The "set-up" is a series of simultaneous existing conditions that indicate a specific futures or commodities market is ready to be entered with a good chance of profit either on the long or short side.
In terms of the "commercials" on the SP being early, here are some data points for reference ... judge for yourself how early they can be.
Some Specific History of Commercial Positions - SP (known as the big SP).
02/04/83 first recorded data I have on the commercials
03/14/86 largest net-short position to that point -16,176 contracts with SP at 613.30
05/27/94 highest net-long position to that point +54,471 contracts with SP at 762.45
04/09/98 2nd largest net-short position to that point -15,564 contracts with SP at 1326.00
10/22/99 peak net-long position just before commercials started to get deeply net-short + 38,877 contracts with SP at 1389.80
12/10/99 commercials net-short -21,612 contracts with SP at 1548.70 [they are starting to signal the end of the bull trend]
05/12/00 commercials get net-short by a small amount ... they will stay net-short every week until 03/28/03, a total of 34 consecutive months
03/09/01 commercials at largest net-short position in history -111,956 contracts with SP at 1261.40
04/17/03 commercials net-long + 14636 contracts with SP at 891.20. [probably signaling that the end of the bear trend is coming or perhaps that we are getting close to a big bear market rally]
NOTE: when the commercials were net-short the SP by 111,956 contracts on March 9, 2001, the margin money they had frozen in their accounts to hold these positions was about $20,000 per contract or $2,239,120,000.00 = $2.2 billion
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