Data Turns up Somewhat for Banks

After worrisome Commitments of Traders data last week, the figures reported Friday have turned up somewhat for U.S. banks. See my just-updated latest signals table for details. The large speculator total open interest in the three-month Eurodollar contract has jumped up nicely - which tends to be positive for U.S. financials - but the small trader total open interest has declined. My trading setup for the BKX U.S. Bank Index goes into its fifth week being bullish.

Meanwhile, my trading setup for the 30-year Treasury bond has gone bearish for Monday's open of trading (meaning the yield would go up). Also, my setup for natural gas is bearish next week, then flips to bullish the week after. And finally, my Nikkei setup goes to cash on Monday's open after after 10 weeks bullish. It then goes to bearish the week of Sept. 13.

For the S&P 500, my setup remains bullish a seventh consecutive week. But look at how the "smart money" commercial hedgers continue their fifth straight week of getting less relatively bullish in relation to the recent data. They're still fairly far from flipping to an officially bearish posture, by the standards of my testing. But that's where the trend is headed at this point. Meanwhile, the wrong-way small traders have suddenly gotten a lot more willing to bet on the market - usually a worrisome sign if such a trend continues and their net positioning hits an extreme of bullishness.

Hope you had a good weekend, and good luck next week. Be sure to tune back in early this coming week for an update of my portfolio page.

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