikes - these markets are murder. I got stopped out of my BKX Bank Index bullish signal yesterday - just one day after buying the position. Not good! The bullish copper position is still holding on, for now. But my stop isn't too far below. Good luck the rest of this week.

Trader Data Bullish for Bank Index, Copper Starting Monday

2011-08-05T17:33:00.007-04:00

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

Stopped Out of S&P 500 Trade

2011-08-05T10:32:00.005-04:00

Woah - this crazy market is reminding me of 2008 all over again. Imagine the carnage that would have happened if the idiots in D.C. hadn't signed the debt agreement! The action this morning stopped me out of my S&P 500 long trade, which I had on since July 18. On the other hand, it's been pretty sweet for my bullish signal for the 30-year Treasury bond. Only problem - I didn't put on a trade for that signal because I didn't have any free money at the time in any of my accounts! See you later this weekend for an update based on this afternoon's Commitments of Traders data. Hope you're faring okay this week.

S&P Commercial Traders Get Negative, But not Worryingly So

2011-07-31T20:44:00.003-04:00

Not one new signal in my trading setups based on the Commitments of Traders reports issued weekly by the U.S. Commodity Futures Trading Commission. My S&P 500 setup remains notably bullish for a fourth consecutive week, perhaps signalling that all will work out in the U.S. debt standoff craziness.

Mind you, the "smart money" commercial hedgers have gotten considerably more bearish in their derivatives positioning in Friday's data. See my newly updated latest signals table for more details on this and the other COT markets I'm following. Nonetheless, the commercials are far from being at any kind of historic extreme in their holdings, which means my setup remains in bullish mode for the time being. Good luck next week.

Gold, Nikkei to Cash

2011-07-22T15:47:00.003-04:00

Couple of signals taking effect on next week's open of trading: My trading setup for gold goes from bullish to cash, and the same for my signal for the Nikkei Stock Average. Otherwise, everything's the same as last week: bullish for my new S&P 500 trading setup and the 30-year Treasury bond (meaning bearish for the yield) and cash for crude oil, natural gas and the U.S. BKX Bank Index.

My new setup for copper is also in cash for two more weeks, then goes bullish. Check my newly updated latest signals table for more details on how the Commitments of Traders positioning data sees these markets.

Have a good weekend, and good luck next week!

S&P 500 to Bullish

2011-07-17T21:21:00.004-04:00

Just updated my latest signals table with the Commitments of Traders data from Friday's weekly release on trader positioning by the U.S. Commodity Futures Trading Commission. My S&P 500 trading setup based on the COT data is going from cash to bullish on this coming week's open of trading (i.e. on Monday). The COT data for this market looks good for at least the next three weeks (the trade delay for this setup) - meaning it's going to be bullish at least three weeks out.

I've now also updated my S&P 500 setup based on new backtesting to include data since 2007. The new setup is the one I'm using for the new signal. Like my old setup, the new one uses the same two component signals: trading alongside the commercial traders when they hit certain extremes of trader positioning and fading (trading opposite to) the small traders, who are usually wrong at extremes of positioning. The new setup uses slightly different parameter values.

I've updated the latest signals table to include the new stop and portfolio allocations I'm using for the new setup. Please ignore the parameter values now listed on my backtesting results page, which I haven't updated yet. Please also ignore for the time being the parameter value information on the DIY page. I've disabled the spreadsheet linked there and will soon replace it with a new one using the new parameter values.

In other markets:

- BKX Bank Index: My setup for U.S. financials goes from bearish to cash on the coming week's open of trading.

- Copper: My new setup is in cash but goes to bullish on Aug. 8.

- Gold: Don't get too comfortable with the bullion rally. At least not if the COT data is right. My gold setup remains bullish one more week, then goes either to cash or bearish on July 25.

- 30-year U.S. Treasury: My setup goes to bullish on Monday's open after three weeks in cash.

See my latest signals table for more details on the other markets I'm following. Good luck this coming week.

S&P 500, Crude to Cash... Plus, See What My New Setup Says About Copper

2011-07-08T16:58:00.005-04:00

A couple of signals take effect on Monday's open of trading in my COTs Timer system: My S&P 500 setup goes from bearish to cash for a single week (then it goes to bullish the week following), and my crude oil signal goes from bullish to cash. Check out my newly updated latest signals page for details on trader positioning in these and the other markets I follow based on the CFTC's nifty little weekly Commitments of Traders reports.

In other news, I've developed a new trading setup for copper. I haven't included it yet in my signals or backtesting results pages, but I'll do so soon. The setup was bearish for two weeks in mid-June, then went to cash last week and will remain in cash four more weeks before going bullish. It's based on trading on the same side as the large speculators and small traders in copper futures and options (their net position as a percentage of the total open interest, to be exact).

This is my first setup from a new round of backtesting I'm doing on all my setups to incorporate COT and market data since 2007. My existing setups are based on backtesting data from 1995 to 2007, so I'm working now on bringing all that great new data - including a wild bear market and just-as-wild recovery - into my testing. It's lots of fun. Have a good weekend, and good luck next week.

Happy News for Gold Bugs

2011-07-03T15:25:00.004-04:00

One new signal for execution on the coming week's open: My trading setup for gold goes from cash to bullish. This signal will last at most three weeks. It's based on excessively negative trader positioning in gold futures and options by large speculators, whom my COTs Timer trading system fades. See my newly updated latest signals table for more details on this setup and my others based on the weekly Commitments of Traders reports from the U.S. Commodity Futures Trading Commission. A few other highlights:

- Financials: My setup for the BKX U.S. Bank Index remains bearish for a second week. This is based on highly bearish trader positioning in three-month Eurodollar futures and options.

- Crude oil: My crude signal remains bullish but will go to cash in a week's time.

To Canadian readers, hope you enjoyed a good Canada Day. To American readers, have a great 4th of July. And good luck to all this week!

Banks Bearish Today, S&P 500 Bullish in Three Weeks

2011-06-27T01:32:00.009-04:00

Good news for bulls in the latest Commitments of Traders report issued Friday afternoon by the CFTC. "Smart money" commercial hedgers remain net bullish in their S&P 500 futures and options positioning, while wrong-way small traders have suddenly gotten hugely net bearish. See my newly updated latest signals table for details. Readers might recall I reported last week that my S&P 500 signal had gone from bearish to cash with a three-week trade delay (i.e. for execution on July 11). Now, the latest data has pushed the signal into the bullish column for the week following - i.e. on July 18.

But there's also good news for bears. Everyone can be happy! Trader positioning in the three-month Eurodollars has soured considerably. It's given my BKX U.S. Bank Index setup a bearish signal for execution on Monday's (tomorrow's) open of trading. This signal tends to be shorter-term and on average has lasted 2.6 weeks in real-time trading (as opposed to 6.5 weeks on average for my S&P 500 signals). So it's entirely possible that both of these signals will turn out to be right.

Also, my 30-year Treasury signal goes from bearish to cash on Monday's open.

In housekeeping notes, I've started an update of my backtesting of my system - a necessary step after real-time trading a mechanical system for 20 to 30 percent of the original dataset, since the robustness of the signals tends to deteriorate the longer they're used. The original dataset was 1995 to 2007 for most of the signals, so they're due for an update.

My real-time trading experiences and all this juicy new data should help me come up with a more robust series of setups to replace the existing ones. I should start introducing new setups in the coming weeks. I've also been able to speed up a few aspects of my testing, which should allow me to find time to bring in setups for a few new markets.

Good luck this week!

Banks, Gas, S&P 500 to Cash

2011-06-19T20:42:00.006-04:00

New signals taking effect on the coming week's open of trading: My trading setup for the benchmark BKX U.S. Bank Index goes from bullish to cash, and my signal for natural gas goes from bearish to cash. I just updated my latest signals table with these signals and other new details based on Friday's Commitments of Traders report issued by the U.S. Commodity Futures Trading Commission.

Here's something interesting: The "smart money" commercial hedgers in S&P 500 futures and options have gotten substantially more bullish in their positioning in the latest COT report. Their signal has gone from bearish to bullish. Meanwhile, the wrong-way small traders are slowly unwinding their excessively bullish positioning, but they've yet to come anywhere close to a bearish extreme.

In my trading setup for this market, both groups of traders must give the same signal for me to take a trade. In backtesting, this gave the most statistically robust and profitable trades. The result? My setup, which uses a three-week trade delay, will go to cash in three weeks' time because the two signals don't agree.

Good luck this week!

Green Light for Crude

2011-06-12T20:21:00.002-04:00

One new signal based on Friday's Commitments of Traders data issued by the Commodity Futures Trading Commission. My trading setup for crude oil goes from cash to bullish on Monday's open of trading (June 13). See the details on the crude data and the trader positioning in other markets I'm following on my latest signals table. Good luck this week!

Bullish on Banks, but Still Bearish S&P 500

2011-06-06T09:09:00.004-04:00

Is it all over for the bull market rally since... how long has it been now?... since 2009! And what a rally it was. Trader positioning in the futures and options markets gives me a bullish signal for the BKX U.S. Bank Index, taking effect on today's open of trading. On the other hand, my bearish signal for the S&P 500 is still in effect, too. In fact, the latest COT data from the CFTC shows trader positioning in that market getting even worse.

The explanation could be simple: My BKX trading setup uses three component signals and thus tends to go in and out of positions on a shorter time frame than my S&P 500 setup, which is based on just two signals. In other words, both setups could be right. If that's the case, we could see a little rally within a larger decline.

See my newly updated latest signals table for more details on these and my other signals. Good luck this week!

Gold to Cash, Gas Bearish

2011-05-30T06:29:00.002-04:00

Two new signals based on the latest data from the Commitments of Traders reports issued by the CFTC. My trading setup for gold goes from bullish to cash on Monday's open of trading, and my setup for natural gas goes from cash to bearish on today's open as well. See my latest signals table for more details on these and my other setups. Good luck this week!

Is it a Top? Trader Data not Happy

2011-05-20T17:15:00.005-04:00

Markets sure feel toppy these days - especially now that the "best six months" seasonally favourable period for most major stock indexes is now over. This afternoon's Commitments of Traders report suggests the weakness could continue. My trading setup for the S&P 500 remains bearish, and trader positioning isn't giving any hopeful signs for bulls. See my newly updated latest signals table for details based on today's COT release. Have a good weekend, and to Canadian readers - a good long weekend. TGIF! Good luck next week.

Bank Signal Goes from Bullish to Cash

2011-05-13T16:55:00.004-04:00

Mostly quiet this week in Commitments of Traders land. This afternoon's COT release from the Commodity Futures Trading Commission resulted in one new signal in my COTs Timer trading strategy based on this weekly derivatives data: cash for the BKX U.S. Bank Index. Here's a little round-up of some of the action. For more details, see my latest signals table.

- U.S. financials: My trading setup for the benchmark BKX index goes from bullish to cash on Monday's open of trading. That's because the large speculators, whom I trade alongside in this setup, have suddenly reduced their net futures and options position as a percentage of the total open interest. The other two components of the setup remain in bullish mode, so the overall setup goes to cash. It had been bullish for three weeks.

- S&P 500: The "smart money" commercial hedger crowd is still heavily bearish, as they've been for the past six weeks. Meanwhile, the wrong-way small traders remain just as heavily bullish - as they've been for the last seven weeks. It all adds up to a bearish signal for my S&P 500 trading setup, which has been short since the week of May 2. Both sides are moderating their relative extremes of positioning, but just barely. No sign of any impending change of signal for some time.

Have a good weekend, and good luck next week!

Bullish on Gold, Bearish on Bond

2011-05-08T19:08:00.004-04:00

Two new signals based on the latest Commitments of Traders data from the CFTC: bullish for gold taking effect on Monday's open of trading and bearish for the 30-year Treasury bond, also to take effect Monday. See my just-updated latest signals table for all the gory details based on Friday's COT report. All other signals remain the same: bearish for the S&P 500, bullish for the BKX U.S. Bank Index and the Nikkei and cash for crude oil and natural gas. Good luck this week!

S&P 500 Bearish

2011-05-02T09:29:00.002-04:00

A few new signals taking effect on this morning's open: bearish for the S&P 500 and cash for natural gas and the 30-year Treasury bond. I updated my latest signals table Friday based on that day's Commitments of Traders report, but didn't have a chance to write a post. Apologies! See my table for more details on the latest COT data. Good luck this week.

Boost for Banks

2011-04-22T16:49:00.003-04:00

I've just updated my latest signals table based on this afternoon's Commitments of Traders data. Here's a little run-down of where things sit:

- BKX U.S. Bank Index: New signal for this setup. It goes from cash to bullish on next week's open of trading.

- S&P 500: This setup is in cash for a week more, then goes to bearish on the open the week of May 2. Looks like it'll remain bearish for a while, too, judging by the increasingly bearish positioning of the "smart money" commercial hedgers and the super-bullish stance of the wrong-way small trader crowd.

- Natural gas: One more week bearish in this setup, then she goes to cash.

- 30-year Treasury bond: One more week bearish in this setup, then she goes to cash. Hey, is there an echo?

Everything else stays the same as last week. What was it saying last week? Check the latest signals table to find out. Have a good holiday weekend, and good luck next week. Also be sure to check my portfolio page for an update early next week.

Gas Goosed? S&P 500 Snookered? Narley Nikkei?

2011-04-17T20:43:00.005-04:00

Here are my latest signals from my COTs Timer trading system, as of Friday's Commitments of Traders report from the good ol' CFTC (see my latest signals table for more details):

- S&P 500: Signal goes from bullish to cash on Monday's open of trading, then to bearish on the open the week of May 2.

- BKX U.S. Bank Index: Still in cash.

- Crude oil: Ditto (still in cash).

- Gold: Ditto again.

- Nikkei: Goes from cash to bullish on Monday's open.

- Natural gas: Goes from cash to bearish on Monday's open.

- 30-year Treasury bond: Still bearish. Goes to cash on the open the week of May 2.

Good luck this week! Check out my newly updated portfolio page with my current holdings and recently closed results. Sorry for not updating that in a while. We were on vacation in Isla Mujeres (Mexico) - beautiful place!

Readers might be interested in my random musings on the markets at The Montreal Gazette's web site (see here), where I'm covering the newspaper's $21,000 Stock Market Challenge. It's open only to Quebec residents of majority age, but if you're one of those and haven't still entered, you should. All entrants are eligible for a weekly $500 random draw. If you're not eligible, check it out anyway. I'm playing along myself, too, though I can't win any of the prizes. (Some silliness about conflict of interest... blahblahblah.)

Flip-Floppy Traders Give Bearish Signal for Early May

2011-04-08T15:37:00.006-04:00

Oh-oh. Some dark clouds for equity markets coming out of the latest Commitments of Traders report issued this afternoon. The CFTC's COT report has given me a bearish signal in my trading setup for the S&P 500.

That's based on the "smart money" commercial hedgers getting suddenly a fair bit more bearish in their net futures and options positioning as a percentage of the total open interest. Meanwhile, the wrong-way small traders - whom I fade in this setup - have been at extremes of bullish net positioning for the past three weeks.

See my latest signals table for more details on this and my six other market signals based on the COT data.

My bearish signal takes effect with a three-week delay - meaning on the open the week of May 2. That's about in line with the end of the S&P 500's favourable seasonal period.

In fact, my S&P 500 setup is going to see a lot of action in the coming weeks. Earlier data had given it a bullish signal for this coming Monday's open of trading. Then, the signal was going to flip to cash on the following Monday's open (i.e. on April 18). The data sure seems volatile.

In other news, my gold setup goes from bullish to cash on Monday's open. And my natural gas setup goes bearish with a one-week delay - i.e. on the open April 18. My 30-year Treasury bond signal remains bearish for a fifth straight week. And my other signals are in cash (crude oil, the BKX U.S. Bank Index and the Nikkei). Have a good weekend, and best of luck next week!

BKX, Nikkei Flip from Bullish to Cash

2011-04-03T21:42:00.003-04:00

A couple of new signals to report based on the latest Commitments of Traders data from the CFTC: My signals for the BKX U.S. Bank Index and the Nikkei both switch from bullish to cash as of the open of trading on Monday. See my newly updated latest signals table for more details about the COT data released Friday and how it impacts all seven of my trading setups. The data I follow for signals for the BKX has especially turned negatory, as you'll see on that table. All my other setups remain the same... for now. Good luck this week!

Bulling Bullion

2011-03-27T17:33:00.006-04:00

Hola from Mexico's Isla Mujeres. I'm winding up a two-month extended family vacation down here, and we love this place. It's sad to leave, but I'll be returning to my more usual pace of portfolio updates and fuller Commitments of Traders posts when I get home to Canada, where we've had a pretty brutal winter this year. Or so I hear from depressed friends... Cheers!

But I digress. Friday's Commitments of Traders report gave me two new signals: bullish for bullion and my trading setup for the S&P 500 goes to cash on April 18. Check out my newly updated latest signals table for more details based on the CFTC's latest COT data release. My other setups remain the same: cash for crude oil and natural gas, bearish for the 30-year Treasury bond and bullish for the Nikkei.

For gold, the signal goes from cash to bullish on Monday's open of trading. For the S&P 500, readers may recall that the wrong-way small traders got highly bearish last week, which gave me a bullish signal for the setup with a three-week delay (i.e. on April 11). Friday's COT report showed the same small trader crowd suddenly getting super-bullish in their net futures and options positioning as a percentage of the total open interest. That pushed my setup back into the cash column. (Recall that the "smart money" commercial hedgers have been bullish, but I need both groups of traders to give the same signal before I will take a trade.)

Good luck this coming week.

Disaster Finds Nikkei, S&P 500 Smart Money Super-Bullish

2011-03-21T01:57:00.003-04:00

Boy did that Nikkei bullish signal seem bad at the beginning of the week. Now, however, it seems spookily prescient. After a huge gap down in the wake of the tsunami disaster, then more turmoil as the nuclear catastrophe unfolded, my position in the Japan iShares (EWJ) is now actually in the money. Who knows how it will turn out, but this past Friday's new Commitments of Traders data is even more bullish for the Nikkei. I've updated my latest signals table based on the new numbers from the Commodity Futures Trading Commission.

The data for the Nikkei shows the "smart money" large speculators and small traders - the two groups of traders I follow for this market - ramping up their net futures and options positioning as of Tuesday. Yes, that was just as the gravity of the disaster was really sinking in and its nuke implications were sowing panic.

On the same day, the COT data also show the "smart money" commercial hedgers in S&P 500 futures and options got suddenly much more net bullish. Meanwhile, the wrong-way S&P 500 small traders - whom I fade - freaked out and got highly bearish. So much so, in fact, that their signal flipped to bullish. That has given me a new bullish signal for the S&P 500, which takes effect with a three-week trade delay.

See more details on these and my other signals on my table. Good luck this week!

Nikkei Bullish, Gold to Cash, Bearish on Bonds

2011-03-14T01:17:00.003-04:00

The latest Commitments of Traders numbers are in, and here are my new signals from my latest signals table: gold goes to cash on Monday's open of trading, Nikkei goes to bullish, and the 30-year Treasury bond goes to bearish. Check out the signals table for more details on the latest COT data and my other trading setups based on this weekly data. I'm temporarily away from my office for a few weeks, so apologies for not updating my portfolio page and the lack of more detailed reports here. Good luck this coming week!

Bullion Bullish

2011-03-06T19:11:00.002-05:00

A few new signals to report on my newly updated latest signals table: gold goes to bullish on Monday's open of trading, natural gas goes from bearish to cash on Monday's open, and my setup for the 30-year Treasury bond goes to cash as well. All other signals remain the same: S&P 500, Nikkei and crude oil are all in cash, while my signals for the BKX U.S. Bank Index is bullish. Good luck this coming week!

Gold to Cash, Banks to Bullish

2011-03-01T11:05:00.003-05:00

A couple of new signals on my latest signals table: gold goes from bullish to cash this week, BKX Bank Index goes from cash to bullish. Also, on Monday, March 7, natural gas goes from bearish to cash. Sorry for the tardy post about last week's Commitments of Traders numbers. I updated the signals table on the weekend, but didn't have a chance to post on it until now. Good luck this week!

Bearish on Gas and Bonds

2011-02-21T00:42:00.007-05:00

My trading signals for natural gas and the 30-year Treasury bond both go to bearish on the coming week's open of trading. All other signals in my COTs Timer trading system remain the same as last week (cash for the S&P 500, BKX U.S. Bank Index, the Nikkei and crude oil and bullish for gold). See my newly updated latest signals table for more details from last Friday's weekly Commitments of Traders release from the CFTC.

Also note that I've made a few corrections to some of the data because of a data inputing mistake caught by a couple of alert readers. (Thanks!) No changes were needed to existing signals, but my upcoming natural gas signal for the coming week's open is now bearish (as reported above), instead of bullish as I had previously thought.

Gas, Bond from Bearish to Cash

2011-02-12T08:35:00.003-05:00

Another nice signal from my natural gas trading setup last week. On Monday's open of trading, that setup goes back to cash. It will then go bearish the following week (on Feb. 21), as detailed on my newly updated latest signals table. All other signals remain the same (gold is bullish, everything else in cash), except for my setup for the 30-year Treasury. That one also goes from bearish to cash this coming week, but then returns to bearish on Feb. 21. Have a good weekend, and good luck next week.

Cash for Banks, Bearish on Natural Gas and Bonds

2011-02-07T09:15:00.006-05:00

I've just updated my latest signals table based on Friday's COT data. Signals taking effect on this week's open: cash for the BKX Bank Index, and bearish for natural gas and the 30-year Treasury bond (meaning the yield would rise). See the table for more details. Sorry for getting to this so late and for the truncated report today! Good luck this week.

Natural Gas to Cash, Then Bearish Again

2011-01-28T15:44:00.004-05:00

Wow - nutty week! It's starting to feel toppy, no? A few new trades take effect on Monday's open from my trading setups based on the weekly Commitments of Traders reports from the CFTC. See my newly updated latest signals table for details.

My natural gas signal goes from bearish to cash. In a week, on the open the week of Feb. 7, it goes back to bearish. That setup is just on fire. I'm going to have to check out the evaluation criteria I used to find it and see how those can help me improve my setups in the other markets when I start updating all my setups this spring.

Also, my 30-year Treasury bond setup goes from bullish to cash.

Hope you have a good weekend. I'm going to be traveling so I'll miss my portfolio update next week. But see you back here after next Friday's COT update.

Bank Bounce

2011-01-22T07:45:00.005-05:00

Wow - tough week. But Friday's Commitments of Traders data from the CFTC has some potentially good news for bullish positions. My trading setup based on this data went bullish for the benchmark BKX U.S. Bank Index. That signal is based on trading positions in the three-month Eurodollar, which got briefly much more bullish of late. One caution: the small trader total open interest has fallen substantially in the latest COT report. This pushed their signal into the bearish column. But that signal has a two-week trade delay, so the setup will remain bullish for up to two weeks, then go either to cash... or maybe even bearish. Who knows!

Check out my other signals and the rest of the data on the newly updated latest signals table. (In other news, my natural gas signal remains resolutely bearish for one more week, then goes to cash.) And be sure to look back here early next week for a portfolio update. Good luck next week!

2011-01-22T07:45:00.003-05:00

Wow - tough week. But Friday's Commitments of Traders data from the CFTC has some potentially good news for bullish positions. My trading setup based on this data went bullish for the BKX U.S. Bank Index. That signal is based on trading positions in the three-month Eurodollar, which got briefly much more bullish of late. One caution: the small trader total open interest has fallen substantially in the latest COT report. This pushed their signal into the bearish column. But that signal has a two-week trade delay, so the setup will remain bullish for up to two weeks, then go either to cash... or maybe even bearish. Who knows!

Check out my other signals and the rest of the data on the newly updated latest signals table. (In other news, my natural gas signal remains resolutely bearish for one more week, then goes to cash.) And be sure to look back here early next week for a portfolio update. Good luck next week!

Cashing Out on Crude, Gas Signal From Bullish to Bearish

2011-01-15T14:43:00.005-05:00

My trading setup for crude oil goes from bearish to cash on this coming week's open of trading, while my signal for natural gas goes from bullish to bearish on the weekly open. Those signals are based on my setups using the weekly Commitments of Traders data issued by the U.S. Commodity Futures Trading Commission. Check out the details for those and the other markets I follow on my newly updated latest signals table.

In other markets, data has turned down somewhat for U.S. financials, while the "smart money" commercial hedgers are getting more bullish on the S&P 500, which they were shunning until recent weeks. Also, the wrong-way large speculators have gotten seriously negatory on gold - a potentially bullish sign.

Be sure to check my portfolio page for an update early this coming week. Good luck in the markets and out this week!

Data Bullish for Bullion, Banks

2011-01-10T09:40:00.004-05:00

I updated my latest signals table based on Friday's Commitments of Traders data just before the open of trading this morning. Sorry about the delay! I was away from my office last week and over the weekend. Some interesting new developments you'll see on that table:

- S&P 500: The "smart money" commercial hedgers have finally gotten on board with the rally. They've reversed course and gotten somewhat more bullish in their positioning. My trading setup for the S&P 500 was already in cash after being stopped out in early December from its short position. But now the setup will officially go to cash on the open of trading on Jan. 31.

- BKX U.S. Bank Index: This setup was bearish last week and went to cash this week. But all three component signals have suddenly gotten bullish with the latest COT data. Because of the varying trade delays in that setup, the overall signal remains in cash. But I'll be watching closely for a possible discretionary trade in financials.

- Gold: My setup goes from cash to bullish as of today's open of trading.

- Nikkei: This signal goes from bearish to cash today.

- Crude oil: This signal goes from short to cash on next week's open of trading, on Jan. 17.

Good luck this week, and be sure to check my portfolio page, which I've also just updated.

Banks, Nikkei Turn Bearish

2011-01-03T17:11:00.002-05:00

Happy New Year! Hope you had a great holiday and that you have a healthy, happy 2011 filled with good fortune. What an interesting slew of new signals to report on my newly updated latest signals table.

Today's holiday-delayed Commitments of Traders report from the CFTC gives some bearish warnings for the beginning of the year.

My setups for the BKX U.S. Bank Index and the Nikkei both went from cash to bearish for this week's open of trading. (I'll execute those trades for tomorrow's open.) Also, my setup for gold has gone from bullish to cash. My crude oil signal remains bearish for two more weeks, while my setup for the 30-year Treasury bond is still bullish, as is natural gas.

Good luck this week and through the coming year! Be sure also to tune back in tomorrow (hopefully!) for a portfolio update.

Holiday Delay

2010-12-31T15:30:00.001-05:00

Holiday delay today means this week's Commitments of Traders report will be issued Monday afternoon instead of today. Happy New Year!

Bullish Natural Gas

2010-12-27T15:44:00.002-05:00

Happy holidays! Welcome to an abbreviated Xmas version of COTs Timer. I've just updated my latest signals table based on today's holiday-delayed Commitments of Traders release from the CFTC. No new signals again this week. Taking effect on this week's open of trading were two previously announced signals: bullish for natural gas and cash for the Nikkei Stock Average. Tune back in tomorrow or the day after for a portfolio update, and best wishes in 2011! Now back to my eggnog.

Treasury Bond Signal From Bearish to Bullish

2010-12-17T17:10:00.002-05:00

Not much to report this week from the Commitments of Traders data. See my latest signals table for the details. The only new trade to take effect on Monday's open of trading is to sell my bearish position in the 30-year Treasury bond and go long. That one's worked out pretty nicely. So has my bearish position in natural gas, which has one more week to run; that setup then goes bullish on the open of the week of Dec. 27.

Hope you have a great weekend and good luck next week. Tune back in early next week for a portfolio update. Happy Holidays!

Bullish: Gold; Cash: Financials; Bearish: Gas

2010-12-10T16:02:00.006-05:00

I've just updated my latest signals table based on this afternoon's Commitments of Traders data from the Commodity Futures Trading Commission. U.S. financials go from bearish to cash. Gold goes from cash to bullish. Natural gas goes from cash to bearish. See the table for all the details, and check back in after the weekend for a portfolio update. Have a good weekend!

Stopped Out of S&P 500 Short Trade

2010-12-10T11:48:00.004-05:00

I've been stopped out of my S&P 500 short position. As usual when something like this happens, I'll be looking at the charts to go in the opposite direction because it means an unusually strong trend.

Slew of Red

2010-12-03T17:11:00.003-05:00

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.

New COT Data Up

2010-11-29T16:13:00.003-05:00

I've just updated my latest signals table based on this afternoon's holiday-delayed Commitments of Traders data from the CFTC. No new signals to report, but some interesting shifts in trader positioning, including in natural gas and the three-month Eurodollar data. The latter, which gives me signals for U.S. financials, is now quite depressed, though I still haven't gotten a bearish signal for the BKX U.S. Bank Index. Have a good week!

Holiday Delay

2010-11-26T21:12:00.002-05:00

This week's Commitments of Traders report is delayed until Monday afternoon because of Thanksgiving. I'll update the signals table and write up a post Monday. Hope U.S. readers had a good Thanksgiving, and good weekend to all!