5 replies to this topic

[hedgehawk]

I have been lurking on this board for several months now. This is the most confused I have heard the board on market direction since I became a member. Out of all the reasons I have read that say the market should go up, and all the reasons why the market should go down I heard the best one of all today.

It came from kevins blog. He said in his Friday Blog "As you can see in the above chart the commercials are holding their largest net long position compared to the last 5 years." I recommend you read this blog, titled "Is The Smart Money Long Or Short Stocks?" from July 20th if you have not already.

I hear alot of folks predicting that the market will go up through end of July until first part of August then sell off. I dont think the market will do that, that is to obvious....Isnt it? I am looking for the PPT, Bernanke and Paulson to infuse the system with a cash injection the beginning of August to keep the market up since they must be aware of the timing of these bearish bets. Current M2 chart by Gordon Harms this weekend seems to support this theory as they have been cutting M2 back setting up for a mass infusion the beg of August.

Me, I am gonna keep selling resistance and buying support. Seems to be working right now. Thanks for sharing ur thoughts!

Kevins Blog Url:

http://kevinsmarketblog.blogspot.com/

I have been lurking on this board for several months now. This is the most confused I have heard the board on market direction since I became a member. Out of all the reasons I have read that say the market should go up, and all the reasons why the market should go down I heard the best one of all today.

It came from kevins blog. He said in his Friday Blog "As you can see in the above chart the commercials are holding their largest net long position compared to the last 5 years." I recommend you read this blog, titled "Is The Smart Money Long Or Short Stocks?" from July 20th if you have not already.

I hear alot of folks predicting that the market will go up through end of July until first part of August then sell off. I dont think the market will do that, that is to obvious....Isnt it? I am looking for the PPT, Bernanke and Paulson to infuse the system with a cash injection the beginning of August to keep the market up since they must be aware of the timing of these bearish bets. Current M2 chart by Gordon Harms this weekend seems to support this theory as they have been cutting M2 back setting up for a mass infusion the beg of August.

This will catch all the people who are early playing for the beg of August decline flat footed, and cause a squeeze. Yes I know, that game is getting tired.

Me, I am gonna keep selling resistance and buying support. Seems to be working right now. Thanks for sharing ur thoughts!

Kevins Blog Url:

http://kevinsmarketblog.blogspot.com/

[Iblayz]

And I would remind anyone to simply go to the CFTC site and read the definition of commercial traders.....i.e., what is it that puts them in the category of "commercial".



When an individual reportable trader is identified to the Commission, the trader is classified either as "commercial" or "non-commercial." All of a trader's reported futures positions in a commodity are classified as commercial if the trader uses futures contracts in that particular commodity for hedging as defined in the Commission's regulations (1.3(z)). A trading entity generally gets classified as a "commercial" by filing a statement with the Commission (on CFTC Form 40) that it is commercially "...engaged in business activities hedged by the use of the futures or option markets."



Now it may be true that over time the markets tend to move in the direction of the commercials' net positions. But you will be disappointed, very often for months at a time, if you try to time the markets based on the commercials positions. But since the very definition of the commercials in the COT refers to those who are using the futures and options to hedge......it is, in my opinion, a big mistake to represent their net direction as "smart money". It simply amazes me that so many people to this very day still refer to the commercials positions as straight line directional bets on the market. That is simply not true. Period.

[arbman]

I am looking for the PPT, Bernanke and Paulson to infuse the system with a cash injection the beginning of August to keep the market up since they must be aware of the timing of these bearish bets.

... so you are looking for an USD crash then in a few days?!? If there is something that's impossible for the PPT to do right now is to expand the SOMA aggressively. If there is anything that will make this market rally, it will be because of the growth stocks, not due to anymore propping, imho...

The earnings are disappointing and they just can not pump aggressively due to the USD that is at the borderline of a crash. That's my take, what I can not tell you is whether this nasdaq rally is for real or the spill over speculation from the energy and materials. In any case, the growth must be very inflationary and eventually a deflationary state should follow in the absence of the financial leadership --no credit injection into the system...



From this chart and the recent record new highs, what I could tell is that any coming low looks like a cyclical low for now and probably once the financials settle at some sort of a strong support. The market will manage to rally one more time, but it will be again another large cap rally without the lower rates...

- kisa

[Rogerdodger]

I have been lurking on this board for several months now.

I thought I was being watched.

At least it was another Okie.

[gorydog]

I've given up on following the commercials recently and now only look at the small traders for contrary indicator GD

[hedgehawk]

A contrarian play on the greenback. The dollar is turning into a joke. Why not keep slamming the dollar, who is complaining if the dollar sinks? I dont think it will crash, after they pump the M2 in beg of August, we may get a carefully orchestrated fart out of the old greenback. This just popped up on Bloomberg. LOL Dollar Falls to Lowest in Two Months on U.S. Mortgage Concerns By Ron Harui A U.S. one dollar bill is photographed with yen and euros July 24 (Bloomberg) -- The dollar fell to the lowest in two months against the yen and the weakest versus the British pound in 26 years on concern U.S. subprime mortgage losses will deepen. The U.S. dollar declined against 15 of the 16 most-active currencies on speculation increasing losses in securities backed by subprime mortgages will worsen a housing slowdown and hurt consumption, which accounts for 70 percent of the economy. The dollar also slumped to the weakest since March 1985 against New Zealand's currency and slid for a 13th day versus Australia's. ``Weakness in the credit market may impact other financial markets and this will pressure the dollar,'' said Satoru Ogasawara, foreign exchange analyst and economist at Credit Suisse Group in Tokyo. ``People are also concerned about stagnation in the housing market and the impact on consumers.'' The dollar dropped to 120.48 yen, the weakest since May 16, before trading at 120.68 at 11 a.m. in Tokyo from 121.09 late in New York yesterday. It also fell to $2.0642 versus the pound, the lowest since May 1981. It traded at $1.3820 per euro from $1.3807 and may weaken to $1.40 in two weeks, Ogasawara said. The Fed's major currency trade-weighted dollar index fell to 77.01 on July 20, the lowest since 1971, from 77.15 on July 19. The dollar traded as weak as 80.94 cents, the least since New Zealand's currency was freely traded 22 years ago. Australia's dollar bought 88.44 cents, the most since Feb. 1989. Dollar Minus The U.S. currency also extended this month's slide to 2 percent versus the euro before a National Association of Realtors report tomorrow that may show U.S. existing-home sales dropped last month to the lowest in four years. Federal Reserve Chairman Ben S. Bernanke testified before Congress last week that there will be ``significant'' losses on loans to homeowners with poor credit. ``The subprime problems in the U.S. may deepen,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd. ``It's a minus for the dollar,'' which may decline to $1.3840 today, Ishikawa said. Sales of existing homes probably slid to 5.87 million in June from 5.99 million the previous month, according to the median forecast of 70 economists surveyed by Bloomberg. The Commerce Department will report on July 26 that new home sales fell last month to 890,000, close to the lowest in almost seven years, according to a separate Bloomberg survey. The Fed's benchmark interest rate has been unchanged since policy makers lifted it to 5.25 percent in June 2006, while the European Central Bank has raised its rate five times over the past year to 4 percent. The Bank of England has lifted rates five times since August to 5.75 percent. Federal funds futures showed the likelihood of a decrease in the target rate for overnight lending between banks in December rose to 26 percent from 22 percent a week earlier. Reducing Yen Shorts The yen rose against 15 of the 16 most-active currencies on speculation losses from subprime mortgages will prompt investors to pare riskier assets funded by borrowing cheaply in Japan. The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain -- so-called net shorts -- was 126,773 on July 17, compared with net shorts of 125,890 a week earlier, according to the Washington-based Commodity Futures Trading Commission. The data are sometimes used as a contrary indicator. ``Investors are reducing yen short positions, not only against the dollar but also against yen-crosses,'' said Soichiro Mori, foreign-exchange strategist in Tokyo at Himawari Securities, Inc., a foreign-exchange margin trading company. ``This could be triggered by concern over the U.S. subprime issue.'' Japan's key overnight lending rate of 0.50 percent is the lowest among major economies. The benchmark rate is 11.50 percent in Brazil 8 percent in New Zealand and 6.25 percent in Australia. The yen has weakened the most this year versus Brazil's real. Against the yen, the Brazilian real dropped to 65.6261 from 65.8510 and the Australian dollar fell to 106.71 from 107.01. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net Last Updated: July 23, 2007 22:04 EDT