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To: AllansAlias who wrote (17384)	10/22/2001 12:25:58 AM
From: martin001	Respond to of 209892

INteresting stuff. The biggest problem with analyzing futures contract positions is (as you point out) what part of the outstanding is related to hedging as opposed to speculating. I would imagine that this ratio also changes over time thereby increasing the difficulty in making YOY comparisons. One would be inclined to make the assumption that only during similar trending periods would the ratio of hedging to speculative monies remain the same. Be interested to see what your final data shows. Martin

To: AllansAlias who wrote (17384)	10/22/2001 1:39:12 AM
From: Shack	Respond to of 209892

Outstanding AA! You're out of your mind if you don't charge for this work.-ng Present company excluded of course. I have some thoughts regarding the COTS. I feel that although we are not at a bottom yet, we are within 3 to 5 months of a bottom on the SPX that will quite likely last a very long time, perhaps most of next year. As we approach this turn, I expect the commercials to have unwound their shorts and be net long, or flat. This bottom should occur whether we are in a long-term bear, or a new bull. I'm sure you know my leanings. Consequently, I believe we have long since seen the peak of the commercial short position. I am not sure that they will increase their shorts much as we move through what I believe to be this '4' correction in the S&P. If that count is correct, they will likely begin to work off the entire short position as we move down into the '5', and be long/flat at the bottom which I feel will occur in late winter early spring. Those wrong-way large specs will likely be super net short at that bottom and the small spec may even be short....although I doubt by very much...hard to beat the clown out of them. As for the NDX, I think that it remains in a tail-spin. The 'wrong-ways' are still quite long and the commercials aren't afraid to get shorter. I bet that index gets cut nearly in half from here by the spring. Looking forward to see your work. You want my credit card # now?

To: AllansAlias who wrote (17384)	10/22/2001 4:22:24 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 209892

Allan, Great work. Your analysis makes sense to me. I am not any expert in this area, but I would assume the COMM group got short the futures to cover their potential losses when they decided to start selling their stock assets. I also believe this group knows what is going on internally in the system relative to demand for the paper assets as they know the supply of capital available to continue the increase and/or cause a decrease in demand for the paper. I believe that they know what amount of capital that it takes to keep the market increasing in price and when the capital is exhausted they know the market must correct. I assume this group had the largest inventory of paper at risk. Am I close to guessing what goes on? I do watch some of the grain, corn and soy bean commodities futures since I was born and raised on a farm in North Dakota. They are near and dear to my heart.<g> I also own a few company stocks that should trade closely to these commodities. The same thing seems to happen with these commodity future contracts. The COMM group will be short when they see demand is less than supply. These COMM groups are the people that know what is "really" going on in the system and adjust quickly to cover their potential losses and insure their profits. Joan