Just a quick update on the weekly Commitment of Traders numbers. I will send out a longer article on Monday’s trading shortly. If you don’t receive it, check the website.
Commitment of Traders: Professionals -16.4% (short)
This week the Professionals reduced their net Short positions to -16.4% of total open interest from a high of -18.5% three weeks ago. This is what we’d expect as the next down leg gets underway.
The SP (large contract) Professionals are still more bearish than the ES (mini contract) Professionals, with the red line in the chart above at -19.1%. Back testing shows the SP Professionals are a more reliable indicator of market direction.
Commitment of Traders: Oscillator +79
The Commitment of Traders Oscillator is now on its way down and reached +79 this week, having peaked at +151 five weeks ago. In previous weeks I’ve warned that "It’s only a matter of time … the divergence between the rallying market and shorting Professionals will eventually break." Looks like the down swing is starting.
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.