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Saturday, May 08, 2021 10:01:22 AM
CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 8, 2021
• Following futures positions of non-commercials are as of May 4, 2021.
E-mini S&P 500: Currently net short 33.8k, up 36.1k.
The day Yellen spoke (see above), the S&P 500 dropped 0.7 percent and was down 1.5 percent at the session lows. Bulls soon regained their footing. On Thursday, the large cap index (4232.6) rallied 0.8 percent and added another 0.7 percent on Friday to a new high – past the prior all-time high of 4218.78 set on April 29.
Flows were in cooperation. In the week to Wednesday, US-based equity funds attracted $4.8 billion. In the last 13, flows have been positive in 12, for cumulative inflows of $109.3 billion (courtesy of Lipper). In the week to Wednesday, SPY (SPDR S&P 500 ETF), VOO (Vanguard S&P 500 ETF) and IVV (iShares Core S&P 500 ETF) also took in $5.2 billion (courtesy of ETF.com).
Amidst this, the behavior of the weekly is worth mentioning. This week formed a hanging man. This follows a gravestone doji last week and a dragonfly doji the week before. These are candles that can potentially turn bearish but need confirmation.
Nasdaq 100 index (mini): Currently net short 16.8k, up 9k.
Yellen’s comments did not sit well with tech investors. On Tuesday, the Nasdaq 100 was down 1.8 percent and was down as much as 2.9 percent at the session lows.
The prevailing perception is that a rising rate environment is not good for tech stocks (more on this here). The Nasdaq 100 did post a new intraday high of 14073.48 on April 29, but the tech-heavy index has not made much headway since February 16 when it top-ticked 13879.77. In the subsequent selling, it lost a rising trend line from the low of March last year; the underside of that trend line is resisting rally attempts.
On Tuesday, the index (13719.63) suffered a mini breakdown of sorts, gapping down, although bulls stepped up to defend a confluence of support. Tuesday’s intraday low of 13396.11 defended four-month horizontal support and two-month rising trend line. Plus, the 50-day moving average lies at 13365.48. On Thursday, that low was defended again.
Bulls may have something to work with here. On Friday, they filled Tuesday’s gap at 13800 but at the same time were unable to hang on to the gains, finishing with a long-legged doji.
Russell 2000 mini-index: Currently net short 23.1k, up 2.9k.
The right shoulder of a potential head-and-shoulders formation took more concrete shape this week. It is a potentially bearish pattern and will complete once the Russell 2000 (2271.63) breaks the neckline at 2070s-2080s.
Having rallied 144 percent from the low of March last year through the March 15 record high of 2360.17 this year, the small cap index has lost its mojo. It already lost an ascending channel from last October-November.
Before 2070s-2080s is tested, a rising trend line from late last year will be tested at 2170s. On Thursday, the index did drop to 2205.59, before rallying 1.4 percent on Friday to finish right under horizontal resistance at 2280s.
US Dollar Index: Currently net long 2.1k, down 691.
Last week, dollar bulls defended a rising trend line from January 6 when the US dollar index (90.22) bottomed at 89.17. Support at 88-89 goes back at least 17 years. This week, not only did they fail to build on that but also ended up losing it.
On Wednesday, the index rallied as high as 91.44, and that was it. Support just north of 92 was not even tested. On the daily, several indicators turned back down from the median mid-week.
The aforementioned support at 88-89 is in play again.
Ahead of this, non-commercials reduced their net longs to a 24-week low.
VIX: Currently net short 96.7k, up 2.7k.
Despite last week’s constructive action in which VIX completed a potentially bullish 10- and 20-day crossover, volatility bulls came up short at important resistance.
Intraday Tuesday, VIX (16.69) rallied to tick 21.85 but only to leave behind a long upper shadow by close. On Thursday, a gravestone doji formed.
There is support at 15-16. On April 14, the volatility index dropped to 15.38 intraday before rallying back to close positive. A loss of this level exposes VIX to the low teens.
Read Full Story »»»
DiscoverGold
By: Hedgopia | May 8, 2021
• Following futures positions of non-commercials are as of May 4, 2021.
E-mini S&P 500: Currently net short 33.8k, up 36.1k.
The day Yellen spoke (see above), the S&P 500 dropped 0.7 percent and was down 1.5 percent at the session lows. Bulls soon regained their footing. On Thursday, the large cap index (4232.6) rallied 0.8 percent and added another 0.7 percent on Friday to a new high – past the prior all-time high of 4218.78 set on April 29.
Flows were in cooperation. In the week to Wednesday, US-based equity funds attracted $4.8 billion. In the last 13, flows have been positive in 12, for cumulative inflows of $109.3 billion (courtesy of Lipper). In the week to Wednesday, SPY (SPDR S&P 500 ETF), VOO (Vanguard S&P 500 ETF) and IVV (iShares Core S&P 500 ETF) also took in $5.2 billion (courtesy of ETF.com).
Amidst this, the behavior of the weekly is worth mentioning. This week formed a hanging man. This follows a gravestone doji last week and a dragonfly doji the week before. These are candles that can potentially turn bearish but need confirmation.
Nasdaq 100 index (mini): Currently net short 16.8k, up 9k.
Yellen’s comments did not sit well with tech investors. On Tuesday, the Nasdaq 100 was down 1.8 percent and was down as much as 2.9 percent at the session lows.
The prevailing perception is that a rising rate environment is not good for tech stocks (more on this here). The Nasdaq 100 did post a new intraday high of 14073.48 on April 29, but the tech-heavy index has not made much headway since February 16 when it top-ticked 13879.77. In the subsequent selling, it lost a rising trend line from the low of March last year; the underside of that trend line is resisting rally attempts.
On Tuesday, the index (13719.63) suffered a mini breakdown of sorts, gapping down, although bulls stepped up to defend a confluence of support. Tuesday’s intraday low of 13396.11 defended four-month horizontal support and two-month rising trend line. Plus, the 50-day moving average lies at 13365.48. On Thursday, that low was defended again.
Bulls may have something to work with here. On Friday, they filled Tuesday’s gap at 13800 but at the same time were unable to hang on to the gains, finishing with a long-legged doji.
Russell 2000 mini-index: Currently net short 23.1k, up 2.9k.
The right shoulder of a potential head-and-shoulders formation took more concrete shape this week. It is a potentially bearish pattern and will complete once the Russell 2000 (2271.63) breaks the neckline at 2070s-2080s.
Having rallied 144 percent from the low of March last year through the March 15 record high of 2360.17 this year, the small cap index has lost its mojo. It already lost an ascending channel from last October-November.
Before 2070s-2080s is tested, a rising trend line from late last year will be tested at 2170s. On Thursday, the index did drop to 2205.59, before rallying 1.4 percent on Friday to finish right under horizontal resistance at 2280s.
US Dollar Index: Currently net long 2.1k, down 691.
Last week, dollar bulls defended a rising trend line from January 6 when the US dollar index (90.22) bottomed at 89.17. Support at 88-89 goes back at least 17 years. This week, not only did they fail to build on that but also ended up losing it.
On Wednesday, the index rallied as high as 91.44, and that was it. Support just north of 92 was not even tested. On the daily, several indicators turned back down from the median mid-week.
The aforementioned support at 88-89 is in play again.
Ahead of this, non-commercials reduced their net longs to a 24-week low.
VIX: Currently net short 96.7k, up 2.7k.
Despite last week’s constructive action in which VIX completed a potentially bullish 10- and 20-day crossover, volatility bulls came up short at important resistance.
Intraday Tuesday, VIX (16.69) rallied to tick 21.85 but only to leave behind a long upper shadow by close. On Thursday, a gravestone doji formed.
There is support at 15-16. On April 14, the volatility index dropped to 15.38 intraday before rallying back to close positive. A loss of this level exposes VIX to the low teens.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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