Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -7.9%

Professional net short positions now make up 7.9% of total open interest in all stock index futures. Professionals are continuing to offload short positions from the peak reached 4 weeks ago.

This week's Commitment of Traders Oscillator reading is +41

Cyan (light blue) dot = Low turning point; Red dot = High turning point

The oscillator has now turned down and so expect weakness in the Emini market. There also appears to be increasing divergence with the oscillator making lower highs while the market makes higher highs. The oscillator peak reading on 27 October was +89, on 29 December it was +44 and then on 9 February it was +43 (red down arrows on chart). Look at previous turns on the chart to get a feel for how quickly the market follows the oscillator.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -8.2%

Professional net short positions now make up 8.2% of total open interest in all stock index futures. This is a reduction in short positions of 2.6% from the high reading of two weeks ago.

This week's Commitment of Traders Oscillator reading is +40

Cyan (light blue) dot = Low turning point; Red dot = High turning point

The oscillator has now spent the last three weeks above zero and is in the "look for the next down trend" zone. It appears to be leveling out but we'll have to wait another week to see if it turns down.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -10.8%

Professional net short positions now make up 10.8% of total open interest in all stock index futures. This is an increase in short positions of 1.6% from last week. The professionals have not held this large a short position since January 2005.

This week's Commitment of Traders Oscillator reading is +20

Cyan (light blue) dot = Low turning point; Red dot = High turning point

The oscillator has now turned up this week, having spent only one week below zero and in the "buy zone". This rise above the zero line confirms a short term low in the market during the week before last (cyan/light blue dot). We have now re-entered the "look for short trades" zone. Given the large net short position held by professionals, a  more substantial break to the down side looks ever more likely.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -9.2%

Professional net short positions now make up 9.2% of total open interest in all stock index futures. This is an increase in short positions of 0.6% from last week.

This week's Commitment of Traders Oscillator reading is -28

Cyan (light blue) dot = Low turning point; Red dot = High turning point

The oscillator has turned down this week and dropped from +24 to -28. This drop below the zero line allows us to confirm the top of the last upswing at 1,444.25 made during the week of 15 December 2006.

We now have a very unusual situation with the weekly close above last week's high and the oscillator dropping into the "look for long trades" zone. Remember, long signals are triggered after the oscillator has crossed below the dotted zero line and started to turn up.

Historically whenever the close is above last week's close and the oscillator has just fallen below the zero line, a rally follows. Maybe not for long – but it is a bullish sign. I call this pattern a "SnapBack" as I'm expecting the Commitment of Traders Oscillator to quickly snap back above the zero line. Examples of this pattern are shown on the chart below. Text below the weekly Emini bars is bullish; text above the bars is bearish. Based on this analysis, we could see the current rally from 1,412 continue and the market put in a final Elliott wave 5.

Snap text below bar = Bullish; Snap text above bar = Bearish

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -8.6%

Professional net short positions now make up 8.6% of total open interest in all stock index futures. This is a very small decrease in short positions of 0.2% from last week. Data is delayed this week, so ignore the last bar of the COT histogram (it's just the previous week's data repeated in this case).

This week's Commitment of Traders Oscillator reading is +24

The oscillator has turned down this week and dropped from +44 to +24. The data was delayed this week, so ignore the last reading of -39 and cross of the zero line on the chart. However, this does suggest that a top in the Emini was likely made back during the week of 15 December 2006 at 1,444.25. We'll have to wait until the end of the week and see for sure. Remember, long signals are triggered after the oscillator has crossed below the dotted zero line and turned up.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -8.8%

Professional net short positions now make up 8.8% of total open interest in all stock index futures. This is a decrease in short positions of 0.9% from last week.

This week's Commitment of Traders Oscillator reading is +44

The oscillator continues to turn up but this does not signal to go long. Long signals are only triggered after the oscillator has crossed below the dotted zero line and turned up. Typically when this happens it's part of a divergence pattern. The Emini may try to retest the December high while the oscillator remains weak, setting up a short signal divergence pattern.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -7.8%

Professionals unwinding short positions with net short positions making up 7.8% of total open interest in all stock index futures. This is down 2.2% from extreme net short position 4 weeks ago of 9.95%.

This week's Commitment of Traders Oscillator reading is +36

The oscillator continues to turn down from the high of early October, when there was an extreme divergence between rising Emini prices and increasing short positions taken by professionals. Surprising that the Emini has not broken the rising trend line and turned down by now.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Here are the latest Commitment of Traders charts for Emini traders:

This week's Commitment of Traders reading is -8.7%

Professionals remain bearish with net short positions making up 8.7% of total open interest in all stock index futures. However, this is less than their extreme net short position of 9.95% from 3 weeks ago.

This week's Commitment of Traders Oscillator reading is +52

The oscillator continues to turn down from the high of early October, when there was an extreme divergence between rising Emini prices and increasing short positions taken by professionals. Emini traders should look for opportunities to sell short when this oscillator is in overbought territory.

Footnote: Back from a week off to find I have been banned from the excellent EliteTrader forum for my last post which contained links to this Commitment of Traders analysis. Apologies to EliteTrader for violating their forum policies – just trying to help my fellow traders. I hope they let me back in soon!

Stop Press: Joe at EliteTrader has let me back in! Hooray and thank you Joe.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Professionals continue to short. The Emini closed down 0.25 points at 1,404.75 on Friday. Commitment of Traders at highest percentage short since the beginning of the year. See the chart below.

The Emini opened down 5 points at 1,400.00 and quickly made a low at 1,398.00.  The market then trended slowly higher all day, reached a high of 1,405.25 and closed on the highs at 1,404.75. Range and volume for the day was below average at 7.25 points and 0.9 million contracts traded.

Commitment of Traders

The chart above is a weekly chart of the Emini with my adjusted Commitment of Traders indicator shown as a histogram. This weeks reading was -9.95% down 3.7% from last week's reading. This is the largest percentage short since the beginning of the year. Remember this indicator includes all equity indices (Dow, NASDAQ, S&P500, etc.) and is adjusted to show percentage of open interest.

Couple of other things:

• Trend oscillators are now neutral
• Trading Index (TRIN) was very weak at only 3 (on a scale of -100 to 100)
• Bearish divergence with NASDAQ futures down and Dow futures up
• Larry Williams Oops pattern today

Good Emini trading tomorrow.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.

Jump in the Commitment of Traders this week. The Emini closed up 0.75 points at 1,375.00 on Friday. As the market slowly grinds higher the Commercials are increasing their short positions. Do you check the Commitment of Traders data each week?

TGIF and what are the Commercials up to?

The Emini opened virtually unchanged and then dropped to 1,369.75. It then spent the rest of the day slowly grinding higher, hitting a high of 1,375.50 and eventually closing at 1,375.00. At 5.75 points the range was again very narrow today.

I always look forward to close of business Friday. Not just because it's the start of the weekend but I can also see what the Commercials have been up to during the week. The CFTC (Commodity Futures Trading Commission) releases the weekly Commitment of Traders report, which includes data up to the previous Tuesday.

The Commitment of Traders report breaks down open interest into long and short positions, and small, medium and large traders for all traded futures. The people to watch are the large, professional traders or Commercials. The data requires some manipulation but the nice folks at the Commission provide a spreadsheet with all the raw data.

As you know, if you've read any of my previous posts, the raw data is never good enough for me! I need to do several manipulations in order to turn it a useful Emini indicator. This is what I do:

1. Collect the Commercial data for both the full-size and mini contracts
2. Include data for the S&P 500, S&P 400, Dow, NASDAQ 100 and Russell 2000
3. Calculate the dollar value of long, short and total open interest
4. Calculate the net long percentage of total open interest.

The end result for the Emini is shown on the weekly chart above. I know this sounds like a lot of trouble to go to but you'll find it's worth it. Using all 10 index futures smoothes out the data stream and shows turning points early. In addition, weighting by the dollar value gives a more accurate picture of total funds invested.

Professionals shorting the Emini

As you can see the data jumped down this week with the professionals increasing their net short positions from -4.5% to -6.3%. This is a jump down of 1.8% of open interest. These swings of open interest are important to watch but I also look out for large jumps either up or down like this.

Other points of interest on Friday:

• On a weekly chart we have a Doji candlestick pattern
• Relatively small weekly range of only 16 points
• On a daily chart we have a bullish, long legged Doji candlestick pattern
• Bounced off a rising trend line today
• And my Trading Index (TRIN) oscillator turned up.

A mixed bag still

Once again a mixed bag of signals, some bullish some bearish. However, range and volume are declining and the bulls are finding it harder to push the market higher and professionals are adding to their short positions. We will need a decisive trend line break to signal exhaustion or a market turn.

Remember, the Commitment of Traders data is collected weekly after the close on Tuesday and the Commitment of Traders Report is published after the close on Friday.