Friday, 30 November 2007

COTs Look Sunny for Equities, Grim for Buck

Interesting week. Was that a sucker rally in the major indices or the start of a Christmas melt-up? Did this week mark the bottom for Treasuries yields? What's going on with commodities?

Did this cover (see right) in the wrong-way Economist contrarily mark the U.S. dollar bottom, as Stephen Vita suggested today on his Alchemy of Trading site? And why did a dozen wild turkeys just walk in front of my office window here in Quebec's Appalachians?

Lots of questions and plenty of interesting insights into it all, except the one about the turkeys, from this afternoon's Commitments of Traders report (based on data as of last Tuesday). I've just updated my "Latest Signals" page with the data from my trading setups based on these fascinating government reports, which are issued free each week by the U.S. Commodity Futures Trading Commission and detail trillions of dollars in futures and options holdings in nearly every market under the sun.

My overall take: the news is good for equity bulls. My COTs U.S. Composite Equity Index, based on my setups for the SP500, Dow Jones industrials, NASDAQ 100 and Russell 2000, remains unchanged from last week at 0.62. The index also gave a second renewed bullish signal this week. Renewed bullish signals for my Russell 2000 and Dow Jones industrials setups also lend more weight to the overall sunny picture here.

Also interesting: My 30-year Treasury setup hasn't followed suit with my 10-year Treasury setup, which you might recall turned bearish last week. In contrast, my 30-year bond setup has given its sixth straight renewed bullish signal. So I think it may still be an open question as to whether Treasury yields have really bottomed. This week's rebound may be but a pause. As I've noted this week, all my other Treasuries setups remain in bullish mode.

My odd-man-out 10-year setup is based on trading with the small traders when their net position hits historic extremes of bullishness or bearishness. The latest report shows this group of traders suddenly reducing their net position as a percentage of the total open interest. They've actually flipped back up to a decidedly bullish tilt in comparison with historic data, although not anywhere close enough to reverse this signal back to bullish, I should note.

As for the U.S. buck, the commercial futures traders have again slashed their net long position and now give me a renewed bearish signal. This is actually the first signal of any kind in this setup in over a year, since the original bearish signal back in Oct. 2006. It follows a steady 10-week reduction in the commercial net long position, which peaked with the Sept. 18 COTs report. How did Gisele Bundchen know!

I hope you had a good week and wish you a relaxing weekend. Check back here early next week to see more of my thoughts on the latest COTs data. Now, if only I could find my axe next time those turkeys show up.

Wednesday, 28 November 2007

New Story: "Stocks May Revive as Funds Exit Bonds"

Safe-haven Treasuries have shot up, up and away since last summer's subprime panic, as money has flowed from stocks into government bonds. Some analysts say Treasuries are topping and that yields are bottoming. See my take for inspired by the Commitments of Traders reports here.

Tuesday, 27 November 2007

New Story: "Was Gisele Bundchen Right to Sell the Buck?"

How smart is Gisele Bundchen? See my latest take on the metals and U.S. dollar - just posted at and on my "Alex Roslin's Financial Stories" page - to find out if this hottie supermodel has the smarts to go with her looks.

Monday, 26 November 2007

Happy Days Here Again for Equity, Agriculture Setups

Good news for equity bulls: My U.S. Composite Equity Index has shot back up to an optimistic height. The latest Commitments of Traders report has pushed this index, based on my trading setups for the SP500, Dow Jones industrials, Russell 2000 and NASDAQ 100, to a sunny reading of 0.62, up from last week's dismal 0.04. In fact, the reading gives me a renewed bullish signal for this index. Readers may recall the index took a decidedly worrisome turn starting in early October, sliding for nearly two months until its low of last week. The index remained on a bullish signal throughout (as it's been since March 27), but its downturn may have presaged the selloff we just endured. The recent upturn in the index suggests the worst may now be over for the markets.

My Agriculture Composite Index has also shot up to 0.90 from last week's 0.52. (A reading of "1" in both indices means its component setups are all giving a bullish signal, adjusted for execution on the open of next week's trading.) My ag index is based on wheat, soybeans, corn and sugar and gives signals for the DBA PowerShares Agriculture Fund. The latest COTs report gives me a renewed bullish signal for DBA.

New Signals: 10-Year Treasury Bearish, Heating Oil Bullish

Some interesting new signals for my trading setups based on the Commitments of Traders report issued by the U.S. Commodity Futures Trading Commission. Here are a few highlights:

- Stunning move today in the long bonds. Is the amazing run near an end? Maybe, according to the latest COTs report. My setup for the 10-year Treasury Note has flipped to bearish after a nice run since the bullish signal that started with the July 31 COTs report. The 10-year setup is based on trading on the same side as the small traders in the note's futures and options. They've just hit the brakes and suddenly ramped up their net short position. This setup has a trade delay of one week, meaning execution on the open Dec. 3. (See the main table on my "Latest Signals" page for more details on this setup, including the important risk information that's there, and my other signals from today's COTs report. Also, see "How It Works" to learn, er, how all this works.)

- My 30-year Treasury Bond setup remains in bullish mode, despite the new 10-year signal. In fact, this setup, based on fading the "dumb money" commercial traders and following the "smart money" large specs, has just given another renewed bullish signal. Go figure. So a bit of a mixed picture from the COTs Treasuries data. All my other Treasuries setups, incidentally, also remain on their bullish signals.

- The other new signal is for heating oil, which has flipped to bullish in the latest COTs report. Here's a real odd one. The setup, which is based on some fairly decent, statistically robust results, has been on a real dog of a loser bearish signal since March. Yet, now, with the price of heating oil having gone parabolic, the setup suddenly goes bullish. This, based on fading the small traders in heating oil futures and options. The "dumb money" has reduced its net long position as a percentage of the total open interest to a low extreme in comparison with historic data. Just checked to see if there's some kind of seasonality reason for the sudden bullishness, and there does appear to be a small seasonal sweet spot in December. Perhaps this is what the signal is tapping into.

On the other hand, there's also a lesson here: like any trading system, mine isn't about winning 100 percent of the time. It's about good-probability trades that try to catch the long moves. For those trades that don't work - and there will always be some - it's important to have risk-management tools (see my "Glossary" page for more details) and use them with discipline.

Friday, 23 November 2007

Holiday Delay

This week's Commitments of Traders report will be released Monday instead of this afternoon due to Thanksgiving. Hope American readers had a good turkey, and best wishes for a relaxing weekend. Still snowing up here in Canada. By the looks of it, it'll be not only a white Christmas, but also a white June.

Thursday, 22 November 2007

Video: Brits Explain Subprime Mess

Got a chuckle this morning watching this video on the subprime mess. Happy Thanksgiving to American readers!

Wednesday, 21 November 2007

New Article: "Fed and Yields Headed Down"

Just posted a new story I did today for titled "Fed and Yields Headed Down." You can read it here. It resumes what my Treasuries trading setups based on the Commitments of Traders reports are saying about bonds and the broader markets.

Tuesday, 20 November 2007

T-Bill Most Bullish in Four Years; Plus: Bullion Bull no Bull? And Wheat Drives Ag Rebound

When was the last time the COTs data was this bullish for the 13-week Treasury Bill? The answer: way back in July 2003. Remember those days? That was precisely the bottom for the T-Bill yield, as it hit below the amazing how-low-can-you-go level of 0.8 percent amid the post-dot-com deflation panic and the Iraq war.

That was also the last time the "smart money" small traders in the 3-month Eurodollar contract had a net position above zero as a percentage of the total open interest. My trading setup for the T-Bill trades on the same side as the small Eurodollar traders. They've been on a bullish signal since Feb. 2007 (meaning they're betting the T-Bill yield will fall). Hey, ain't that when the yield peaked? Nice. You might have read some nonsense about how the Fed is reluctant to lower rates at its next meeting. Well, the latest COTs report issued last Friday gave me a renewed bullish signal, meaning still more downward pressure for the yield. We'll see.

Now, I'd never pretend the COTs data gets it right all the time. Just look at the win/loss results on the table linked to my "Latest Signals" page. In fact, no trading system is right all the time. If you know of one, I'd love to see it. The goal of my system is high-probability trades that catch the long moves. As Jesse Livermore said in the classic Reminiscences of a Stock Operator: “The big money was not in the individual fluctuations but in the main movements… I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!” It was true in the '20s, and I think it's still true now. In fact, I'm going to put that quote up here somewhere. I always find it fascinating how this free government data can often help us foresee market moves.

Other Treasuries data confirms the tendency toward lower rates across the yield curve. All my Treasuries setups - from the 30-day Fed Funds contract out to the 30-year bond - are bullish. (See the table on the "Latest Signals" page for the exact dates these signals started and the results for these setups.) My 10-year Treasury setup has given its second straight renewed bullish signal, while my 30-year bond setup has now given its fourth consecutive renewed bullish signal. See my note from last week for more on the bullishness of my 10- and 30-year setups. My guess is all this is bullish for equities and the reflationary trade - e.g., precious metals - but I think it also portends major economic troubles ahead. Will reflation crash on the shores of recession? Your guess is as good as mine.

Other highlights from the latest COTs report:

- My COTs Agriculture Composite Index has rebounded smartly after last week's big dip. It now stands at 0.52, up from the previous week's 0.25. One reason: the commercial traders in wheat futures and options, already on a bullish signal, have again bumped up their net long position as a percentage of the total open interest. They've also given a 10th straight bullish signal.

- The latest COTs report suggests the recent explosive rise in precious metals prices may not yet be at an end. The small traders in gold and silver continue to be resolutely gloomy about bullion despite the ramp-up in prices, as they've been since the summer. The latest COTs report shows the gold small traders have reduced their net long position to the smallest it’s been since late June. That was just before the price of gold exploded from below $640 an ounce to peak above $830 in early November. Bullion prices have since retreated, but my guess right now is the COTs data may be trying to tell us this is a temporary spot of weakness, not a new downtrend for precious metals.

I use a setup based on the gold small traders to trade the Canadian Gold iUnits ETF (symbol XGD, trading in Toronto). This setup works by trading opposite to the small traders when their net position hits specific bullish or bearish extremes. This setup flipped to bullish back in May, and the latest COTs report gave me a renewed bullish signal for XGD.

My setup for silver works by trading opposite to the silver small traders. It’s been long since July, when the silver traders hit a bearish extreme in their net position. (Disclosure: I’m long both XGD and iShares Silver Trust, SLV.)

The COTs data for the U.S. dollar index supports this generally bullish view for the precious metals. The latest COTs report shows the “smart money” commercial traders—the folks with the best market information in most, though not all, markets—again reducing their net long position as a percentage of the total open interest, their seventh such decrease in a row. Their positioning is now decidedly bearish in comparison with the recent historic data.

However, I should point out that my trading setups for gold itself, the HUI Gold Bugs Index and USERX Gold Fund all flipped to bearish in late September, and they remain on that bearish signal as of the latest COTs report. These three setups are based on trading on the same side as the commercials. The latest COTs report shows them again reducing their net long position, and now they stand at an entirely neutral level in comparison with past data.

So they remain far from flipping back to a bullish signal. Sorry, gold bugs! These bearish signals did presage the current bout of weakness for the sector, but perhaps the overall COTs gold data is telling us the recent selloff is but a pause, not an end to the precious-metals bull.

Friday, 16 November 2007

COTs Call for Lower Rates, Still Love XGD, But Mixed on Equities

Lots of strident world-coming-to-an-end talk out there as the markets melted down and up and back down this week. Meanwhile, we're up to our arses in white fluffy snow up here in the Eastern Townships of Quebec. Some of you out there might think that's frightening, but what I see when I look out the window is nature's purest beauty. A couple of deer passed outside earlier to complete the picture.

Right, so what of those amazing little Commitments of Traders reports? What wisdom did they impart this afternoon? Overall picture: looks like the bull is still quite alive, though the current weakness may continue. On the bullish side of the ledger: A renewed bullish signal for my Russell 2000 setup. Plus: lots of bullishness from the Treasuries data, suggesting further interest rate declines to come. Hear that, Bernanke? Also very interesting: a renewed bullish signal for my XGD Canadian Gold iUnits setup. Nice.

But a couple of surprising developments from my two composite indexes for equities and agriculture. My COTs U.S. Composite Equity Index, for one, remains on a bullish signal, but it has dropped to a barely positive 0.04 from last week's 0.19. Oh-oh. Check "Latest Signals" on the right for the complete list of renewed signals. And stop in early next week for more highlights from today's COTs.

Subscription service: Lots of people have asked whether I was going to start a paid newsletter. I hadn't really planned to do so when I created this site, but recently I've been thinking about the future of COTs Timer and am contemplating putting many of the signals in a paid subscriber-only section. I still intend to keep a large number of the setups here for free because that's just the kind of guy I am and I believe in spreading the word about this valuable government data. But I'm not a charitable institution, so continuing to offer all the data for free just doesn't make sense any more. My apologies. I'll give more details soon. The change should come early next year. Your support and input have been very appreciated and educational. Hope you did okay this week and best wishes for a relaxing weekend.

Thursday, 15 November 2007

Updates: Russell 2000 Chart & Seeking Alpha Story

Want to see how the Commitments of Traders help me determine market direction? I've just posted a chart showing my Russell 2000 setup in action at my Latest Signals page. Also, check out my COTs-inspired ramblings on the agriculture sector at Seeking Alpha. Good luck today.

Wednesday, 14 November 2007

Blog Update: Spreadsheet and DIY Guide Posted

Want to crunch your own Commitments of Traders numbers? It's simple - and free. I've just linked a new page in the Navigation bar to help do-it-yourselfers. You'll find my S&P 500 spreadsheet updated as of the COTs report issued last Friday. (My Russell 2000 spreadsheet wouldn't upload into Google Docs for some reason, but it's still available for downloading at Thanks guys!) I've also included a bunch of info to walk you through what to do and some important risk information. Please read the instructions and information carefully, and if you've got questions, write a comment. Q-&-As on that page might just answer someone else's questions, too. Have fun!

Tuesday, 13 November 2007

Who's Smarter—Bernanke or the COTs? Plus: Lots to Say on the Buck, Silver and Gold, the Treasuries, Equities and Agriculture

Some highlights from last Friday's Commitments of Traders report:

- In the 30-year Treasury, commercial traders flipped from a net long to a net short position as a percentage of the total open interest. They haven't been this bearish on the bond since early 2005 (meaning they think the bond's yield will rise). Since the commercial traders are the "dumb money" when it comes to guessing the direction of Treasury yields, this is actually a bullish sign for the bond.

So who is the smart money for the bond then? The large speculators. And in bond futures and options, they've just gotten super-bullish, flipping to a net long position for the first time in nearly two years. The combination of these two moves gives my trading setup for the 30-year Treasury a renewed bullish signal—the third such signal in a row in this setup (meaning the data is saying the yield is likely to fall). Get smart, Bernanke. You can't fight the COTs. Rates look like they're still headed down, as this note today from Montreal's BCA Research says, too.

- The "smart money" small traders in the 10-year Treasury have also suddenly gotten majorly bullish, sharply taking in their net short position and giving me a renewed bullish signal.

- In equities, the COTs are still leaning bullish. The wrong-way S&P 500 small traders, whom I fade in my setup for this market, hit a 12-year extreme of bearishness with their huge net short position in mid-October. They've reduced that position a tad in the latest COTs report, but only slightly so, leading me to think the market won't fall much further.

- In the precious metals, I think "yikes!" sums things up nicely. What carnage! As I mention in my report on Kitco, sharp selloffs like Monday's are one of the reasons it’s so hard to trade many commodities—the “ulcer factor” is just too high. Here’s a typical scenario: After weeks of happy upside drawing in lots of latecomer small investors to the party, a spot of bad news sparks a vicious run, and the little guy jumps ship, feeling burned. Then, the market recovers and rises again! In fact, losing money in precious metals early in my trading life was one of the best tuition fees I've paid for learning how to trade. (Here's a free tip for you: don't trade off oscillators!) So what does the latest COTs report say about the metals?

The data issued by the Commodity Futures Trading Commission on Nov. 9 shows the small traders in silver futures and options hitting a historically bearish extreme in their net position as a percentage of the total open interest. The “dumb money” little guys have suddenly reduced their net long position to the lowest it’s been since Nov. 2005. Back then, silver responded by exploding out of an 18-month trading range, nearly doubling in price over the ensuing half-year.

The latest positioning of the wrong-way crowd, whom I trade opposite to in my setup for silver, has given me a renewed bullish signal for silver. This means I’m staying long iShares Silver (SLV).

In my gold setups, I didn’t get any new or renewed signals from last Friday’s data. This means all my existing signals still hold: bearish for gold itself, the HUI Gold Bugs Index and the USERX Gold Fund; and bullish for XGD Canadian Gold iUnits. (Personal disclosure: I am long XGD.) In fact, the small traders in gold futures and options are so bearish right now that they are a hair away from giving a bullish renewed signal for my XGD setup. So this suggests Monday's selloff may just have been a temporary pause. (I should point out, however, that trading off the COTs involves lots of volatility, especially in riskier markets like commodities. So there’s no way to know for sure what the markets will really do, and my setups could very well be wrong!)

My setups for platinum (bullish), copper (bearish) and the U.S. dollar index (bearish) are also unchanged. In fact, the futures data for the U.S. dollar index seems to indicate the greenback may face continued downward pressure, as the “smart money” commercial traders continue to reduce their net long position as a percentage of the total open interest—their seventh straight such reduction since their position peaked in the Sept. 18 COTs report. Now, the commercials have a decidedly bearish tilt when compared to recent data—although I should note they’re still nowhere near registering a renewed bearish signal in my setup for the U.S. dollar index.

- My setup for wheat shows the commercials again giving a renewed bullish signal—the ninth signal in a row. Their extreme net positioning started in mid-September, late in the recent run-up in wheat prices, and has continued through the recent wheat selloff, suggesting they believe there are higher prices to come.

- On a slightly sour note, however, my COTs Agriculture Composite Index—which gives signals for the DBA PowerShares Agriculture Fund and is based on my setups for wheat, soybeans, corn and sugar—has turned down to 0.25 from last week's 0.57. The dropoff is due almost entirely to an increase in bullish sentiment among the "dumb money" large spec crowd in soybean futures and options. The index's fall could suggest there may be a spot of trouble for DBA, but it is still on a bullish signal and maintains a slightly bullish tilt (it's above 0)—so not really a reason for panic. Good luck this week, and see you back here Friday.

Monday, 12 November 2007

Blog Updates: Stories on Banks, Markets

Just posted a column I wrote in today's Montreal Gazette on the banks titled "Don't Bank on These Shares for Awhile," on my financial stories page. (Click Investigate This! My Media Blog in the Navigation bar on the right.) You can also read my ruminations on the markets at Seeking Alpha, which has just posted my take on the latest COTs report. Check back here tomorrow (or latest Wednesday) for a more detailed report about Friday's numbers.

Friday, 9 November 2007

Was That the Market Bottom?

Was today's midday reversal the bottom? Or was the selloff into the close a bad sign of more carnage to come? I just updated my table on the "Latest Signals & Results" page with the word from my trading setups based on this afternoon's Commitments of Traders reports. Apart from a couple of renewed bullish signals for the long Treasuries (meaning still lower interest rates are likely, no matter what Bernanke & Co. say), my COTs U.S. Composite Index has bounced back up a little from last week's 0.17 to 0.19 this week. Also noteworthy: my beloved silver setup gives a renewed bullish signal, based on the ramped-up ultra-bearishness of the wrong-way small trader crowd. Nice.

I'll be back early next week with more details on all this, including the drop in my Composite Agri Index. Hope you did okay amid this week's turmoil and have a great weekend.

Wednesday, 7 November 2007

Updates: Gold & Composite Equity Tables

Just posted updated info on my tables on the "Latest Signals" page for my gold and U.S. Composite Equity setups. Good luck this week, and see you back here Friday afternoon.

Woes May Linger, But Equities Maintain Overall Bullish Tilt

Are we going to have a fall fall? Is the market’s incredible five-year bull run over? Ever since the summer’s subprime smash-up, analysts and traders have been super-jittery. Some experts on market seasonality warn that the autumn is typically the most turbulent time for stocks. So is this week's weakness just a prelude to the great bear market, or should we expect the usual bounce into the Christmas season? Does the data in the latest Commitments of Traders report released last Friday help us find answers? Why, yes, I think it does, thanks for asking.

The COTs reports, which detail trillions in futures and options holdings in 100-odd markets, have warned for a few weeks to expect some market turmoil, but they’re still almost uniformly bullish for equities and Treasuries, suggesting even lower interest rates are likely. All my trading setups for equities are in bullish mode, with the solitary exception of the NASDAQ 100. That one flipped to bearish as of the Oct. 9 COTs report, due to excessive bullishness on the part of the “dumb money” large speculator crowd. These folks are the big investment firms and hedge funds, which the data shows tend to be wrongly positioned at market turns. In mid-October, they suddenly hit a historically extreme net long position, which my system tells me is a warning sign that a market trend has a high chance of changing.

On the other hand, my setup for the S&P 500—based on trading opposite to the “dumb money” small traders—flipped to bullish with the Sept. 25 COTs report. The wrong-way crowd put on its largest net short position in 12 years as a percentage of the total open interest. The small traders have since slightly reduced their net long position, but remain highly bearish nonetheless, signaling more market gains are likely.

I’ve also developed a COTs U.S. Equity Composite Index based on four of my equity setups. This indicator has been in bullish mode since March. Interestingly, it remained bullish even during last summer’s correction, rightly suggesting that the selloff would be short-lived. Since hitting a high of 1.22 in late September (a reading of “1” or higher means all four setups have just given a bullish signal on average), this indicator has fallen steadily to 0.17 as of last Friday’s COTs report. I take this as a warning that the market’s weakness may not yet be quite over. Nonetheless, the indicator remains above 0, so I still see the data as showing a slight bullish tilt.

As for the Treasuries, all of my setups in this area are now bullish (meaning they’re calling for rates to fall). Falling rates should in turn be positive for equities in some measure—although they could also signal the bond market’s expectations for economic weakness. That, ultimately, may not be so bullish after all in the longer run.

Monday, 5 November 2007

COTs Still Bullish Silver, Some Gold Stocks... But Not All

Is the U.S. dollar oversold? Is gold topping out? Check my latest meanderings on the metals markets and U.S. dollar index inspired by Friday's Commitments of Traders report at the website of bullion dealer Kitco.

Friday, 2 November 2007

COTs Their Usual Sanguine Selves, But Equity Woes May Linger

Another week, another piece of toilet paper, er, I mean dollar. I mean dollar lost. So much craziness. Where do we start? Ah yes, this is where the Commitments of Traders reports come in. Such wise little numbers. I love them so. I've just posted the take from my setups based on this free government data at the main table on the "Latest Signals" page (see Navigation bar).

Looks like another super-quiet week. The COTs are their usual sanguine selves, sticking with all existing signals. My COTs U.S. Composite Equity Index has declined a smidgen to 0.17 from last week's 0.20. Not too good. But not too bad either, though. It's still above zero, which I'd describe as a bullish tilt, and most importantly, it's still on a bullish signal. Might mean the market's still not quite out of the haunted woods yet. As for my COTs Composite Agriculture Index, it's also declined a wee bit to 0.56 from last week's 0.62. But still on a bullish signal, too. For other deep thoughts about today's COTs report, check in back here early next week as per usual. Hope you had a good week and have a happy weekend.

New Setups Say... Bullish for 5-Yr Treasury and Platinum

Isn't it funny how life sometimes puts something special in front of you just when you're despairing? Here I was pulling my hair out trying to work out a decent trading setup for platinum based on the Commitments of Traders reports. After going over the data for a couple of days, I worked out a just barely passable setup based on following the commercial platinum traders.

It scores at the 94-percent confidence level for profitability, and at a sad-sack 73-percent confidence level for beating the underlying market (meaning the average trade would be expected to beat the underlying 73 percent of the time). One consolation is that the setup was in cash 34 percent of the time, but nonetheless, I hesitated to include it in my list. I finally decided to do so with the caveat that I see it as one of several possible indicators for platinum prices, rather than a stand-alone tradable setup (like some of the other less statistically robust setups in my list; see the "Latest Signals" page for the full results). The setup flipped to bullish in the Aug. 14 COTs report, with an eight-week trading delay (meaning executed for the open of Oct. 15).

So I turned my attention to the 5-year Treasury. Holy Mother of God, now that's some fine-looking numbers. A 99.9-percent confidence level for profits, and 99 percent for beating the underlying. That beats even my 13-week T-bill and silver setups, which score next highest. It's based on a combination of my best setups for the large speculators (the "smart money" in this market; yes, you read right) and trading opposite to the "dumb money" commercialsand going to cash when the two groups of traders don't concur.

Yet again, the Treasuries COTs data turns popular notions on their ear. For newbies, the common thinking out there is that the commercials are the ones to follow while the large specs should be faded. My research has found that, while this is true in most markets, it's not in all. My 5-year Treasury setup turned bullish as of the July 31 COTs report (meaning bearish for the yield). This is definitely one I'll be watching with interest.