It’s been almost a month since I last posted an article on the Commitment of Traders. But not much has changed really – the rally has continued and the Professionals have added to their Short positions. In fact, they’re reached record levels for this cycle.
Commitment of Traders: Professionals -18.5% (short)
The Professionals increased their net Short positions from -18.1% to -18.5% of total open interest. The SP (large contract) Professionals are still more bearish than the ES (mini contract) Professionals, with the red line in the chart above at -17.8%. Back testing shows the SP Professionals are a more reliable indicator of market direction.
Commitment of Traders: Oscillator +96
The Commitment of Traders Oscillator has peaked and turned down to +96 this week. It’s only a matter of time now – the divergence between the rallying market and shorting Professionals will eventually break. But when?
Hilbert Sine Wave Pull Back Signal Approaching (Emini weekly)
We’re approaching a cyclical turning point on the Hilbert Sine Wave. This will give a Pull Back in a down trend signal once it is confirmed and lead to a testing of the March lows. The next 2 weeks are critical – we need a crossover plus the weekly low to be broken for a confirmed signal.
The release of the bank stress tests on Thursday feels like an FOMC announcement. It could provide the perfect catalyst for a significant turning point but I doubt things will be as straight forward as that. Good luck with your Emini trading this week.
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.