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Sunday, February 11, 2024 9:53:26 AM
CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | February 10, 2024
• Following futures positions of non-commercials are as of February 6, 2024.
E-mini S&P 500: Currently net short 233k, up 7k.
We are seven trading sessions into February, and the S&P 500 is already up 3.7 percent for the month. This follows an up 1.6 percent in January. The January barometer, which posits that ‘as goes January, so goes the year,’ bodes well this year. The maxim does have a strong record, including last year (more on this here).
That said, it also does not hurt keeping in mind the fact that the large cap index has had a phenomenal time since bottoming late October last year. From that low, it is already up 22.6 percent. It has now rallied in 14 of the last 15 weeks, with the last five in a row.
One after another metric is crying ‘overbought’. In fairness, it has been this way for a while now. Just because things are overbought does not mean a reversal has to occur right away. The weekly RSI, for instance, ended this week at 74.74; the last time this indicator was at least as extended was in December 2019-January 2020. Back then, the index peaked February 19th at 3394 and proceeded to tumble 35 percent in the next five weeks. The Covid-19 was the catalyst for the selloff back then. Yes, equities are grossly extended, but unless a catalyst for a selloff emerges, it is the bulls’ ball to lose.
Nasdaq (mini): Currently net long 32.9k, down 6.4k.
What looked like a potentially bearish hanging man last week failed to confirm. This week, the Nasdaq 100 had another strong week, up 1.8 percent to 17962, which is more than 1200 points from the prior record high of 16765 from November 2021. The prior high was surpassed on December 19th.
This week’s was a 14th up week in the last 15. Things are hot and heavy, with the weekly RSI at 74.63, which is already a level that is hard to maintain. Tech bears’ problem is that momentum has refused to break down.
Russell 2000 mini-index: Currently net short 20k, up 9.5k.
The Russell 2000 (2001) rallied 2.4 percent this week to close right at 2000, which has created problems for small-cap bulls going back to August 2022.
Earlier on December 13th, the small cap index broke out of a 200-point range between 1900 and 1700, which had been in place since January last year. A measured-move target of the breakout would amount to 2100, which was just about hit two weeks later when on December 27th it reached 2072. Near term, small-cap bulls have a shot at that high.
US Dollar Index: Currently net long 1.5k, up 1.2k.
The US dollar index, up six weeks in a row after bottoming at 100.32 on December 28th, ended up 0.2 percent to 103.99, but the bulls failed to save Monday’s intraday high of 104.47. It remains above both the 200- and 50-day (respectively 103.40 and 102.80).
Earlier, the index peaked on October 3rd at 107.05 and began to really come under pressure early November. Post-Fed pivot on December 13th, it sliced through horizontal support at 103-104. It has now made a return trip to that level.
Going back all the way to 1999, 103-104 has proven to be crucial for both bulls and bears. Upward momentum will pick up steam once 103-104 gives way.
VIX: Currently net short 49k, down 5.6k.
VIX gave back 0.92 points to 12.93 but maintained a streak of higher lows since December 12th when it tagged 11.81 intraday. This week’s low of 12.69 was recorded on Friday.
That said, the weekly RSI turned lower from just under the median. Near term, this can further help the volatility bears.
Read Full Story »»»
DiscoverGold
By: Hedgopia | February 10, 2024
• Following futures positions of non-commercials are as of February 6, 2024.
E-mini S&P 500: Currently net short 233k, up 7k.
We are seven trading sessions into February, and the S&P 500 is already up 3.7 percent for the month. This follows an up 1.6 percent in January. The January barometer, which posits that ‘as goes January, so goes the year,’ bodes well this year. The maxim does have a strong record, including last year (more on this here).
That said, it also does not hurt keeping in mind the fact that the large cap index has had a phenomenal time since bottoming late October last year. From that low, it is already up 22.6 percent. It has now rallied in 14 of the last 15 weeks, with the last five in a row.
One after another metric is crying ‘overbought’. In fairness, it has been this way for a while now. Just because things are overbought does not mean a reversal has to occur right away. The weekly RSI, for instance, ended this week at 74.74; the last time this indicator was at least as extended was in December 2019-January 2020. Back then, the index peaked February 19th at 3394 and proceeded to tumble 35 percent in the next five weeks. The Covid-19 was the catalyst for the selloff back then. Yes, equities are grossly extended, but unless a catalyst for a selloff emerges, it is the bulls’ ball to lose.
Nasdaq (mini): Currently net long 32.9k, down 6.4k.
What looked like a potentially bearish hanging man last week failed to confirm. This week, the Nasdaq 100 had another strong week, up 1.8 percent to 17962, which is more than 1200 points from the prior record high of 16765 from November 2021. The prior high was surpassed on December 19th.
This week’s was a 14th up week in the last 15. Things are hot and heavy, with the weekly RSI at 74.63, which is already a level that is hard to maintain. Tech bears’ problem is that momentum has refused to break down.
Russell 2000 mini-index: Currently net short 20k, up 9.5k.
The Russell 2000 (2001) rallied 2.4 percent this week to close right at 2000, which has created problems for small-cap bulls going back to August 2022.
Earlier on December 13th, the small cap index broke out of a 200-point range between 1900 and 1700, which had been in place since January last year. A measured-move target of the breakout would amount to 2100, which was just about hit two weeks later when on December 27th it reached 2072. Near term, small-cap bulls have a shot at that high.
US Dollar Index: Currently net long 1.5k, up 1.2k.
The US dollar index, up six weeks in a row after bottoming at 100.32 on December 28th, ended up 0.2 percent to 103.99, but the bulls failed to save Monday’s intraday high of 104.47. It remains above both the 200- and 50-day (respectively 103.40 and 102.80).
Earlier, the index peaked on October 3rd at 107.05 and began to really come under pressure early November. Post-Fed pivot on December 13th, it sliced through horizontal support at 103-104. It has now made a return trip to that level.
Going back all the way to 1999, 103-104 has proven to be crucial for both bulls and bears. Upward momentum will pick up steam once 103-104 gives way.
VIX: Currently net short 49k, down 5.6k.
VIX gave back 0.92 points to 12.93 but maintained a streak of higher lows since December 12th when it tagged 11.81 intraday. This week’s low of 12.69 was recorded on Friday.
That said, the weekly RSI turned lower from just under the median. Near term, this can further help the volatility bears.
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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