The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Square_Dealings who wrote (70081)	9/22/2006 7:08:49 AM
From: Lee Lichterman III	Read Replies (1) of 110194

I think it all depends on how you use the data BWDIK. Being 4 day old news is not that big an issue when you consider how large these positions are. The falicy that most that try to use it make the mistake in is taking the single contracts at face value. Yes, the Commercials were short the SPX large contract, they were even short the SPX large and e-mini contracts combined but they were very very long the NDX large and NDX mini combined. This was a bullish development that I posted. The charts on these contracts are here... marketswing.com What made it even more bullish was that when the DOW large and mini was combined with the SPX large and mini, NDX large and Mini, the Russell 2000 Large and mini and the S&P 400 large and mini the commercials were more long than they had been in ages. The saw the rally coming over a month before it began. marketswing.com Even worse was the small specs, you and me were the least long they have been since June of 2000. No small traders had faith in a rally here and the Hedge funds were extremely short thus the squeeze play was set. It was just a matter of when the commercials would squeeze them, not if. I find the COT very useful. It just has to be interpreted by understanding that the big boys don't play straight up. The play one side long, counter with a mini short or another index the opposite way. The ebbs and flows many times are inconclusive but when they lean hard like they were a month or so ago, you know something big is about to happen. Just keep in mind the commercials are akin to driving a huge oil barge. It takes a long time to steer it and turn it around. That is why if you keep this in mind, you will notice the commercials start building longs as the market drops, then are their longest just as the turn starts to occur. They sell those longs in the rise then end up short just as it peaks. The then cover their shorts into the decline. Small specs on the other hand are simply trend followers post Y2K bear conditions. The true specualtors were mostly wiped out and only the nimble survived. They now mostly go with the short term trend. The real battle is with teh Hedge funds and the commercials now. The hedge funds haven't been fairing too well but also hold individual stocks so some of this is simply hedges on those bets. The COT for the Dollar also has been having a good track record. I don't find much use for the commodity ones though since the commercials are often producers simply hedging future delivery. I will add that the COT gave notice of the Y2K selloff and was screaming that it was about to occur. Heinz aka trotsky let everyone know in advance that this was a pretty good indicator and it worked very well then. The commercials had been long for most of the tech bull. A few months before the March 2000 high, they suddenly went from very long to very short. The rest was history. Good Luck, Lee

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next