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!