Saturday 27 July 2013

Bearish Turn for Nasdaq-100

As equity markets enjoy a powerful rally, trader positioning is looking more bearish, according to the latest Commitments of Traders data.

Friday's COT report, which shows how large trading institutions are positioned in 200-plus markets, put my signal for the Nasdaq-100 index into the bearish column.

The signal takes effect on next week's open of trading.

It's based on the "smart money" commercial hedgers getting more bearish, while the wrong-way large speculators, whom I fade, got more bullish.

See my latest signals table for more details on how traders are positioned in this and the other nine markets I trade using the free weekly COT reports issued by the U.S. Commodity Futures Trading Commission.

Commercial traders in S&P 500 futures and options have also gotten strongly more bearish in the latest data, but not quite enough to end my bullish signal, which has been in effect since mid-March.

My Nikkei signal has been bearish since July 8.

My signal for natural gas, which has been short since May 20, remains bearish, and the data shows no signs of reversal (though that can of course change from week to week).

Good luck this week!

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