Banking on Banks

My signal for the BKX U.S. Bank Index, a benchmark for U.S. financials, goes bullish on next week's open of trading.

That's thanks in part to large speculators improving their futures and options positioning in the three-month Eurodollar contract, a closely watched indicator of liquidity in the financial system.

See my latest signals table for more details on the latest trader positioning as reported in the weekly Commitments of Traders reports from the U.S. Commodity Futures Trading Commission.

All my other signals based on this data remain the same. That includes my bearish signal for natural gas, which has been doing nicely again. (Knock on wood!)

But if you're thinking of jumping in on that one now, keep in mind that my signals are backtested to have a certain probability of making money from open to close of the trade. Getting in part way through a signal isn't part of the backtesting.

Have a good weekend, and Happy Canada Day to Canadian readers, eh!

Big Bearish Move in Nikkei Ends Six-Month Signal

Big news for Japan's Nikkei Stock Average in this afternoon's Commitments of Traders report.

Commercial hedgers and small traders in Nikkei futures and options have dramatically reversed their long-time bullish open interest.

Their move suddenly ends my six-month bullish signal for the Nikkei, which has done very well. The signal goes to cash as of next week's open of trading.

See my latest signals table for more details on how trader positioning is shaking out in the Nikkei and other markets I trade using the free weekly COT reports from the U.S. Commodity Futures Trading Commission.

The commercial hedgers made an especially big move, with their Nikkei positioning plummeting from an extraordinary 3.1 standard deviations above average last week to 0.1 standard deviations above.

In other news, my bearish signal for the BKX U.S. Bank Index also ends next week, moving to cash.

Good luck next week, and Joyeuse St-Jean to Quebec readers!

Traders Tilt Bullish During Selloff, CFTC Data Shows

Copper goes from bearish to cash on the coming week's open of trading, while my signal for the Nasdaq-100 goes from bearish to bullish.

That's based on the latest weekly data in the Commitments of Traders reports, which detail trillions of dollars in futures and options positions in 200-plus markets.

I use the free weekly data from the U.S. Commodity Futures Trading Commission to get trading signals in 10 markets. See my latest signals table for more details on current positioning.

Other data shows traders in equities putting on positions that I interpret to be more bullish during the ongoing selloff, as you can see from the data for the Nikkei (which has been on a profitably bullish signal since Dec. 3, 2012) and the S&P 500.

Even the data for the BKX U.S. Bank Index, which is currently on a bearish signal, is looking more bullish lately. My signal for U.S. financials will go to cash or bullish in a week's time.

Good luck in the coming week, and Happy Father's Day for dad readers out there!

Crude Oil From Bullish to Cash

My three-week-old long signal for crude oil comes to an end on the coming week's open of trading.

That's based on the latest trader positioning in crude oil futures and options as revealed by the weekly Commitments of Traders reports from the U.S. Commodity Futures Trading Commission.

I've updated my latest signals table with the latest positioning in crude oil and the other nine markets I'm trading using this free data.

My other signals remain the same:

- bullish for the S&P 500 and the Nikkei
- bearish for the BKX U.S. Bank Index and the Nasdaq-100 index
- bullish on gold and silver
- bearish for copper and natural gas
- bearish on the 30-year Treasury bond

Yes, kind of a mixed bag! But that's the way the COT cookie crumbles much of the time. The data is usually fairly contradictory, which is why most people don't have much of an idea of what to do with it.

Good luck this week!

Banks Could Take a Hit, Trader Data Says

I'm going short U.S. financials on the coming week's open of trading based on the latest Commitments of Traders data.

My signal for the BKX U.S. Bank Index has turned bearish based on the trader positioning in the latest weekly COT report from the U.S. Commodity Futures Trading Commission.

See my latest signals table for more details on the positioning in this and the other markets I'm trading using this great free data, which reveals trillions of dollars of positioning in over 200 markets.

My other signals remain the same for the coming week. Good luck this week!