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Saturday, May 27, 2023 9:43:17 AM
CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | May 27, 2023
• Following futures positions of non-commercials are as of May 23, 2023.
E-mini S&P 500: Currently net short 404.3k, up 15.6k.
Non-commercials are ever closer to accumulating most net shorts ever. This week, they were sitting on 404,292 contracts, which is only second to the 408,653 net shorts they had in the week to September 11, 2007.
The S&P 500 back then peaked at 1576 in October 2007 and by March 2009 had tumbled to 667. Mid-to long-term, the index in all probability is headed a lot lower. Fund flows and margin debt in particular refuse to jump on the bullish bandwagon (more on this here). If non-commercials stay put with their holdings, they stand to do all. But the problem near-term is rising risk of a squeeze.
This week, through Wednesday’s low of 4104, the large cap index was down 2.1 percent for the week; by the end of the week, it finished up 0.3 percent to 4205, forming a weekly candle that only time will tell if it is a hanging man (bearish) or a hammer (bullish).
As things stand, if the bulls succeed in decisively pushing through 4200, a squeeze is looking probable – duration and magnitude notwithstanding.
Nasdaq 100 index (mini): Currently net long 14.5k, down 5.5k.
The Nasdaq 100 was held down at 13100s for four weeks before it poked its head out five weeks ago. The tech-heavy index has not looked back since – particularly this week when it added 3.6 percent and last week when it rallied 3.5 percent.
Semis shot up the last two weeks, with SMH (VanEck Vectors Semiconductor ETF) rallying 10.6 percent this week alone on the back of Nvidia’s (NVDA) earnings results. Of note, SMH short interest surged 95.4 percent period-over-period mid-May (chart here); odds favor these shorts got squeezed.
The way tech is rallying, there will come a time when sentiment will have shifted too bullish and there is nothing to push it higher. It is too soon to say if the trade is overcrowded. The next level to watch is 14500s, with the Nasdaq 100 closing at 14298 this week.
Russell 2000 mini-index: Currently net short 48.9k, down 15.1k.
While tech shines, small-caps are losing luster.
Once again, the Russell 2000 was denied at 1800, which represents the mid-point of a range between 1900 and 1700 intact since January last year. For two and a half months now, the small cap index has struggled at 1800.
This week, the index traded north of 1800 intraday Monday through Wednesday but only to close below in all three sessions. The range has clearly narrowed between 1800 and 1700. At some point, a test of 1700 is more likely than reaching 1900.
US Dollar Index: Currently net long 11.2k, up 1.7k.
The US dollar index rallied one percent this week but is yet to decisively break out of 103-104. Closing at 104.14, it has now rallied for three weeks in a row. The latest rally preceded four weeks of sideways action at 100-101, wherein lies eight-year horizontal support.
Support-turned resistance at 103-104 was lost mid-March. The next level of resistance lies at 105-106.
VIX: Currently net short 64.6k, up 10.2k.
Volatility bulls are not in a mood to lose a rising trendline from November 2017 when VIX reached an all-time low of 8.56.
This week, both the volatility index and the S&P 500 rallied; they normally go the opposite ways. Last week, VIX just about closed right on the trendline; this week’s 1.14-point rise puts the index comfortably past the trendline.
That said, volatility bulls did fail to cling on to all of the weekly gains, with VIX ticking 20.81 intraday Wednesday and closing the week out at 17.95.
There is decent resistance just north of 18.
Read Full Story »»»
DiscoverGold
By: Hedgopia | May 27, 2023
• Following futures positions of non-commercials are as of May 23, 2023.
E-mini S&P 500: Currently net short 404.3k, up 15.6k.
Non-commercials are ever closer to accumulating most net shorts ever. This week, they were sitting on 404,292 contracts, which is only second to the 408,653 net shorts they had in the week to September 11, 2007.
The S&P 500 back then peaked at 1576 in October 2007 and by March 2009 had tumbled to 667. Mid-to long-term, the index in all probability is headed a lot lower. Fund flows and margin debt in particular refuse to jump on the bullish bandwagon (more on this here). If non-commercials stay put with their holdings, they stand to do all. But the problem near-term is rising risk of a squeeze.
This week, through Wednesday’s low of 4104, the large cap index was down 2.1 percent for the week; by the end of the week, it finished up 0.3 percent to 4205, forming a weekly candle that only time will tell if it is a hanging man (bearish) or a hammer (bullish).
As things stand, if the bulls succeed in decisively pushing through 4200, a squeeze is looking probable – duration and magnitude notwithstanding.
Nasdaq 100 index (mini): Currently net long 14.5k, down 5.5k.
The Nasdaq 100 was held down at 13100s for four weeks before it poked its head out five weeks ago. The tech-heavy index has not looked back since – particularly this week when it added 3.6 percent and last week when it rallied 3.5 percent.
Semis shot up the last two weeks, with SMH (VanEck Vectors Semiconductor ETF) rallying 10.6 percent this week alone on the back of Nvidia’s (NVDA) earnings results. Of note, SMH short interest surged 95.4 percent period-over-period mid-May (chart here); odds favor these shorts got squeezed.
The way tech is rallying, there will come a time when sentiment will have shifted too bullish and there is nothing to push it higher. It is too soon to say if the trade is overcrowded. The next level to watch is 14500s, with the Nasdaq 100 closing at 14298 this week.
Russell 2000 mini-index: Currently net short 48.9k, down 15.1k.
While tech shines, small-caps are losing luster.
Once again, the Russell 2000 was denied at 1800, which represents the mid-point of a range between 1900 and 1700 intact since January last year. For two and a half months now, the small cap index has struggled at 1800.
This week, the index traded north of 1800 intraday Monday through Wednesday but only to close below in all three sessions. The range has clearly narrowed between 1800 and 1700. At some point, a test of 1700 is more likely than reaching 1900.
US Dollar Index: Currently net long 11.2k, up 1.7k.
The US dollar index rallied one percent this week but is yet to decisively break out of 103-104. Closing at 104.14, it has now rallied for three weeks in a row. The latest rally preceded four weeks of sideways action at 100-101, wherein lies eight-year horizontal support.
Support-turned resistance at 103-104 was lost mid-March. The next level of resistance lies at 105-106.
VIX: Currently net short 64.6k, up 10.2k.
Volatility bulls are not in a mood to lose a rising trendline from November 2017 when VIX reached an all-time low of 8.56.
This week, both the volatility index and the S&P 500 rallied; they normally go the opposite ways. Last week, VIX just about closed right on the trendline; this week’s 1.14-point rise puts the index comfortably past the trendline.
That said, volatility bulls did fail to cling on to all of the weekly gains, with VIX ticking 20.81 intraday Wednesday and closing the week out at 17.95.
There is decent resistance just north of 18.
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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