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Volatility
Index Broad Markets Russell
2000 [ http://www.buythebottom.com/rut.html
] S&P
500 [ http://www.buythebottom.com/spx.html
] NASDAQ
100 [ http://www.buythebottom.com/ndx.html
] Dow
Jones [ http://www.buythebottom.com/indu.html
] Over the last two weeks there were several new developments in the major indexes in terms of COT data. What I found interesting is that in the Dow Jones, commercials were buyers and larger-traders were sellers. This is a classical bearish COT setup. For the Nasdaq 100, however, both commercials and large-traders were sellers while small-traders were the ones buying (or short-covering). Interestingly enough the small-trader buying does not end there, in the Russell 2000 index commercials were relatively flat over the last two weeks, as large-traders were big sellers…so that only leaves the small-traders to do the buying. This same sort of pattern reappears once more in the S&P 500, as large traders were sellers commercial buying was relatively minor, meaning that small-traders were doing most of the buying in the market. The point that I am getting to is that small-traders are entering the stock market, while commercials remain largely negative for most markets, excluding the Russell 2000. On top of all that, the stock-market has been on a relentless rally for the past 5 and-a-half-months. I am now largely bearish on the stock market, and would not be surprised to see a strong sell-off materialize in the early part of 2007. I am looking for an intermediate-term top but not so sure about it being a longer-term top, just yet. Commodities Crude
Oil [ http://www.buythebottom.com/wtic.html
] In any case, my stance is unchanged: crude oil was setup for a rally in 2006 – which never materialized, and remains setup for a rally in 2007; that is until we see cot data to the contrary. (For example net-commercial position dropping to the -60,000 to -40,000 range) Gold
[ http://www.buythebottom.com/gold.html
] Currencies US
Dollar [ http://www.buythebottom.com/usd.html
] Regards,
Updated weekly COT charts can be found @ www.buythebottom.com Mailing
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INFORMATION © 2007
James West The opinions of FSU contributors do not necessarily reflect those of Financial Sense |
