ajtj99's Market Pulse

[mjk]

every time this topic comes up, there's always the same misunderstanding...da_chief didn't say anything about the long positions or net...all he said was

"at the oct 02 lows ......the commercials had on their biggest short positions in history"

if you look at the data the commercial SHORT positions (on the spx full contract) did increase during 02 reaching the biggest short position in history on sept 17th 02...as in they were short more contracts than at any time in history, it doesn't mean they were NET short more than any other time. The size of the short position went even higher in dec 02.

Obviously you guys who disagree with him are looking at net commercial positions...I've heard some people say the commercials were net long at the 02 lows which isn't the case, your data and all the data I've seen says they were still net short at the 02 lows.

So the past few days we've heard the comments about commercials being heavy short again and this being a bearish sign, when it's no different than any other lows we've been at...they're net short now as they were in oct 02, mar 03, aug 04, april 05, oct 05...

look at 03...judging from this it looked like the small spec was the smart money...it also shows how quickly the commercials can shift away from being heavy net short...basically this data is pretty useless for market timing

http://www.softwarenorth.net/cot/03/SP.png

it's not just da_chief who sees it this way either...

http://www.investorshub.com/boards/replies.asp?msg=8498518