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IWM

Long Russell! - Trading w Commercials - Fading Speculators (COT)Looking at the net positions of the Commercials (Red Line), the Russell 2000 is at record high levels. Additionally, the small speculators (Blue Line - tough to see but it's blown up on lower indicator)) are very short compared to historical levels. The COT index on the bottom shows dark green when both commercials are maxed net long and small speculators are maxed net short. Use a daily chart with your favorite indicator/candlestick pattern to look for entry - be patient - don't forget a stop. See below for explanations of what you're looking at and what I'm talking about with COT RISKS: The trend is down which makes this counter-trend trade COT Definitions: - COT: Commitments of Traders Reports - A weekly report published by the government (CFTC) that shows long and short positions of the below 3 groups (As well as much more data I don't look at). We look at the NET positions of these 3 groups and compare them to historical levels to signal trade opportunities 1- Commercials: Hedgers - We want to trade with them when they're at extreme levels (Think Tyson, Cargill, General Mills, etc) 2- Large Speculators: Hedge funds and large institutions - We want to fade them when they are at max positions (Think suits in NYC and commodity funds) 3- Small Speculators: People/institutions trading small lot sizes not big enough to report to CFTC - We want to fade their max positions as well since they represent the public (Think dude in his PJs trading and small trading firms) Indicators on Chart: - The first indicator shows the net positions of the 3 groups above plotted over time - The second indicator is an index of the relative buying/selling of commercials over a certain lookback period. Anything above 95 is looking for buy, look to sell when it hits 0 - Note: Just because the Commercial's net position is negative doesn't mean it can't be relatively net long and signal a buy (same in the opposite scenario) Trade Setup - Both Must Happen: - When commercials are at max levels we are alerted to buy or sell (Depending on the criteria above) - On a daily chart, use technical indicators, candlestick patterns, news, etc to enter the trade (not shown here)
CME_MINI:RTY1!Long
by Rudeadam18
1
SPY and ESIndexes are still sideways on weekly timeframe between 3640 - 3950. Its been 5 weeks for now and i think we may have another week of this chop. Market will mostly break this range after the fed meeting on JUL 27th. If we look at candle stick chart on weekly time frame, we can see that we had alternate red and green weeks and mostly closed below the 50% of the range for the week if its a red week and above 50% of range if its a green week. This week broke that pattern, we had a red week but closed almost at the highs of the range. POC and also is at the highs of the week which is good. Coming to the Daily profile, Friday's profile is pretty peculiar with single prints above and below the close price. You can see that we have single prints from 3884 - 3900 on the upside and 3820 - 3811 on the downside which were created Friday on the back of strong retail report. Pretty rare that we see single prints both above and below so close to the closing price of the week. Coming to Friday’s profile, its a “P” shaped profile which generally indicates emotional short term trading especially when it occurs in a choppy range based market. UUP weekly candle looks like a topping candle but i would have been more confident if we got it on DXY too. DXY weekly has back to back top wicks after an extended rally. So, there could definitely be merit for UUP topping candle. As i have been saying for several weeks now, this USD strength is not good for global economies. Leave Asia or Africa, take Europe as an example, EU is a net importer of primary goods. They import most of food, beverages and oil whose prices have been soaring and due to USD strength, their Euro is down in the gutter already. USD/EUR is at parity last week. If this dollar strength persists, EU will have a lot of pressure on its forex reserves and combined with their central bank lagging miles behind the curve on inflation and rate hikes, its a recipe for disaster. US equities cannot stage a consistent rally unless USD comes under control imo. OIL is another market which needs to hold around this 90-100 range imo. Apart from severe demand destruction, i don't see any other reason why oil should come down drastically especially with Biden’s Saudi trip not yielding much results. If demand destruction occurs, it should only come with recession whether mild recession or strong recession is another debate altogether but we should have something which is again not good for markets. CPI came in pretty hot last week and everyone was calling for a crash on markets with some people calling 3400, 3500 on ES but i had a different view. I said it will be really difficult for markets to break 3700 and ES held that level like a champ and rallied almost 150points. The main reason for this is oil prices being down a lot from last month and that should help reduce next months CPI reading. Although oil prices are just down to may levels where we had high CPI number too, it is only one piece of the puzzle. Take a look at commodity prices, they are off 21% from highs and still down 10% from may readings too. Shipping prices well off their highs too and these two things combined with oil prices should give us a lower CPI reading imo. Market is always forward looking and i thought if CPI reading was going to come in lower for JUL month, there is no need for markets to panic on last reading. Thats why i was inclined towards that down move being a trap for bears. Being said that about CPI, now FED needs to calm down and not do 100bps hike on JUL 27th meeting. If indeed CPI is going to come down next month, there is no need for them to be too aggressive with 100bps hike and choke off money supply to the markets. I personally would like 50bps hike in JUL, AUG and SEP rather than than do 75bps now and 25bps in SEP just to give economy a little breathing room to regain its growth but more than likely they might go 75bps in JUL. In any way market is already anticipating 75bps and should be ok with it as long as Powell’s language doesn’t seem too hawkish. Levels for week: Bull Bear line - 3870 Below 3870, We can see 3826, 3812, 3776, 3756 Above 3870, we can see 3886, 3900, 3912, 3950.
CME_MINI:ES1!
by savage_Trader
Possible top coming soon for $DXY?I can't say that I've called a top using trendlines atop of a bullish trend, but I've seen a few others do it. With the rise in the dollar bringing mass bearishness to rest of the investment complex, a pause could bring some welcome relief. Anyway, I thought the timing might be relevant as important lower levels approach in $CL, $UX, and some metals, as well being overdue for a meaningful bounce in the equities. I will use the $109.xx marker in DXY to signal a buying point for small positions in UUUU, UEX, NXE, USO, GDX, SILJ, SPY, IWM, AAPL, AMD, et al
TVC:DXYLong
by tfoley472541
1
Not Cheap YetSome people say that things are getting cheap. I agree, they are in the process of getting cheap, but we're not quite there yet as far as historical bottoms go. The Russell isn't that cheap yet, still twice as expensive as in 2009. Unless a true miracle happens, it's hard to see any upside in this market as far as real wealth terms(as opposed to numerical price increase) in the near future. On the contrary, we have seen much further downsides in the past. We might see a reflexive bounce in the future and a bear market rally, though we are in a steep downward momentum. Good luck and don't forget to hedge your bets!
AMEX:IWMShort
by fringe_chartist