Saturday 21 July 2007

COT Report - Professionals still Long

Emini Commitment of Traders Image

This week's Commitment of Traders reading is +7.6%

Professionals are net long and their net long positions make up 7.6% of total open interest in all stock index futures. This is unchanged from last week.

There's a lot of uncertainty and negative talk around the markets this week. We have some earnings jitters and evidence that the Fed is not altogether unified in their outlook for the economy. Volatility has increased and day traders are having fun with the large intra-day swings. Two market indicators stand out for me. The first is the consistently bullish COT numbers. The second is the lack of a bearish signal on the ISEE (put/call ratio).

Note: Commitment of Traders data is collected after the close on Tuesday each week and then published after the close on Friday. On the chart below: Light blue dot = Low turning point; Red dot = High turning point.

Emini Commitment of Traders Oscillator Image

This week's Commitment of Traders Oscillator reading is +7

The COT Oscillator rose this week from 0 to +7. Officially we have now entered the sell zone but it may be too early to start looking for short trades. My best guess is that the Emini will make a bottom during the first couple of days of this week and then continue up.

Remember, this is a longer term Emini indicator and designed to highlight broad trends. Click here for a full explanation of this Commitment of Traders analysis.