Bullish Turn for Banks, Gold; NDX to Cash

Three signals take effect on this week's open of trading based on the latest Commitments of Traders data:

- bullish for the BKX U.S. Bank Index and gold
- cash for the Nasdaq-100 index

Very sorry for my late update this week! See my latest signals table for more details on trader positioning as reported in the free weekly COT reports from the CFTC.

Good luck this week.

Traders Shrug Off MH17 Downing, Mideast Fighting

Traders aren't getting overly exercised about the shoot-down of Malaysia Airlines Flight MH17 almost certainly by Kremlin-backed militia, Israel's incursion into Gaza and fighting in Iraq.

The latest Commitments of Traders report issued Friday has resulted in some new signals taking effect on this week's open of trading, but not a huge swing toward uncertainty or bearishness.

New signals:

- bearish for the Nasdaq-100 and gold
- cash for copper (which had previously been bearish)
- bullish for crude oil

The gold bearish signal is more evidence that traders aren't freaking out. Serious market trepidation would likely have pushed traders to be bullish gold.

S&P 500 Traders Bullish

Other signals remain the same, including S&P 500, which is bullish. In fact, S&P 500 commercial traders substantially increasing their net futures and options position this past week as a portion of total open interest.

This stands in contrast to how commercial hedgers reacted when Russia first invaded and annexed Ukraine's Crimea peninsula and started fomenting unrest in eastern Ukraine in February.

The "smart money" commercials seem either used to the "new normal" or not overly concerned about market impacts of amped threats of Western sanctions against Russia -- or both.

See my latest signals table for details on how traders are positioned in the 10 markets I trade using the free weekly COT reports from the U.S. Commodity Futures Trading Commission.

Nasdaq-100 Signal to Cash After Three Months Bullish

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:

- cash for the Nasdaq-100 (which has been bullish three months, since March 17)
- bullish for the 30-year Treasury bond (which means the bond yield would fall)

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. Other signals remain the same as last week.

Good luck this week, and to Quebec readers, Joyeuse St-Jean!

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.

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.

Bullish Equities Move Solidifies in CFTC’s Latest COT Report

The bullish move in trader positioning in equities seems to be solidifying a little, according to the latest Commitments of Traders data.

Signals taking effect on this week's open of trading:

- bullish for the BKX U.S. Bank Index
- bearish for the Nikkei
- bullish for the 30-year Treasury bond

My signal for the S&P 500 went from bearish to bullish last week. Net "smart money" commercial hedger positioning in S&P 500 futures and options remains at extremes of optimism in Friday's COT update.

The Nasdaq-100 was already bullish.

See my latest signals table for trader positioning data in the 10 markets I trade using the free weekly COT reports issued by the U.S. Commodity Futures Trading Commission.

The Nikkei move in the other direction is odd, but no one can say the COT data makes complete sense and doesn't leave you guessing.

Good luck this week.

Seachange in Latest COT Data

Lots of change in the latest Commitments of Traders data.

After a brief lull of indecision that put most of my signals into cash, Friday's COT report from the CFTC has riled up most of my setups and put them back into positions.

You have to see my latest signals table to appreciate the remarkable upheaval.

New signals taking effect on the coming week's open:

- cash for the BKX U.S. Bank Index
- bullish for the Nasdaq-100 and silver
- bearish for natural gas, copper, crude oil and the 30-year Treasury

Bullish On Balance?

On balance, this dramatic trader realignment seems to be a progression of the slightly more positive news I reported in last week's post.

Banks had previously been bearish, while the Nasdaq-100 now becomes bullish. A bearish signal for the bond would also tend to be bullish for equities.

The commodities are a real grab-bag, but you have to discount the bearish natural gas signal. Natural gas isn't correlated at all with equities.

Of those remaining, copper and crude going bearish may be a continuation of the ongoing decline in commodity prices. That may be longer-term bearish for equities, but for the shorter term it's probably not relevant.

Silver is now joining gold in the bullish column, which may be more of a portent for the U.S. dollar than equities. And in fact, a decline in the greenback tends to be bullish for equities.

All in all, it's just a bunch of speculation! And next week's COT data could erase everything I've just said, as so often happens.

Good luck this week.
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