Tag Archives: COT

The ‘Smart Money’ Doesn’t See a Market Bottom

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What if there was a way to see the positions various market participants were holding? There is, and the data is released to the public every Thursday. In this week’s article for TraderPlanet I take a look at the Commitment of Traders data and how the ‘smart money’ doesn’t believe we have hit a bottom in the S&P 500 quite yet.

Click over to read my analysis: The Smart Money Doesn’t See a Market Bottom Yet (TraderPlanet)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+.

Crowded Trades

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I’ve referenced Mary Ann Bartel, Head of Technical and Market Analysis for Bank of America Merrill Lynch a few times on this blog (here and here). Barron’s writer Brendan Conway just came out with a piece highlighting some of Bartel’s musings on some crowded long trades taken by hedge funds.

From Barron’s:

  • Equities. Large specs bought the S&P 500, flat the NASDAQ 100 and partially covered Russell 2000. The NASDAQ 100 is in a crowded net long[.]
  • Agriculture. Large specs sold agriculture across the board – soybeans, corn and wheat. All three remain in a crowded net long though[.]
  • Metals. Large specs bought metals across the board – gold, silver, copper, platinum and palladium. Readings are neutral[.]
  • Energy. Large specs bought crude and gasoline, sold heating oil, and added to their shorts in natural gas. Crude oil is in a crowded long[.]
  • Forex. Large specs bought JPY & USD, and partially covered euro out of a crowded short for the first time since Nov’11. USD is in a crowded long[.]
  • Interest Rates. Large specs bought 30-yr, but sold10-yr & 2-yr Ts. 10-yr are in a crowded long; 30-yr is approaching a crowded long[.]

Mary Ann is making these assumptions based on recent COT data. The article is associated Large Speculators as hedge funds, which is partially true but other traders can makeup this categorization as well. I think a lot of insight can be gleaned from COT data, and it’s a place to get a glimpse at how traders are getting positioned. Bartel’s assertion of Large Speculators being overly crowded in the Nasdaq 100 and some of the agriculture names makes sense as hedge funds seem to be chasing performance to make up for their lack of outperformance in 2010 and 2011.

Source: Hedge Funds Are ‘Crowded Long’ In Nasdaq 100, Oil, Agriculture: BofA’s Bartels (Barron’s)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+.