33 replies to this topic

[danzman]

I did a quick Google of free COT charts. Here
you go:

http://www.timingcharts.com/index.php

D

[humble1]

this is a good discussion and learning subject: when i look at the spoo chart posted in this thread, i see a clear new trend of commercial buying, i.e. short covering, from mid december. that is a very bullish trend. if i am missing something, i am anxious to be corrected. we could very well be in a pattern where commercials buy and the small specs sell all the way to a rally top. can you imagine what would happen if the commercial herd stampedes and goes from short to long?

[U.F.O.]

h1, read this for a general primer. Even though it's a little dated the info seems pertinent. I think what danz is doing here is akin to the "odd-lot theory" we use in equity markets. Small speculators (dumb money) generally being mis-positioned for most market moves.

http://www.zealllc.com/2003/spxcot.htm

U.F.O.

[U.F.O.]

Thx. danz for that timingcharts link. I saved it to favorites. This is the link to the COT chart I posted. Click on "Free COT charts" and you have to sign up to get authorization via your e-mail, but the site is free after that.

danz, do you use futures only or futures and options data?

http://www.commitmen....com/charts.htm

U.F.O.

Edited by U.F.O., 25 January 2009 - 11:41 AM.

[humble1]

will do and thanks. i will also follow this thread as (hopefully) it continues.

[U.F.O.]

Here's some food for thought. The commercials (hedgers) seem to trade against the small specs. Any time the small specs get into a winning position it's "california turnaround" time as the market has a dramatic snapback in the opposite direction. Another interesting thing is the lack of position right now of the large specs. They've gotten out of the way almost completely and, in fact, have gone small short for the 1st time since last June. So here you have the hedgers and large specs against the small guys. That explains a lot of what's happened since 1/5/09 with the seeming collapse and what I posted earlier looking like a "measured move" lower in price. Measured moves are segments of price action on a chart that look too uniform to not be engineered by someone with money. 1/7 through 1/15 has that look. The small specs are making a BIG bet right here that we get a rally out of this last 4 day's consolidation. Danz is saying he doesn't think the big boys will let that happen just yet and they will force the market lower still to shake out some of the small investor bullish longs. Cool $hit. (2 charts)

U.F.O.

[inamosa]

At this stage, the commercials are still bearish although they have reduced their net short position for the last 2 weeks May see a change in position closer to middle of Feb

[humble1]

aly: in hamlet, "the play is the thing" but in trading "the trend is the thing" (tm: jedi master H1, my mentor)

[U.F.O.]

Remember though that futures are a "zero sum" game, unlike stocks. There's never any new supply of futures created whereas companies are constantly doing new equity offerings and buybacks in the stock market. In futures every seller is matched to a buyer. Commercials are just another name for "house money". They, being market makers, have to take positions when no-one else (large specs) want to. Therefore, their positions don't necessarily reflect what they think about market direction. They're not always correctly positioned, but they have the ability to move the market to price points that can take out a lot of the opposition. After all, they hold the order book that shows where all the buy/sell orders and stops are located. They know that if the market rallies hard here they lose a lot of money. Interesting dilemma they find themselves in. The question is can they take it down? You can only fight a trend for so long. If the IT is set for a snapback correction higher they can't hold a cork underwater forever.

U.F.O.

[U.F.O.]

Here's what the commercials are trying to do. I posted the StochRSI chart yesterday showing that the energy being expended down here in this last 4 days of rangebound trading is starting to work off the market's oversold condition. If they can hold this level long enough to exhaust the buying power of the small specs they can, in fact, take the market lower almost without opposition until they hit sell stop levels and then they can be the buyers of importance and cover their shorts at lower levels, positioning themselves longer for a corrective snapback higher. I think the large specs saw this coming and got out of the way, positioning themselves small short against the small specs. (1 chart)

U.F.O.