Cash for Gas

Just updated my latest signals table based on today's Commitments of Traders data released by the Commodity Futures Trading Commission. Notable signals for next week's execution: My trading setups for natural gas and the 30-year Treasury bond both go from bullish to cash on Monday's open of trading. (The Treasury signal had already been stopped out on Thursday, as reported in my post earlier today.) I'll be back early next week with a post about the data and signals and an update to my portfolio page. Have a good weekend!

Stopped Out of Bullish Bond Trade

Got stopped out of my bullish 30-year Treasury bond position Thursday as the bond yield bounced up. I usually look for opportunities to put on a discretionary trade in the opposite direction in this kind of situation because it means the market is showing a strong trend against the historic data that could continue for a while.

Getting Gas

Natural gas has been crashing forever, it seems. My trading setup for natural gas goes bullish on Monday's open of trading. But the signal stays bullish just one week, so the carnage may not be over. This and other newly updated signals and data are now up on my latest signals table, based on Friday's Commitments of Traders data. Sorry for the shorter report this time around. Have a good week, and be sure to tune back in early this week for an update to my portfolio page.

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

Crude Times for Crude

Quite a bunch of meltdowns and meltups this week. U.S. banks and bonds got clobbered, while the S&P 500 and gold were flying. Here's how the Commitments of Traders numbers see things (check my latest signals table for more details):

- S&P 500: Third week bearish for my S&P 500 trading setup based on the weekly COT data issued by the Commodity Futures Trading Commission. As you can see on my newly updated latest signals table, the "smart money" commercial hedgers are still uber-bearish. Their net position as a portion of the total open interest is now in its fifth straight week of being one standard deviation below average or lower. The wrong-way small traders are also still fairly bullishly set.

My position is down about three percent (discounting leverage), but hey, that's trading. Could still close out with a gain. And even if not, you can't expect to win 100 percent of the time - or anywhere near that - in this business. See my FAQs page for more on how I feel about losing trades.

- Crude oil: My trading setup for crude goes to bearish on next week's open of trading. With the trade delays involved in the signals, this setup will remain bearish for at least the next four weeks. As Stephen Vita noted today on his excellent Alchemy of Trading site (see free version here), crude has just entered its seasonally weak period between mid-October and mid-December. (As an aside, readers sometimes ask me about the best books to read about trading. I always tell them to check out Stephen's site. I've learned more from him than any other source.)

- Natural gas: When will the misery ever end for this sad-sack market? Now, according to the large specs and small traders. Both groups are piling into gas futures and options. My setup has gone bullish with a one-week trade delay, meaning execution on the open of Oct. 25. Caveat: This doesn't mean the COT data says gas has probably bottomed! The signal could last as little as one week, then be back in cash or, a week after that, even bearish. That's just how gas is. Jumpy!

- U.S. financials: Fifth week in the cash column for this market.

- Gold: Large specs are over-exuberant, and my signal is in cash a second week in a row.

Hope you did well this week and that you have a great weekend. I'm sure looking forward to it. Saturday is Mexican night! Hasta la proxima vez - and be sure to check back in early next week for my portfolio update.

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

-

Gold Gone, S&P 500 Smart Money Slams on Brakes

The "smart money" commercial traders continue their sixth consecutive week of reducing their net position in S&P 500 futures and options, according to today's Commitments of Traders report issued by the Commodity Futures Trading Commission. Their net positioning is now in its third week of being more than two standard deviations below average - an indicator of super-bearishness on their part.

My signal for the S&P 500 went to bearish last week, based on the commercial positioning and the contrarian bullishness of the wrong-way small trader crowd. The signal was wrong last week, but the COT data shows no sign up turning around for either group of traders. The setup will remain bearish for at least the next three weeks.

See my latest signals table for an update based on today's COT data for this and other markets. Some other highlights:

- U.S. financials: Fourth week in cash this week.

- Crude oil: Also in cash, with a bearish signal kicking in on the open the week of Oct. 18.

- Gold: This setup goes to cash on the coming week's open of trading after six weeks bullish. Nice run, but the wrong-way large speculators have gotten excessively bullish.

- Nikkei: A fifth week bearish this week, with a one-week bullish signal to kick in Nov. 15, followed by cash on Nov. 22.

- Natural gas: Both groups of traders have gone bullish, but their trade delays mean the setup remains in cash. We'll see what happens next week.

- 30-year Treasury bond: This setup goes bullish on the coming week's open of trading (meaning it expects the yield to fall).

Thanks for tuning in, and hope you did okay this week. Have a good weekend, and Happy Thanksgiving to Canadian readers! Check back in early next week for a portfolio update.

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

S&P 500 Goes Bearish

Just updated my latest signals table based on Friday's Commitments of Traders data. Coles Notes version: my trading setup for the S&P 500 goes from cash to bearish, crude oil goes from bearish to cash, natural gas goes from bullish to cash, and the 30-year Treasury bond goes from bullish to cash as well. Check the signals table for more details. Sorry for the shortened version this week. Hope you do well this coming week, and be sure to check back in for an update to my portfolio page.

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

"Smart Money" S&P 500 Traders Abandon Ship

It sure does look like we've put most of the worries about a "fall fall" well behind us. The S&P 500 has topped its highs of the summer, while NDX and copper are testing their highs of the year. But some sectors still can't shake off trouble - crude oil and financials among them. What, oh, what do the wise Commitments of Traders numbers foretell, you ask? Friday's data is gloomy indeed. I've just updated my latest signals table based on the latest COT report from the CFTC. Some highlights:

- S&P 500: Still on track to go bearish Oct. 4 and stay that way for three weeks at least. As you can see from my latest signals table, the "smart money" commercials have hit the panic button and are bailing out. They are now more relatively bearish than at any time since early Dec. 2008, which with their customary three-week trade delay was good timing for the early 2009 final leg down of the market crash.

- Crude oil: My trading setup remains bearish one more week, then goes to cash.

- 30-year U.S. Treasury: My setup goes bullish on this Monday's open of trading (not bearish as I had previously indicated!) That means bullish for the bond (i.e. the yield would fall). Another possible sign of market problems as bond yields tend to drop when equities go down.

- Natural gas: One more week bullish, then to cash on Oct. 4.

- Gold: Bullion has had a sweet run to all-new highs, and my setup is still bullish this coming week. The week following is a little in the air. It could go to cash on Oct. 4, but only if the large speculators go absolutely insanely over the top in their bullishness. Based on the COT positioning, the signal will definitely go either to cash or bearish on Oct. 11.

Hope you fare well this week, and be sure to check back in early in the week to see my updated portfolio page.

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

It sure does look like we've put most of the worries about a "fall fall" well behind us. The S&P 500 has topped its highs of the summer, while NDX and copper are testing their highs of the year. But some sectors still can't shake off trouble - crude oil and financials among them. What, oh, what do the wise Commitments of Traders numbers foretell, you ask? Friday's data is gloomy indeed. I've just updated my latest signals table based on the latest COT report from the CFTC. Some highlights:

- S&P 500: Still on track to go bearish Oct. 4 and stay that way for three weeks at least. As you can see from my latest signals table, the "smart money" commercials have hit the panic button and are bailing out. They are now more relatively bearish than at any time since early Dec. 2008, which with their customary three-week trade delay was good timing for the early 2009 final leg down of the market crash.

- Crude oil: My trading setup remains bearish one more week, then goes to cash.

- 30-year U.S. Treasury: My setup goes bullish on this Monday's open of trading (not bearish as I had previously indicated!) That means bullish for the bond (i.e. the yield would fall). Another possible sign of market problems as bond yields tend to drop when equities go down.

- Natural gas: One more week bullish, then to cash on Oct. 4.

- Gold: Bullion has had a sweet run to all-new highs, and my setup is still bullish this coming week. The week following is a little in the air. It could go to cash on Oct. 4, but only if the large speculators go absolutely insanely over the top in their bullishness. Based on the COT positioning, the signal will definitely go either to cash or bearish on Oct. 11.

Hope you fare well this week, and be sure to check back in early in the week to see my updated portfolio page.

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

Cashing Out

Oh-oh. Just when talk of the "fall fall" has quieted down amid this nice little rally, the Commitments of Traders numbers are lining up to signal trouble. My trading setup for the S&P 500 was already going to cash on Monday's open after two and a half months of being bullish. It then goes outright bearish on the open of trading the week of Oct. 4. Also Monday, my bullish signal for the benchmark BKX U.S. Bank Index is ending; that setup also goes to cash.

See my newly updated latest signals table for all the details on these and the other markets I trade based on the COT data issued weekly by the U.S. Commodity Futures Trading Commission. My Nikkei setup went bearish last week. My crude oil setup has been bearish since Aug. 30. The only markets I'm bullish on right now from a COT viewpoint are gold (since Aug. 30) and natural gas (since Aug. 23). Correction to my post last week: My 30-year Treasury setup remains in cash next week and goes to bullish the week following - i.e. on the open of Sept. 27.

Hope you have a good weekend, and please tune back in early next week for an update to my portfolio page.

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

Bank Signal Bullish Next Week... But S&P 500 Smart Money Gets Bearish

Some new signals and interesting data coming out of today's Commitments of Traders report from the CFTC. Check my latest signals table for the details. Some highlights:

- S&P 500: The "smart money" commercial hedgers have followed the wrong-way small traders in giving a bearish signal for my S&P 500 setup. That signal is to take effect on the open the week of Oct. 4.

- BKX U.S. Bank Index: The data for BKX, based on the three-month Eurodollar contract, has flipped to bullish for next week. (The trade is to go into effect on Monday's open.) But it's a short-term trade only, lasting just a single week, as the small trader total open interest went bearish last week. Their signal will kick in with a two-week trade delay the week of Sept. 20. This means my setup will go to cash or bearish that week.

- Nikkei: My setup goes bearish on Monday's open (Sept. 13).

- 30-year Treasury bond: My setup, which was bearish for two weeks, goes to cash on Monday's open. It will then go back to bearish on the open the week of Sept. 27.

- Crude oil: My setup went bearish Aug. 30 and will remain so until Oct. 4, when it goes to cash.

- Gold: My setup went bullish Aug. 30.

- Natural gas: The setup went bullish on Aug. 23 and remains so for at least one more week.

Hope you survived the last week and have a great weekend. Check back in early next week for an update to my portfolio page.

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