Seven New Signals This Week From COT Data

Whole bunch of new signals take effect this week based on the latest trader positioning data as disclosed in the weekly Commitments of Traders reports.

See my latest signals table for all the details. It's been a long time since I've seen so many new signals take effect at once. Enjoy!

Hope you're having a good holiday, and best wishes for 2013!

Bevy of New Signals From Commitments Report

New trading signals for the S&P 500, crude oil, silver and the 30-year Treasury bond based on the latest Commitments of Traders report issued this afternoon. See my latest signals table for the update.

Sorry for the abbreviated post. I'm on the road travelling to sunny Costa Rica!

Merry Christmas and Happy Holidays!

Going Short Natural Gas Thanks to COT Data

One signal takes effect on next week's open of trading based on the weekly Commitments of Traders data: bearish for my trading setup for natural gas.

This comes after large speculators and small traders got significantly bearish in their total open interest in natural gas futures and options in recent weeks.

The signal will last at most two weeks, however, because small traders got substantially more bullish in the latest COT report issued Friday.

See my latest signals table to inspect the detailed data on the trader positioning in this and the other markets I follow using my COTs Timer trading strategy, which is generally bullish on equities these days but neutral-to-bearish on commodities and the 30-year bond. Good luck next week.

S&P 500, Banks Bullish Next Week, Not So Copper

The bullish bent of trader positioning continues for a fourth consecutive week in the Commitments of Traders reports.

I've got two trading signals taking effect on next week's open of trading based on the weekly COT data:

- bullish for the S&P 500 (after being bearish since Aug. 20)
- bullish for the benchmark BKX U.S. Bank Index, a basket of leading financials

See my latest signals table for more details.

There's some countervailing news, however, in the copper market. The "smart money" commercial hedgers, whom I trade alongside in my copper setup, have suddenly gotten a lot more pessimistic in their net futures and options positioning, pushing my signal to bearish on next week's open.

Good luck next week.

Sneaky COT Data Looks Maybe, Possibly Bullish... But Who Knows!

The drumbeat of bullish news continues in the latest Commitments of Traders report issued Friday.

My signal for the Nikkei goes to bullish on the coming week's open of trading. Also, my trading setup for the 30-year Treasury bond goes bearish (meaning yields would go up, also typically a bullish sign).

As reported last week, my S&P 500 signal, which has been bearish since August 20, goes bullish on the open of trading in a week's time on Dec. 10. That's due to the more optimistic recent net positioning of the "smart money" commercial hedgers in S&P 500 futures and options, as you can see on my latest signals table.

But of course, we never know what will happen! All this trader positioning could be completely wrong for all I know. It's happened in the past often enough. In fact, I think making overly bold forecasts might be a good way to jinx myself and help ensure my positions don't work.

So I'll go ahead right now and say there's an excellent chance the COT data is just tricking me and that a horrible holiday season for the markets could very well await, no doubt due to some new craziness in D.C. or Europe.

Knock on wood.

More Bullish News in Latest COT Data

More bullish news in the latest holiday-delayed Commitments of Traders report.

A new signal takes effect this week: Nikkei to cash after seven weeks being bearish.

Also, my S&P 500 signal, which has been bearish since Aug. 20, will go bullish on the open of trading the week of Dec. 10.

That's based on the "smart money" commercial hedgers getting significantly more bullish in their net futures and options positioning in the latest weekly COT report, as you can see on my latest signals table.

Good luck this week.

Holiday Delay

This afternoon's normally scheduled Commitments of Traders report is delayed until Monday afternoon because of the Thanksgiving holiday.

See you back here after that report is issued.

Happy Turkey Day to U.S. readers!

COT Data Looking Up for Banks, Crude

After several months of generally bearish posturing, large traders seem to be swinging into somewhat more optimistic territory, according to the latest Commitments of Traders report issued Friday.

While my S&P 500 setup remains short for now, other markets are looking a little more bullish in time for the seasonally favourable pre-Christmas period, which is typically a positive time for equities.

My signal for the benchmark BKX U.S. Bank Index, based on trader positioning in the 3-month Eurodollar contract, goes bullish as of next week's open of trading, as you can see on my latest signals table.

And crude oil will be bullish as well.

Also, my currently bearish Nikkei signal will go to cash or possibly bullish in one week's time. (It remains bearish this coming week.)

Positioning in gold and silver in the past two weeks is also looking a little more bullish - or at least less bearish - possibly a sign of post-election U.S. dollar weakness. That, too, is typically positive for U.S. equities.

See my latest signals table for more details on trader positioning in these and the other markets I trade using the free weekly COT data issued by the U.S. Commodity Futures Trading Commission.

Good luck next week.

COT Data Puts Natural Gas, Silver Into Cash

Two signals taking effect on this week's open: cash for natural gas and silver. That's based on my trading strategy based on the weekly Commitments of Traders reports from th CFTC.

See my latest signals table for more details on these and the other markets I follow. Sorry for the late post. I updated that table Friday but didn't have a chance to write a post about it until now. Good luck this week!

Banks Back to Cash After a Week Bearish

One signal takes effect on next week's open of trading based on the latest data on trader positioning in the weekly Commitments of Traders reports.

My trading setup for the BKX U.S. Bank Index, a benchmark for U.S. financials, goes to cash after a week being bearish.

All other signals remain the same. What are they? Why, see my newly updated latest signals table for all the details.

Hope readers in the areas affected by Sandy are okay, and good luck next week. Should be loads of fun with the U.S. election Wednesday!

Bullish for Natural Gas, Bearish for Banks and Gold, Cash for Crude and Bond

A bunch of signals take effect on Monday's open of trading based on the latest Commitments of Traders data:

- bullish for natural gas
- bearish for the BKX U.S. Bank Index and gold
- cash for crude oil and the 30-year Treasury bond

Other signals remain the same. See my latest signals table for more details on trader positioning in all the markets I'm covering using the free weekly COT data from the U.S. Commodity Futures Trading Commission.

Hope you had a good weekend, and good luck this week.

Banks, Copper to Cash This Week; Natural Gas Flips to Bullish Oct. 29

Two signals take effect on next week's open of trading based on the latest trader positioning as revealed in Friday's weekly Commitments of Traders report:

- BKX U.S. Bank Index: Goes from bullish to cash.
- Copper: Goes from bearish to cash.

Also, natural gas, now bearish, goes bullish on the open of trading the week of Oct. 29.

Check my latest signals table for more details on positioning in these and the other markets I follow using the Commodity Future Trading Commission's free weekly COT data. Good luck this week.

Natural Gas, Crude to Bearish Next Week, NDX Bullish

More fun confusing signals from the latest Commitments of Traders report from the good ol' CFTC. My trading setups based on this nifty free weekly data on trader positioning are as follows, starting with signals taking effect this coming week:

- Nasdaq-100: Goes bullish on Monday's open of trading.
- Natural gas: Goes bearish on Monday's open.
- Crude oil: Bearish on Monday's open.

See more data on trader positioning in these and my other markets on my latest signals table. And now for my existing signals:

- S&P 500: bearish
- BKX U.S. Bank Index: bullish
- Nikkei: bearish
- Gold: cash
- Silver: bearish
- Copper: bearish
- 30-year Treasury bond: bullish

Have a great weekend, and good luck next week.

Commitments Data This Week: Bullish for Banks, Bearish for Japan... And for Oct. 15: Bearish for Natural Gas

A sudden break appeared Friday in the otherwise generally bearish tone of the recent trader positioning as shown in the weekly Commitments of Traders data.

My trading setup for the BKX U.S. Bank Index has gone to bullish for the coming week's open of trading. See my latest signals table for more details on the trader positioning in this and my other setups.

At the same time, my setup for the Nikkei Stock Average goes to bearish this week. And my other existing signals remain the same, including bearish for the S&P 500, Nasdaq-100, silver and copper.

Natural gas, meanwhile, remains in cash this week but then goes bearish in a week, on Oct. 15.

Happy Thanksgiving to Canadian readers, and good luck this coming week.

Bearish Nasdaq-100 Signal One of Four New Signals From COT Report

Quite a few new signals taking effect on next week's open of trading based on my trading signals built around the free weekly Commitments of Traders data:

- Nasdaq-100: After a week of cash, NDX goes back to bearish. It was bearish nine weeks previously, losing 9.7%. Hopefully, this time around will be better! Large speculator positioning, which my setup fades, remains highly bullish this past week.

And commercial trader positioning, which my setup trades alongside of, has reversed from last Friday's bullishness back to doom and gloom.

- Nikkei: Fifteen weeks in the bearish column are over for this setup for at least a week and possibly more. That depends in part on the commercial total open interest, which got suddenly quite bullish two weeks ago, then reversed a got a heck of a lot more bearish again.

The small trader open interest remains steadfastly bearish, but who knows what next week will bring!

- Natural gas: Another winning signal (knock on wood! - a lot can happen before the open of trading) from my favourite trading setup. This one was bullish for just a week and goes to cash on Monday's open. Trader positioning already looks set in a bearish direction, and we could see this setup go short in two weeks' time if traders keep doing what they're doing right now.

- Copper: This setup is back to bearish after three weeks in cash.

See my latest signals table for more details on trader positioning in these and the other markets I follow using the U.S. Commodity Futures Trading Commission's COT data. Good luck next week.

Natural Gas Bullish Next Week, Nasdaq-100 to Cash

Natural gas goes bullish on next week's open of trading, according to my trading signal based on the free weekly Commitments of Traders data.

It'll be a short-lived signal, lasting just a single week. But gas moves fast, so it could still move far even in one week.

And my Nasdaq-100 signal goes from bearish to cash on next week's open.

These and my other setups are now updated on my latest signals table, showing trader positioning in a bunch of markets based on the COT reports from the U.S. Commodity Futures Trading Commish.

Good luck next week! And be sure to share this post with others and to click the social sharing buttons below.

Quiet Week in COT Data

No signals take effect on this week's open of trading in my trading system based on the free weekly Commitments of Traders reports. (Note, however, my addendum to my post last week about my copper signal: I only realized while doing this week's data update that copper went to cash on last week's open.)

My existing signals remain the same: bearish for the S&P 500, Nasdaq-100, Nikkei and silver; bullish for the 30-year Treasury bond and cash for everything else (BKX U.S. Bank Index, natural gas, gold, copper and crude oil).

Commitments Data Puts Gold, BKX in Cash

Two signals take effect on Monday's open of trading in my trading strategy based on the weekly Commitments of Traders reports:

- My bullish gold signal goes to cash.

- My bearish signal for the BKX U.S. Bank Index goes to cash too.

The gold signal did pretty well - up 25.2% in five weeks using a 300% leveraged ETF as of Friday's close. But I gave some of that back with that wrong-way BKX trade, which lost 9.8% in a holiday-shortened week of trading, also using a 300% leveraged fund.

(I'm using the leveraged funds not because I'm especially risk-loving, but just because I had funds tied up in other trades and wanted to get as close as I could to my maximum portfolio allocation for those two setups.)

Other signals remain the same this coming week. See my latest signals table for details on trader positioning in all the markets I'm trading using the nifty free COT data from the U.S. Commodity Futures Trading Commission, which details trillions of dollars in futures and options bets in 150-plus markets.

Have a good weekend, and good luck next week.

CORRECTION (Sept. 15, 2012): I just noticed that my copper signal also went to cash on last week's open. I hadn't noticed and kept my position a week longer than I should have. Apologies for neglecting to note this in my post last week.

Silver, Banks Bearish Based on CFTC Data

Add silver and the BKX U.S. Bank Index go my growing list of setups in the bearish column based on the weekly Commitments of Traders data from the CFTC. The latest COT data gave those two setups a bearish signal for this week's open of trading.

See my latest signals table for more details on these and the other markets I follow.

Now I'm heading back to the Brome County Fair and more fun (including blooming onions - yum!) Hope you have a good long weekend too, and good luck this coming week.

Bearish Downturn in COT Data Accelerates

Now it's the turn of the metals to confirm the broad downturn in trader positioning in the weekly Commitments of Traders data from the CFTC. Friday afternoon's COT report had more bad news for bulls.

It pushed my setup for copper out of cash into the bearish column, as you'll see on my latest signals table. It also ended my silver setup's long-time bullish signal and put it in cash. That setup would have gone short if the commercial hedgers had gotten just a little more bearish in their net position as a percentage of the total open interest.

In gold, the wrong-way small traders got heavily bullish - another bearish development. But their signal has a two-week trade delay, so gold remains bullish for the time being. 

And natural gas is also seeing heavily bearish positioning, though it remains in cash next week.

My S&P 500 and Nasdaq-100 setups remain bearish as before, while my 30-year Treasury bond signal is bullish again next week (meaning the yield would fall - which is generally bearish for equities). Have a good weekend, and good luck next week.

Bond Data Turns Bullish in CFTC's Commitments of Traders Report

One signal takes effect on next week's open of trading based on the latest Commitments of Traders data from the CFTC: bullish for my setup for the 30-year Treasury bond (meaning the yield would fall).

The latest trader positioning (you can see details on my latest signals table) shows the "smart money" commercial hedgers remaining heavily bearish in their derivatives positioning in the S&P 500 as a percentage of the total open interest. That setup is bearish, despite the recent rally.

My NASDAQ-100 setup is also bearish.

In fact, the bullish bond signal suggests mounting overall bearish positioning in the COT data, with the only other bullish signals being gold and silver. That contrasts strongly with the bullish positioning in my discretionary positions based on chart price action.

What could it mean?

Have a good weekend pondering that, and good luck next week!

Natural Gas: Another Win for Commitments of Traders Data

I don't want to jinx myself, but it looks like tomorrow's open of trading will bring another profitable trade for my natural gas setup based on the weekly Commitments of Traders reports. (See my latest signals table for more details on my signals this week.)

This setup is without doubt the star of my COT setups. Anyone who doubts whether this free data from the CFTC has any value can just take a look at the results from trading the natural gas data with my signal. Since June 2009, it's returned 93 percent (not including my current short position, which closes on tomorrow's open), while natural gas itself has fallen 28 percent.

That's based on a good sample of 31 trades, 24 of which were profitable (a 77-percent batting average). The average trade has lasted 2.4 weeks, which means I was in the market about 70 percent of the time.

I'm always curious to see how natural gas moves during my positions. Using technicals, I would have almost never placed trades at the same spot as the COT data tells me to. In fact, the price sometimes moves strongly against the position at first.

The latest trade is another example. My short position started on July 23, and the first week saw the signal lose money as gas pumped higher as part of its rally since mid-June. It even broke out on the daily chart through a couple of Tom DeMark Setup Trendlines, meaning I might have gone long.

But the last two weeks have seen a serious selloff, and the trade is now up 12 percent in three weeks using the 200-percent leveraged HND fund in Toronto. (The UNG fund in New York is down 8.6 percent.)

Hopefully my other recently revised setups will do as well! The jury's still out right now, and it took me about two years or more of trading with my gas setup for me to see a consistent pattern in the returns.

Gas goes to cash on Monday's open, and there are no other trades taking effect next week based on my COTs Timer system. Good luck this week!

Monday morning update: After today's open, my HND trade ended with a 12.6-percent gain, making my total return for this setup in the past three years 105 percent with 25 profitable trades out of 32 (a 78-percent win record) - knock on wood!

It's not to gloat. I know the setup could stop working tomorrow, and my other setups don't do nearly as well. But it gives me inspiration to think I could replicate these results in other markets using the COT data, and that's what I tried to do when I revised my other setups recently. Good luck again this week.

Smart Money Commercial Hedgers Dump S&P 500, Signal Flips to Bearish

It's been a long climb back to my entry price for my S&P 500 signal, which has been bullish since March 26.

For most of that time, the signal was in the red -- but just this last week, it's scraped and clawed its way back to just a hair below the entry level of 1,397.11.

And now, after all that, my setup for the S&P 500 goes to bearish as of the coming week's open of trading!

This is based on a sudden collapse in the "smart money" commercial hedgers' futures and options positioning as a portion of the total open interest, according to Friday's Commitments of Traders report from the U.S. Commodity Futures Trading Commission.

My gold setup also switches out of cash (where it's been two weeks) back to bullish as of Monday's open.

And my 30-year Treasury bond signal goes from bearish to cash. Ironically, I notice that my position hit its stop level when the bond briefly sold off Thursday. Alas, the bond bounced right back, and the signal would have been in the money if I hadn't been stopped out.

But I'm not too upset. I think it's 100 750 billion times more important to follow my signals religiosamente than to ignore a stop on the off-chance that the position will come back. That kind of second-guessing can screw you up big-time.

See more details on these and the other markets I trade using the COT data on my latest signals table. Good luck next week.

Copper to Cash, Bond Bearish

Two signals take effect on the coming week's open of trading based on the latest Commitments of Traders report: copper goes to cash after two weeks bearish, and the 30-year Treasury bond goes bearish (meaning yields would go up, if the signal is correct).

All other signals remain the same: bullish for SPX and silver, bearish for NDX and natural gas, and cash for the other markets I follow.

See the detailed trader positioning from the CFTC's COT data on my newly updated latest signals table. Good luck this week!

Gold to Cash; Gas, NDX Bearish

Three signals take effect on this coming week's open of trading based on the latest Commitments of Traders data from the CFTC. See my latest signals table for details:

- Gold to cash after a good long while bullish.

- Natural gas goes to bearish.

- Nasdaq-100 goes bearish.

All other signals remain the same this week. Good luck!

Nasdaq-100 Goes to Cash, Copper Bearish After Four Months in Cash

Two signals take effect on Monday's open of trading based on Friday's Commitments of Traders report from the Commodity Futures Trading Commission.

My Nasdaq-100 signal goes from bearish last week to cash this week, and my setup for copper goes bearish after four months in cash. The latter signal comes about because of an increase in bearishness of the commercial traders in copper futures and options.

See my latest signals table for more details on trader positioning in these two markets. Also see which two other markets are about to see new signals in the next two weeks.

Hope you had a good weekend, and good luck this week.

New COT Signals: Banks and Crude to Cash, Nasdaq-100 Bearish

Finally got my signals from the latest holiday-delayed Commitments of Traders report now up on my latest signals table. New signals taking effect on this week's open:

- BKX Bank Index: goes to cash
- Nasdaq-100: goes bearish
- crude oil: goes to cash

Sorry for the delay in posting these. Had a busy time, and couldn't get to it sooner. Now off to trade these new positions.

Good luck the rest of this week.

Holiday Delay

This week's usually scheduled Commitments of Traders report from the Commodity Futures Trading Commission is delayed until Monday afternoon because of the July 4 holiday. Have a good weekend! See you back here after Monday's release.

COT Data Turns Bullish for Crude Oil

A new signal takes effect on the coming week's open of trading based on Friday's Commitments of Traders report from the Commodity Futures Trading Commission: bullish for crude oil.

That's based on the small traders getting significantly more bullish in their futures and options positioning as a percentage of the total open interest. My crude oil signal is based on following the small traders and fading the large speculators.

See my latest signals table for more details on the crude positioning and what traders are doing in the other nine markets I'm following using the CFTC's free weekly COT report data.

My other signals remain the same as last week: bullish for the S&P 500, BKX U.S. Bank Index, gold and silver.

To Canadian readers, have a Happy Canada Day weekend, and U.S. readers have a Happy July 4. Good luck next week.

Cash Signals Point to Trader Uncertainty

The market's uncertainty is clear in the latest Commitments of Traders report from the CFTC.

Trader positioning in Friday's COT report puts three of my signals into cash on next week's open of trading: the Nasdaq-100 and crude oil (both of which had been bullish) and the 30-year Treasury bond (which had been bearish).

Meanwhile, my S&P 500, BKX U.S. Bank Index, gold and silver setups remain bullish for now.

See my latest signals table for more details on trader positioning in these and the other markets I follow using the free weekly COT reports.

Have a good weekend, and to Quebec readers: Joyeuse St-Jean!

Crude Bullish Signal Bodes Well for Equity Rebound

My trading setup for crude oil goes bullish on this coming week's open of trading after four weeks in cash. Meanwhile, my signal for the Nikkei goes from bullish to cash on the coming weekly open.

Those signals and other data are now up on my latest signals table, which reports on trader positioning in 10 markets I trade using the weekly Commitments of Traders data from the U.S. Commodity Futures Trading Commission.

Overall, the CFTC data appears to be balance bullish this week, signalling favourable odds of a market bounce off the recent weakness. The crude signal is bullish overall for the equity market, and three of my four equity signals are bullish.

The Nikkei, which goes to cash this week, isn't highly correlated with North American equities, so its signal this week isn't necessarily a bearish sign either.

But who knows! The data is often wrong, so do your own homework.

Good luck this week, and Happy Father's Day to all you dads and granddads and great-granddads, etc. My wife and daughters took me to Burlington, VT, and then dinner at the amazing Crossing restaurant in Richford (famous for their peanut butter pie and steak). Wow.

Wow.

So good.

Thanks, girls! I love you.

Banks Going Bullish, Equities Turn Corner?

Only one signal takes effect on this coming week's open of trading in my COTs Timer trading strategy based on the weekly Commitments of Traders reports: bullish for my trading setup for the benchmark BKX U.S Bank Index.

The signal comes as a result of a decline in bearish derivatives positioning by the large speculators in the three-month Eurodollar contract (an important measure of liquidity).

All my other equity signals have been bullish for at least several weeks, so this might mean the corner has been turned on the recent market selloff. But who rightly knows! My signals based on the free COT report data are certainly known to be wrong at times.

See my newly updated latest signals table for more details on positioning in the Eurodollars and other markets I'm following with my strategy. Good luck this coming week.

Natural Gas Short Ends Crazy Ride in Black, Going to Cash

Mostly quiet in trader positioning as reported in this afternoon's Commitments of Traders report.

What's the COT report? you ask.

Why, it's the free weekly data on futures and options positions in major markets released by the U.S. Commodity Futures Trading Commission.

One signal takes effect on next week's open of trading: my trading setup for natural gas goes to cash after being short four weeks. That trade was a real roller coaster - deeply under water at first, then back into the black this past week. Natural gas is craaaazy! Not for the faint of heart, friends.

See my latest signals table for more details on trader positioning in gas and other markets I'm covering using the COT data. Have a good weekend, and good luck next week.

Update Done

Just finished updating my latest signals table based on Friday's Commitments of Traders results. Sorry for the delay in the update. I was interrupted part-way through my update before the open this morning when Google Docs crashed. Good luck this week!

Banks to Cash, Bond Bearish

Two new signals take effect this morning in my COTs Timer trading strategy: cash for my trading setup for BKX U.S. Bank Index (which was bearish for a single week last week) and bearish for my the 30-year Treasury bond (meaning bullish for the yield).

I was in the middle of updating these and my other signals on my latest signals table with the latest Commitments of Traders data, but it looks like Google Docs decided to crash while I was only half-way done. Thanks a lot, Google!

I'll finish updating the table after Google Docs comes back online. Apologies. Good luck this week.

Banks Bearish, Crude to Cash

Two new trading signals take effect on next week's open of trading: bearish for the BKX U.S. Bank Index (this signal will last only one week) and cash for crude oil. The bearish signal for my new crude oil trading setup had been doing nicely, and I was just wondering how long the good times can last.

That's not the case for some of my other current signals, but what interests me more is how the trade does when the signal ends. Of course, I don't expect every trade to be profitable either. Read more on my thinking about losing trades on my FAQs page.

See details on trader positioning in the two above markets and the other markets I follow on my newly updated latest signals table.

The signals are based on the free weekly Commitments of Traders data issued by the U.S. Commodity Futures Trading Commission - God bless 'em. Hope you did well this past week, and have a good weekend.

New Nasdaq-100 Signal Flips to Bullish

Sorry for my late post this week! I must have got caught up in Mother's Day and am still sleeping off the festivities.

I did manage to update my latest signals table last Saturday, so if you checked there you would have seen what my signals are doing based on the weekly Commitments of Traders reports from the CFTC. To wit:

- My new Nasdaq-100 trading setup went bullish on this week's open of trading. That's based on super-bullish positioning by the "smart money" commercial hedgers and extremely bearish positioning by the wrong-way large speculators, whom I fade.

- Other signals remain the same: bullish for SPX, gold, silver and the Nikkei; bearish for crude oil, natural gas; and cash for the BKX U.S. Bank Index, copper and the 30-year Treasury bond. Good luck the rest of this week, and see you back here after this Friday's COT update.

New Silver Setup Went Up 90-Fold - Currently Bullish

Silver went up more than six-fold between 1995 and mid-2011. Meanwhile, my new trading setup for silver went up over 90-fold in backtesting.

Like the other setups in my COTs Timer trading strategy, my signals for silver are based on the Commitments of Traders reports - the free weekly data on trader positioning issued by the U.S. Commodity Futures Trading Commission.

My silver setup is currently in its fourth week of being bullish. It is based on trading alongside the "smart money" commercial hedgers in silver futures and options and trading in the opposite direction as the wrong-way small traders, who tend to be wrongly positioned at key market turns. The setup is in cash when the two groups of traders don't give the same signal.

See my newly updated latest signals table and backtesting results page for more details on this setup and what the silver COT data is saying these days.

I test the COT data to find levels of trader positioning that were historically followed by price moves. I use a variety of statistical techniques to identify signals that not only gave good profits, but also that did so reliably. In fact, the reliability of the signals is far more important to me than the levels of profits. See my FAQs page for more on my backtesting process.

I should soon add a setup for the Euro/USD cross.

Good luck the rest of this week, and see you back here after Friday's COT release for another weekly update.

NDX to Cash, Nikkei Bullish, Natural Gas Bearish

Exciting times here at COTs Timer world headquarters, where we bring you the latest in developments in the beautiful and talented world of the Commitments of Traders reports. Well actually, we mostly just report on how the CFTC's weekly data on trader positioning looks week to week - and what signals we get for the markets we cover.

And on that note, without further ado, here are the signals I've just had the pleasure of noting on my newly updated latest signals table. First, here are the signals taking effect on this coming week's open of trading:

- Nasdaq-100 Index: goes to cash after one week bearish
- Nikkei: goes to bullish after two weeks in cash
- natural gas: goes to bearish after a week bullish

And here are my other, existing signals for my COTs Timer trading strategy:

- S&P 500: bullish
- BKX U.S. Bank Index: cash
- gold: bullish
- 30-year Treasury bond: cash
- copper: cash
- crude oil: bearish

See details on trader positioning in all of these markets and other trading information for my setups on my latest signals table. Also as noted in this post last week, I've updated my backtesting results table (scroll down for the link) to include the results from all of my newly updated setups.

Good luck this week.

Nasdaq Signals Gained 1,800%, While Market Fell 70%

My new trading setup for the Nasdaq-100 Index gained 1,800 percent since 1999, while the index itself lost 70 percent, according to my backtesting results using detrended price data. (Scroll down to the "Backtesting Results Table.")

And my new setup for the Nikkei went up 680 percent, while Japan's stock index fell 40 percent.

These are some of the new results I've posted for four new trading setups that give me signals based on the free weekly Commitments of Traders reports. These reports are issued by the U.S. Commodity Futures Trading Commission and reveal trillions of dollars of trader positioning in 150-odd markets - everything from gold to crude oil, the Canadian dollar and S&P 500 futures and options.

I've been developing my COTs Timer trading strategy based on the COT data for several years and using myself as a guinea pig to trade my signals in real time since 2007. I've just gone through a major updating process and have been improving my backtesting process based on my experiences.

I've posted the backtesting results for the Nasdaq-100 (which are based on the Nasdaq-100 mini COT data), the Nikkei, the benchmark BKX U.S. Bank Index (which are based on the three-month Eurodollar contract - the liquidity measure, not the currency) and the 30-year Treasury bond.

I've also just updated my latest signals table to include signals and data from all of these new setups. See my FAQs page for more details on my backtesting process.

Thanks for your suggestions for new markets to test using the COT data. I plan to work on silver and the Euro/USD cross next.

Your comments and suggestions are welcome. I'll also post a new sample spreadsheet for my S&P 500 setup soon on my DIY page. Thanks for your patience, support and kind words through this process.

Good luck the rest of the week, and see you back here after Friday's COT release.

Going Long Natural Gas... But Just for a Week!

New data now up on my latest signals table for my trading setups based on the weekly Commitments of Traders reports. One signal takes effect on Monday's open of trading: bullish for natural gas.

Gas aficionados know it's been collapsing straight through to the Earth's core for, what, years? The trader data, as reported in the CFTC's COT reports, suggests a chance of a bounce next week. Or at least that's how I see it. Gas has indeed been rallying in the past few days, but I didn't see a technical reason to jump in just yet.

How nice that the COT data gives me the excuse!

But hark, don't get too excited, you gas bulls. The long signal will last just one week. The following week, my gas trading setup says to go short.

See my signals table for more details on this and the other markets I follow using my COTs Timer trading strategy based on the COT reports. Check there to see my signals for the S&P 500, gold and crude oil. (The others are in cash for the coming week.)

In other news, I've just finished backtesting on the NASDAQ-100 mini COT data. It's the first time I've taken a look at the mini COT data in a few years, and I can tell you it's produced a very promising (knock on wood!) setup. I should start using those signals as of my next update.

Have a good weekend, and good luck next week.

Three New Signals: Bonds, Banks and Nikkei

I've just updated my latest signals table with the signals from my three latest new trading setups based on the weekly free Commitments of Traders reports: the 30-year Treasury bond (bullish), the BKX U.S. Bank Index (cash) and the Nikkei (cash).

I just finished backtesting these three new setups and think they had excellent results. We'll see how they work out in real-time trading.

That means all my trading setups have now been updated except for the one for natural gas, which I'm not in any special hurry to update because it's had such sweet results in actual trading (about a 100-percent profit in the two years I've traded it, while natural gas has collapsed in price).

I am still going to eventually update it, but I'm planning to introduce a few new setups first, starting with the Nasdaq 100 Index.

Here are the signals for my other setups: S&P 500 bullish, crude oil bearish, gold bullish and natural gas in cash. See my latest signals table for detailed information on trader positioning in these markets based on the COT data issued by the U.S. Commodity Futures Trading Commission.

I'll post the testing results soon on my backtesting results table for the three new signals.

Good luck this week.

New S&P 500 Signals Beat Market by 1,500%, Crude Signals by 12,000%

The results are in. My new trading setup for gold beat the market by 570%, while being in cash 40% of the time. My new copper setup beat the market by nearly 3,000%.

And my crude oil signals beat it by over 12,000%.

Signals Based on Free Weekly Data

Those are some of the backtesting results I've just posted for my four new trading setups based on the amazing Commitments of Traders reports issued for free each Friday afternoon by the U.S. Commodity Futures Trading Commission. See my backtesting results table (scroll down) for details.

You'll also see the parameter values for one of the new setups - S&P 500 (which, incidentally, beat the market by more than 1,500%). I'll post a sample spreadsheet for that setup soon on my DIY page.

Robustness, Not Just Profits

But I didn't just focus on profits when I was looking for new setups to trade using the COT data. In fact, that only had a small impact on which setups I chose. Far more important were measures of robustness (how reliable the signals would be in actual real-life trading), such as my very own invention - the walk-around test. See my FAQs page for more details on that.

To recap, I've been updating my setups based on the COT data because my existing setups were based on data up to Dec. 2007 - meaning it didn't include the crazy gyrations of the Great Recession.

The setups were in need of updating with the more recent COT and market data - not least because a properly backtested trading system is thought to provide robust signals for perhaps a quarter of the original backtesting period (in this case, about 13 years).

Improved Results Table

Apart from updated data for my new setups, you'll also notice I've removed from my table the backtesting results for my three existing setups that I haven't yet updated using data between 2007 and 2011.

I've made a few small changes to improve that table and give more useful results - so rather than updating those results for the old setups that I'm planning on replacing soon anyway, I've just taken off that data.

Thanks!

Thanks for your patience during my updating process. I'm hopeful my improved backtesting procedures and updated setups will adequately capture the power that appears to exist in the COT data - waiting to be unleashed!

Existing Signals All Still Good

No new signals for the coming week in my COTs Timer trading strategy based on the weekly Commitments of Traders reports.

This is the free data that the U.S. Commodity Futures Trading Commission puts out to tell us the weekly positioning of major trading firms in about 150 markets. Everything from the U.S. dollar to crude oil, gold, soybeans, S&P 500 futures and natural gas is covered.

See my latest signals table for details on how my trading setups are interpreting the COT data.

My existing signals all remain in effect next week: bullish for the S&P 500 (the sixth week on this signal), third week in cash for the benchmark BKX U.S. Bank Index (a basket of the major U.S. financials), second week bearish for crude oil, second week long for gold, ninth week bullish for Nikkei, eighth week in cash for natural gas, fifth week in cash for the 30-year Treasury bond and sixth week in cash for copper.

Have a good weekend, and good luck next week.

Announcing: New Trading Signals!

Just updated my latest signals table with the signals from my four brand spanking new trading setups (S&P 500, gold, copper and crude oil) based on the weekly Commitments of Traders data issued by the CFTC.

Two signals take effect on the open of next week: bearish for my new crude oil setup, and bullish for gold. Also note that my new copper setup is in cash.

And my new SPX setup remains bullish based on strong bullish positioning by the commercial hedgers.

Also see my signals table for new parameter values for those new setups. I'll update my backtesting results table soon with more details.

I'll be on the road for a few days next week going back to Canada after a beautiful three-month stay in Costa Rica's Nicoya peninsula (highly recommended!)

But after we get settled back in, I'll get back to work updating my other existing setups, which shouldn't take too long now that I've improved the automation of a bunch of my backtesting.

And I'll be aiming to add new setups in markets I'm not trading now. Your suggestions for which ones to cover are welcome. Good luck next week.

Banks Back to Cash

All fairly calm in the mysterious world of the Commitments of Traders reports this week. The single changed signal is in my BKX U.S. Bank Index trading setup, which goes from bearish to cash as of Monday's open of trading.

See my latest signals table for more details on this and the other markets I'm following using the free weekly COT reports issued by the U.S. Commodity Futures Trading Commission.

New Setups: Gold, Copper and SPX

In other news, I've developed new setups for gold and copper this week using some improved and more highly automated backtesting procedures I've been working on. I'm pretty excited (knock on wood) to start using those signals because I think my new testing procedures are showing some very interesting results.

Also, I've used those to go back and take a fresh look at the S&P 500 data, and I have a slightly modified setup to announce for that data too.

Like the new setup I started using a couple of weeks ago, this one also uses just one group of traders: the commercial hedgers.

Announcing: New SPX Setup Parameter Values

It uses a 12-week moving average/standard deviation period and goes long when the COT position is 0.2 standard deviations or more above the moving average, while it goes short when the COT position is 1.2 standard deviations or more below the moving average.

Undetrended Data!

The major difference I've integrated into my backtesting in the past few weeks is that I'm now including results from undetrended (that's a mouthful!) price data from my confidence interval testing for whether the setup beat the market historically after trade commissions were deducted.

While I normally use detrended data for backtesting, I noticed some high-performing setups scored poorly in the confidence interval results when I looked at the raw undetrended data. Those setups could have a higher chance of underperforming in real-life trading, so I've been including those results in my testing.

I'll post the new gold and copper setup info shortly. Next up after all this: a new setup for crude oil.

Good luck this week.

Bank Setup Short While SPX Stays Long

U.S. financials could be headed down, according to my trading setup for the benchmark BKX U.S. Bank Index. My setup goes bearish on Monday's open of trading.

This is based on bearish positioning in the 3-month Eurodollar contract, as shown in the weekly Commitments of Traders reports issued by the U.S. Commodity Futures Trading Commission.

Meanwhile, my brand new S&P 500 setup goes into its third week of being bullish. How can one market say to go long while the other says to go short? How very strange, you say?

It could be that the BKX setup says the coming week will see a short-term decline in a broader overall rally that the SPX setup is trying to capture.

But this is also the kind of weirdness we see all the time in this very peculiar data. It's one of the reasons analysts and traders haven't been able to make heads or tails of the COT data for decades. Seemingly more often than not, the data just doesn't agree with itself.

See my latest signals table for more details on these and other markets I'm following with my COTs Timer strategy. Good luck this week.

SPX Bullish According to New Signal

It's taken a while, I know, but I've finally finished my new round of backtesting for my COTs Timer trading strategy based on the Commitments of Traders reports. My first new trading setup is for the S&P 500. And the signal went bullish last week. It continues in the bullish column this week.

See my latest signals table for details on trader positioning in this and other markets. Other signals taking effect on Monday's open: gold and the 30-year Treasury bond both go to cash.

My new S&P 500 setup is unusual for a couple of reasons. First, unlike all my other setups, it is based on a single group of traders - the commercial hedgers, sometimes known as the "smart money." My other setups use two (and in one case, three) groups of traders to arrive at signals. If all the traders don't agree, those setups remain in cash.

In contrast, my new S&P 500 setup is always either long or short. It turned out that after looking at a few million potential setups, the most statistically robust one was based on the commercial hedgers alone. (My previous SPX setup relied on both the commercial hedgers and the small traders.)

Second, my new S&P 500 setup has no trade delay, meaning the signals based on Friday's COT report get executed on the following week's open of trading. Most of my other setups include at least one component signal with a trade delay of one or more weeks. For example, my previous SPX setup used a three-week trade delay.

But after trading my COTs Timer strategy for nearly five years, I recently discovered that there was a moderate and statistically significant negative correlation between the real-time profits of a setup and how many weeks of trade delay it was based on.

I can't find anything in the data that would explain this. It's actually kind of strange. The fact is setups with longer trade delays are often the most statistically reliable in backtesting. But this is why it's important to take a mechanical trading system out for a spin on the road and see what happens. In my new round of backtesting, I am limiting my setups to those with zero to two weeks of trade delays.

I picked two weeks as my max because of my natural gas trading setup, which has achieved a 106-percent profit since I started trading it in mid-2009 while gas prices exploded and then collapsed in the same period. My gas setup uses signals with one- and two-week trade delays. You can't argue with that kind of success.

Special thanks go to Dave, a highly gifted and very generous reader who developed an amazing app that I used to do my first round of analysis of several million potential setups.

I then use a few Excel spreadsheets I've laboriously developed over the years to re-analyze the best of those, check other setups I come up with through other processes and run tests of robustness, such as Monte Carlo testing and one of my favourite testing procedures, walk-around testing, which compares how the setup performs against "neighbouring" setups with slightly varied parameter values.

See my FAQs page for more details on my backtesting process.

I'll post details on my new setup on my backtesting results table soon and a sample spreadsheet for downloading. Stand by for new setups soon for copper, gold and U.S. financials. Good luck this week.

Cash for SPX, Crude; Copper Bullish

A few signals take effect on Monday's open of trading: cash for my trading setup for the S&P 500 and crude oil and bullish for copper. See more details on trader positioning that caused these signal changes and positioning in other markets on my newly updated latest signals table.

Hope you had a good weekend. I sure did. The waves were big and powerful at Santa Teresa, Costa Rica, and we had lots of fun surfing with friends after the Reef Classic 2012 surf competition. Good luck this week.

All Quiet in COT Land

All quiet from the Commitments of Traders reports. My COTs Timer trading strategy has no signals that take effect on next week's open of trading. Existing signals all remain intact:

- bearish for one more week for the S&P 500
- cash for the BKX U.S. Bank Index, natural gas and copper
- bearish for the 30-year U.S. Treasury bond and crude oil
- bullish for gold and the Nikkei

See more details on the latest trader positioning in these markets on my latest signals table. Hope you fared well this week, and good luck next week.

Banks, Gas in Cash; SPX Rally Done?

Three signals take effect on Monday's open of trading in my COTs Timer trading strategy: cash for the BKX U.S. Bank Index and natural gas, and bearish for my setup for the S&P 500. See my newly updated latest signals table for more details on these markets and the others I follow using the weekly Commitments of Traders reports from the CFTC, God love em. Good luck next week.

Shine on Nikkei

My trading setup for the Nikkei goes bullish on this week's open of trading based on the signals from my COTs Timer trading strategy. See my newly updated latest signals table for more details on this and the other markets I'm trading using the weekly Commitments of Traders data from the U.S. Commodity Futures Trading Commission.

In other markets, my bullish signal for natural gas goes on for one more week, then goes to cash the week of Feb. 27. Also, my setup for the S&P 500 goes bearish on the open the week of Feb. 27. My bullish signals for the BKX U.S. Bank Index and gold remain bullish again this week. Good luck this week.

S&P 500 to Cash

No new trading signals in this weeks COTs Timer update, except for in my S&P 500 trading setup, which goes to cash on this week's open of trading. I've just updated my latest signals table based on Friday's Commitments of Traders report. Good luck this week.

Bearish for SPX and Treasury

Two signals take effect this week based on recent trader positioning as reported in the Commitments of Traders reports: bearish for the S&P 500 and bearish for the 30-year Treasury bond. My other signals remain the same: bullish for my trading setups for the BKX U.S. Bank Index, gold and natural gas and bearish for crude oil and the Nikkei. Copper is in cash.

See my latest signals table for more details on how COT trader positioning has shaped up lately. Good luck this week. Pura vida.

Banks Bullish, Nikkei Bearish, Bond to Cash

Mixed bag of new signals taking effect on Monday's open of trading:

- bullish for the BKX U.S. Bank Index (this based on bullish positioning in the three-month Eurodollar contract)
- bearish for the Nikkei Stock Average
- cash for the 30-year Treasury bond

Meanwhile, my lovely and talented natural gas setup is still bullish, and knock on wood, doing very nicely indeed. Gold is also doing well in bullish mode.

The signals are based on my setups built around the Commitments of Traders reports, those nifty free weekly reports on trillions of dollars of derivatives positioning in nearly 150 markets, issued by the good people at the U.S. Commodity Futures Trading Commission, God love em. See more details on the positioning in these and the other markets I follow on my latest signals table. Good luck this week.

Copper to Cash; Going for Gold and Gas

Three signals take effect on today's open of trading based on my COTs Timer strategy: cash for copper and bullish for gold and natural gas. Sorry about the last-minute update this week. I'm away in Costa Rica! Beautiful place, and very nice people, but oh so very hot! Check my latest signals table for more details on these and my other setups. Good luck this week.

SPX Small Traders Get Excessively Bullish

The wrong-way small traders have gotten excessively bullish in their positioning in S&P 500 futures and options, according to the latest Commitments of Traders report. That's helped push my setup for the S&P 500 into the bearish column with a three-week trade delay, meaning the trade takes effect the open of the week of Feb. 5.

Meanwhile, my BKX Bank Index setup has gone to cash this week.

See the details for these and the other COT data I am following with my COTs Timer system on my newly updated latest signals table.

Sorry about the delayed post this week. I was on the road travelling to beautiful and sunny Costa Rica. What a gorgeous place! Good luck this week.

Banks Bearish, Copper and Bond Bullish

U.S. banks are bearish as of this week's open of trading, according to my trading setup for the BKX U.S. Bank Index based on the Commitments of Traders reports. Copper, on the other hand, goes bullish, as does my setup for the 30-year Treasury bond. Check out the details on my latest signals table. Good luck this week.

New Year Means Cash for Nikkei and Natural Gas

Happy New Year! I've just updated my latest signals table based on Friday's Commitments of Traders data from the U.S. Commodity Futures Trading Commission. Signals taking effect the first week of 2012: Nikkei and natural gas to cash. See the table for more fascinating details about trader positioning in the eight markets I'm following with my COTs Timer trading strategy.

Thanks to readers for following this blog and your feedback over the last year and since I started it in 2007. I've learned more from readers' comments than I could have imagined, and that's helped me improve this trading system immeasurably. I hope 2011 was a good year for you and your loved ones and that 2012 is your best year so far. May all your dreams come true.