Monday, July 13, 2015

Stock Index Commitment of Traders Data Suggests Strong Bullish Run Ahead

I took time this evening to review the recent Commitment of Trader's data compiled for the major US stock indexes.  And there has been a large move of smart money into the long side of futures in the last 2 reporting periods.  As of this past week's reporting period this has actually pushed the smart money "hedgers" to a net long position.  They typically are net short and have not gone net long at too many points in recent years.

The last two period of time where they moved from extended net short to a net long total where at distinctly significant lows.
  • August 16th 2011 - Dec 27th 2011 was mostly net long by commercials
  • July 6th 2010 - Sept 14th 2010 was mostly net long by commercials
Those periods both marked the beginning of a couple months of wide range trading as stocks formed a support level and then launched into major bullish runs.

At this point, with significant negative news on the world front and the smart money loading into US stocks, it seems to me that the big move in coming months will be to the upside in stocks.

So there are several ways to play this, but at this time my suggestion is to take only the long side trades from here in US stocks.


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