"Smart money" commercial hedgers have thrown in the towel on the S&P 500 rally since the New Year, according to Friday's Commitments of Traders report from the U.S. Commodity Futures Trading Commission.
The commercial net futures and options position as a portion of the total open interest dropped to 1.34 standard deviations below my moving average based on the latest COT data.
That was enough to change my S&P 500 signal from bullish, which it's been since Feb. 10, to bearish. The signal will take effect in two weeks' time on the open of trading the week of April 14.
Gold to Cash
As noted last week, S&P 500 commercial trader positioning had climbed 10 straight weeks starting in December, but started to reverse immediately after Russia's invasion of Ukraine's Crimea.
See my latest signals table for more details on how traders are positioned in the 10 markets I trade using the free weekly COT data.
In other COT data, gold goes to cash on the coming week's open of trading.
Good luck next week.
Saturday, 29 March 2014
Wednesday, 26 March 2014
Got On the Twitter
Just started a separate Twitter feed for COTs Timer.
Be sure to sign up!
Sunday, 23 March 2014
Russia Gloom Stalks Market
Last week's bullish trader positioning -- seemingly on optimism over the West's mild sanctions against Russia -- has given way to oodles of gloom in the latest Commitments of Traders report.
Most startling is the collapse in "smart money" commercial hedger positioning in Nikkei futures and options.
From last week's astonishing 3.87 standard deviations above the moving average, Friday's COT report saw commercial total open interest cleavered to 2.22 standard deviations below the average.
I don't think I've ever seen such a massive reversal in the history of the data. My Nikkei signal remains in cash.
See my latest signals table for more details on the positioning in this and the other nine markets I trade using the weekly COT data.
Banks, Gas Bearish
A similar, though less drastic move took place in the 3-month Eurodollar, a key international liquidity measure.
The Eurodollar gives me signals for the BKX U.S. Bank Index.
My bullish BKX signal last week goes to cash on this week's open of trading due to a sharp decline in the large speculator net futures and options position as a percentage of total open interest.
It's also worth noting what's going on in S&P 500 futures and options. Here, commercial hedgers for the second straight week are reversing their net position as a percentage of the total open interest.
While my signal is still bullish for now, the two-week decline has put an end to 10 straight weeks of increasingly bullish net positioning that started in December.
Reversal Started After Russian Invasion
Notably, the decline in S&P 500 positioning started the Tuesday after Russia invaded Ukraine's Crimea peninsula and organized a widely condemned, fraud-riddled referendum there in an attempt to annex the strategic region.
Meanwhile, gold goes bullish on this week's open -- another sign of market fear.
My signal for silver remains bearish, and the two precious metals rarely diverge.
The explanation could be that traders see value in gold purely as a safe haven, while silver is being seen from the more conventional prism of commodity-positive growth, which traders are now nervous about.
Also noteworthy: Natural gas goes bearish on this week's open.
Good luck this week.
Most startling is the collapse in "smart money" commercial hedger positioning in Nikkei futures and options.
From last week's astonishing 3.87 standard deviations above the moving average, Friday's COT report saw commercial total open interest cleavered to 2.22 standard deviations below the average.
I don't think I've ever seen such a massive reversal in the history of the data. My Nikkei signal remains in cash.
See my latest signals table for more details on the positioning in this and the other nine markets I trade using the weekly COT data.
Banks, Gas Bearish
A similar, though less drastic move took place in the 3-month Eurodollar, a key international liquidity measure.
The Eurodollar gives me signals for the BKX U.S. Bank Index.
My bullish BKX signal last week goes to cash on this week's open of trading due to a sharp decline in the large speculator net futures and options position as a percentage of total open interest.
It's also worth noting what's going on in S&P 500 futures and options. Here, commercial hedgers for the second straight week are reversing their net position as a percentage of the total open interest.
While my signal is still bullish for now, the two-week decline has put an end to 10 straight weeks of increasingly bullish net positioning that started in December.
Reversal Started After Russian Invasion
Notably, the decline in S&P 500 positioning started the Tuesday after Russia invaded Ukraine's Crimea peninsula and organized a widely condemned, fraud-riddled referendum there in an attempt to annex the strategic region.
Meanwhile, gold goes bullish on this week's open -- another sign of market fear.
My signal for silver remains bearish, and the two precious metals rarely diverge.
The explanation could be that traders see value in gold purely as a safe haven, while silver is being seen from the more conventional prism of commodity-positive growth, which traders are now nervous about.
Also noteworthy: Natural gas goes bearish on this week's open.
Good luck this week.
Saturday, 15 March 2014
Bullish Traders Hopeful on Crimea -- Or in for Surprise?
The bullish move in trader positioning in the S&P 500 futures and options is now being confirmed in other equity markets, according to Friday's Commitments of Traders report.
The free weekly data from the U.S. Commodity Futures Trading Commission has pushed my signals for the BKX U.S. Bank Index and the Nasdaq-100 to bullish for the coming week of trading.
As well, my signal for the Nikkei, which had been bearish, has now gone to cash for this week's open of trading.
The commercial hedgers and small traders, both of whom I follow for my Nikkei signal, are now at astonishing levels of bullish positioning, as you can see on my latest signals table.
(Meanwhile, in commodities, my gold signal, long bullish, also moves to cash on the coming week's open.)
Market Hopes for Resolution in Crimea?
What does the bullish equities move mean? Perhaps the market doesn't believe Russia's Vladimir Putin will mount a feared full-scale invasion of Ukraine after Sunday's fraud-riddled referendum in Crimea.
Or perhaps the trader positioning last Tuesday -- which the current COT report reflects -- was based on market hopes of a resolution to the Crimea crisis, which have since failed to materialize.
If it's the latter case and Russian military incursions into Ukraine continue, the next COT report could promise a sharp reversal of bullish equity positioning.
The free weekly data from the U.S. Commodity Futures Trading Commission has pushed my signals for the BKX U.S. Bank Index and the Nasdaq-100 to bullish for the coming week of trading.
As well, my signal for the Nikkei, which had been bearish, has now gone to cash for this week's open of trading.
The commercial hedgers and small traders, both of whom I follow for my Nikkei signal, are now at astonishing levels of bullish positioning, as you can see on my latest signals table.
(Meanwhile, in commodities, my gold signal, long bullish, also moves to cash on the coming week's open.)
Market Hopes for Resolution in Crimea?
What does the bullish equities move mean? Perhaps the market doesn't believe Russia's Vladimir Putin will mount a feared full-scale invasion of Ukraine after Sunday's fraud-riddled referendum in Crimea.
Or perhaps the trader positioning last Tuesday -- which the current COT report reflects -- was based on market hopes of a resolution to the Crimea crisis, which have since failed to materialize.
If it's the latter case and Russian military incursions into Ukraine continue, the next COT report could promise a sharp reversal of bullish equity positioning.
Monday, 10 March 2014
BKX to Cash, Silver Bearish
Two signals take effect on this week's open of trading based on the latest Commitments of Traders report:
- cash for the BKX U.S. Bank Index
- bearish for silver
See my latest signals table for details on trader positioning in these and the other eight markets I trade using the free weekly COT reports from the U.S. Commodity Futures Trading Commission.
Good luck this week!
- cash for the BKX U.S. Bank Index
- bearish for silver
See my latest signals table for details on trader positioning in these and the other eight markets I trade using the free weekly COT reports from the U.S. Commodity Futures Trading Commission.
Good luck this week!
Sunday, 9 March 2014
Update Delay
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I'm currently on the road in beautiful Costa Rica, but will be back at our temporary home away from home in Samara tomorrow and ready for my next post.
Sorry for the delay.
Meanwhile, I've been closely following the situation in Ukraine and saw the picture to the right, which I wanted to share.
Sunday, 2 March 2014
Natural Gas to Cash, NDX Bearish
Two signals take effect on the coming week's open of trading based on the latest Commitments of Traders data from the U.S. Commodity Futures Trading Commission:
- bearish for the Nasdaq-100 index
- cash for natural gas
See my latest signals table for detailed data on trader positioning in these and the other eight markets I trade using the CFTC`s free weekly COT reports.
Good luck this week.
- bearish for the Nasdaq-100 index
- cash for natural gas
See my latest signals table for detailed data on trader positioning in these and the other eight markets I trade using the CFTC`s free weekly COT reports.
Good luck this week.
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