Sunday, 21 March 2010

Going Long Gold, Gas; Ominous Bank Data

I've just updated my latest signals table based on Friday's Commitments of Traders data. New signals: crude oil, which is now bullish, will turn bearish on the open of the week of April 19, and gold, until today in cash, goes bullish on tomorrow's (Monday's) open of trading. Gold looks set to remain bullish for up to five weeks based on the COT data.
Also, from last week's data, natural gas goes bullish on Monday's open, too. Gas, which has seen a bloodbath in recent weeks, could be further buoyed by the fact that the small trader and large spec net positions as a percentage of the total open interest - which both correlate strongly with natural gas prices the next week - have both jumped up nicely, as you'll note on my latest signals table.

In other news, the wrong-way S&P 500 small traders have again gotten more bearish in their futures and options positioning - fading the rally as they've done since early January. Doh! Meanwhile, the "smart money" commercial hedgers are a mite less bullish in their positioning, but still light-years from getting bearish enough to flip my trading setup to bearish. It remains bullish.

Of special interest is the three-month Eurodollar data, which gives me signals for the BKX U.S. Bank Index. The large spec total open interest correlates nicely with BKX, but it has just fallen off a cliff, as you'll see on my table. A very dramatic reversal. Oh-oh.

Hope you did well last week and continue to do so this coming week. Check in early this week for an update of my portfolio page.

1 comment:

ARAK said...

3/26/10
Commercials just turned bearish, while large specs capitulated.