Buzz & Banter
Scott mentioned the Commitments of Traders information, and how it can tell us if the strong is selling to the weak or vice-versa. I watch this report very closely, and historically it has been quite accurate across a broad section of indices and commodities.
So you have some background if you pull up the info this weekend, the following is a chart of the commercial traders (strong hands) versus the small speculators (weak hands) for the past couple of years for the large S&P 500 futures contract. On the COT report, commercials are labeled "COMMERCIAL" and small speculators are "NONREPORTABLE POSITIONS". The data can be found here for free when you click on "Short Form" next to Chicago Mercantile Exchange. Just scroll down to the section for the S&P 500 Stock Index.
I look for extreme positions from either group, or sudden changes in direction or velocity, or other unusual behavior. As an example, small speculators have added to their net long position for 10 straight weeks - this is an all-time record, and to me is not encouraging.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter