Monday, April 02, 2007 6:52:00 PM
Hi AJTJ,
Thanks for your comment on CSCO. I agree with your comment that CSCO earning and the Fed announcement will likely be the catalyst for the next market direction as you noted as “a key market turn” event.
CSCO remained in a trading range, 17-22, for two years from Jul 2004 to Jul 2006. During that time, most of analysts and market participants abandoned CSCO as a bellwether stock. I think that it was a management change when CEO Chambers changed his position or responsibility in the company which sparked the rally after higher earning guidance pushing the stock to breakout level above 22. Since then it ran to retest the Jan 2004 high near at 28 during Jan 2007. So far, CSCO is showing “3yr Cyclical” price performance. It is now trading with a “Round Top” formation since Jan 2007 top with a support at 25. It already established ST downtrend formation.
I can see that large speculators are net long since March double bottom and commercials decreased the risk since Feb 2007 high.
the SPX big contract commercial traders are practically net long, which has not happened since Oct. 2005 from my memory.
http://www.softwarenorth.net/cot/current/charts/SP.png
Could you explain where you see that big contract commercial traders are net long? The chart shows Large, Small, and Commercial speculators. Are you saying “commercials” or “large speculators”? I think that you are referring to “Commercials”. It seems to me that Commercials reduced the risk hedge as we can see that Commercial net-short positions are small since 3/20/07 after the “double bottom” suggesting that Commercials do not see a significant market sell-off.
Thanks again for your excellent comments.
Thanks for your comment on CSCO. I agree with your comment that CSCO earning and the Fed announcement will likely be the catalyst for the next market direction as you noted as “a key market turn” event.
CSCO remained in a trading range, 17-22, for two years from Jul 2004 to Jul 2006. During that time, most of analysts and market participants abandoned CSCO as a bellwether stock. I think that it was a management change when CEO Chambers changed his position or responsibility in the company which sparked the rally after higher earning guidance pushing the stock to breakout level above 22. Since then it ran to retest the Jan 2004 high near at 28 during Jan 2007. So far, CSCO is showing “3yr Cyclical” price performance. It is now trading with a “Round Top” formation since Jan 2007 top with a support at 25. It already established ST downtrend formation.
I can see that large speculators are net long since March double bottom and commercials decreased the risk since Feb 2007 high.
the SPX big contract commercial traders are practically net long, which has not happened since Oct. 2005 from my memory.
http://www.softwarenorth.net/cot/current/charts/SP.png
Could you explain where you see that big contract commercial traders are net long? The chart shows Large, Small, and Commercial speculators. Are you saying “commercials” or “large speculators”? I think that you are referring to “Commercials”. It seems to me that Commercials reduced the risk hedge as we can see that Commercial net-short positions are small since 3/20/07 after the “double bottom” suggesting that Commercials do not see a significant market sell-off.
Thanks again for your excellent comments.
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