Oh-Oh! Sell Signal for Banks, Cash for NASDAQ

This afternoon's Commitments of Traders data has given me a few interesting new signals in my setups based on these free weekly government reports about trader positioning in futures and options markets. The details are up on my Latest Signals page table. Most notably, my setup for the BKX Bank Index, based on trading on the same side as the large speculators in the three-month Eurodollars contract when they hit specific extreme levels of positioning, has just flipped from bullish to bearish. This setup uses a one-week trade delay, so that means execution is for the open of trading May 5. Also, my setup for the NASDAQ 100 index, about which I was just blogging in a post earlier today here, has gone to cash as of next week's open of trading. This setup combines the signals from the "smart money" commercial traders and "dumb money" small traders. If you follow the bright lights out there and avoid the wrong-way crowd, how can you go wrong! Turns out that the commercial traders have reduced their net long position as a percentage of the total open interest to an extreme level of bearishness, which has flipped my commercials setup to a sell. When the two signals don't concur, the overall NDX setup goes to cash. Have a good weekend and good luck next week!