Saturday 2 August 2008

Commitment of Taders Crosses Zero Line

Commitment of Traders crosses zero line this week.

Emini Commitment of Traders Image

Commitment of Traders: Professionals +0.7% (long)

The large (SP) contract professionals held net long positions this week. The Commitment of Traders reading was +0.7% of total open interest, up from -0.4% (short) last week.

The red line in the chart above represents the difference between large (SP) contract professionals and mini (ES) contract professionals. The red line continued to rise this week and the gap between the large and mini contract professionals widened. This is bullish for equities.

Emini Commitment of Traders Oscillator Image

Commitment of Traders: Oscillator -82

The Commitment of Traders Oscillator completed it's double bottom pattern this week and rose from -117 to -82. Patterns like this on the Oscillator have been bullish in the past.

This week's action came close to being a Long-Legged Doji candlestick pattern, indicating indecision and lack of strong direction. We're also approaching a Pull Back pattern on the daily Hilbert Sine Wave and could see a down leg this week. However, the Commitment of Traders analysis is bullish and so my best guess is the market will recover from any weakness.

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. Follow this link to a feature article with a full explanation of this Commitment of Traders analysis.