COTs Timer: Bullish on Banks, but Still Bearish S&P 500

Monday 6 June 2011

Bullish on Banks, but Still Bearish S&P 500

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!

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

2 comments:

Turning Japanese said...: Thanks for the work, Alex. There aren't a lot of comments on your blog, but I imagine there are quite a few people following your COT analysis.; 9 June 2011 at 09:32
Alex Roslin said...: Hi Turning Japanese,

Thanks for your message. This blog gets 300 to 500 page views a day. It used to get a lot more comments, which were mostly questions about how the system works. Then I created my FAQs page to answer the most commonly asked questions, and the comments have dropped off significantly. I also find the comments increase when there's a bull market or confidence. These days, even with the long rallies, many market participants have an overriding sense of nervousness. That makes many people cocoon!

Regards,
Alex; 19 June 2011 at 20:41

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About This Site

I am an active trader and award-winning investigative journalist based in Lac Brome in Quebec's Eastern Townships, just outside Montreal. I have written about investing and business for The Montreal Gazette, Investor's Digest of Canada, Technical Analysis of Stocks & Commodities, Futures & Options Trader, The Financial Post and others. I am not a certified financial advisor and am still refining my COTs Timer system. Please see more disclaimer information below. See my complete profile at the "Intro to COT" link above.

DISCLAIMER

I created this blog to record my personal, subjective observations about the markets, solely for my entertainment and that of interested readers and to foster research. Nothing on this blog should be construed as financial advice or an offer or recommendation to purchase or sell any security. I encourage anyone interested in the markets to do your own homework and/or consult a professional advisor. I am not a certified financial advisor and am still refining my trading system. I reserve the right to modify or stop publishing aspects of my system at any time or to delay updating my tables for whatever reason, or I may not do so in a timely manner. My system has resulted in very large drawdowns in some trades. Past backtested and real-time results are no guarantee of future performance. I will not be liable for any losses or damages of any kind that result from the content of this site. Although I consider the data, calculations and information on this blog to be reliable, I can't make any guarantees and won't be held liable or responsible for anything erroneous on this website. You are solely responsible for implementing safeguards of your data and system when you use this site and its content and links. It is up to the user of this site and content to protect yourself from worms, trojan horses, viruses and the like. I may hold positions in some of the securities mentioned in this blog.