<<when they started to then get shorter fading the March-May rally.
They ain't fading this one. Hmmmmm...... >>
Pardon my ignorance on the Commercials, but I'm left with a few questions. . .
First of all, they are still net short the S+P, even if less so. This still implies to me that they expect lower prices ahead, correct? Do they ALWAYS increase their shorts at the top of every meaningful rally? Or is it possible that the fact that they are less short might simply imply that they do not see a new low ahead, even if we do have a dip? Or do we have to see an increase in shorts/decrease in longs before we have a dip? (Clearly, I have no confusion on the "Large" position, which augers a rise, not a dip.)
I would think that if the Commercials were truly bullish here, they'd be closer to net long than they are now. Using just the S+P, we're over 30% off the high, and the bias is still net short. In the shorter term, their action near the bottom was rather strong, but over the past two weeks has shown little change: the recent rise has not caused additional covering, nor has the long position dramatically increased since early October. I suppose we'll know more next Friday, and if we get that ending diagonal this week AND see more shorts from the commercials, that could be a hint.
Again, I probably don't know enough about how to read the COT data, but I'm trying to get up to speed. I hope my questions are on the right track.
signed,
the confused, procrastinating freep |
