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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Defrocked who wrote (29377)	4/26/2000 2:36:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

Def, well, i agree with that, but i bet you that the stock gamblers will use an ECI that comes in as expected or 0,1% lower as an excuse to put their party hats on. that's actually the only aspect of the ECI that's important to me. it appears btw. that the COT report on bondland was not exactly bullish. but George Slezak wrote me a little note about that: Press release 7:00 am 4/22/00: The CFTC (a US Government Agency) Report of the "Commitments of Traders" released on 4/21/00 shows the Net Commercials (firms that hedge and deal in the cash markets) have near 5 year record net short positions in Eurodollars and Ten Year Notes. Opposite these positions are the "Large Spec" commodity funds with near 5 year record net long positions. Generally, trading strategies using the Commitments of Traders data is the follow the market direction of the commercial traders when they establish positions that are at levels - one to five year record net positions. In the past months however, the battle between the Commercials and the Large Speculator has more and more been going in favor of the Large Spec Commodity Fund. The Large Speculator in today's markets are the Commodity Funds and their trading strategy is generally trend following or "momentum" following. In the past, when prices attained a level of being overpriced the commercials would generally hedge heavily in the futures markets and the effect would be to turn the trend from overpriced towards better value. In recent months the commodity funds seem to drive the markets right through over priced to very overpriced and on. This is similar to the way the "momentum traders" drove certain sectors of the stock market to PE ratios never seen before the past few years. If the experience of the commodity market is similar to the stock market we may see the trends of the commodity markets pushed along by momentum traders to extremes not seen since the 1970's. As publisher of analysis tables of Commitments of Traders data on www.commitmentsoftraders.com I have received recently requests for information about the large spec positions in the reports from cash market commercial traders from locations all over the world. They are becoming sensitive to the effect on the market by the trend following momentum following large specs. Explosive commodity markets could come if the commercial hedge selling begins to take into account the trend momentum of the markets. An test case of the power of the momentum traders could be the near 5 year record commercial hedging in the Eurodollars and the Ten Year Notes. Both products are generally interest rate sensitive futures contracts (the Eurodollar is a futures contract that flucuates based on the 3 month interest rate for Dollars on deposit in European Banks) and the commercials are hedging in anticipation of the coming Fed meeting. Normally the interest rate products would decline when there is a rate hike by the Fed, but the momentum of the market might drive these markets higher in spite of the pending Fed action. Tabular summaries of the Government report can be found at www. Commitments of Traders .com - George Slezak, Commodity Trading Advisor George Slezak 888-311-3400 will be interesting to see how this plays out...