The COT data for the 5 yr Note, 10 yr Note, and T bond futures shows a trend of short covering over the last few weeks, making small speculators the least short 5yr and 10 yr Treasuries since Sept 2017, least short Treasury bonds since January 2018. September 2017 happened to be the top for Treasuries last year, and January 2018 was right before the big drop in Treasuries earlier this year.
It is not the large speculators which are the contrarian indicator in the COT data, it is the small speculators. And although they are a smaller percentage of open interest, they are the weakest hands in the futures market, with the worst track record, and therefore the best contrarian indicator in the futures space.
The small speculators are a bit harder to track in the equity futures space, because of the emini and large S&P and Nasdaq futures contracts, but there is a small long in combined S&P futures positions and a small short in combined Nasdaq futures positions, so no extremes as of August 28.
Market looks range bound here, consolidating the breakout from the double top at SPX 2870. Despite what the bullish sentiment poll numbers say, the anecdotal evidence doesn't seem very bullish, and if anything, traders seem somewhat cautious here, perhaps because everyone knows that September is a seasonally weak month. But the overseas markets trade heavy and that should eventually lead to a capitulation sometime this fall, which will take the S&P down with it. Timing it will be a bit harder, but it probably happens when corporations can't buy back stock.
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5 comments:
I didn't read whatever the fuck you just wrote up there. I'm sure it was nice with all the nice charts and shit. But I was at this place called Raising Cane's yesterday night. You ever heard of that? I mean growing up we had Burger King, MacDonalds, Wendy's, maybe In N' Out. But there is this new shit called Raising Cane's.
Anyways, I had to wait in line at 10 pm to get my food from this place last night. Two things I noticed about this place. All the customers and the workers were under 20. Second, all the customers I noticed all paid with credit cards.
I mean besides the food being fucking good (I never had this kind of shit growing up taste this good, and I'm sure it's totally bad for you), I was surprised that all these young kids have credit cards. When I was there age I never had a fucking credit card. My mom gave me a $5 allowance maybe and if I had enough after buying a soda at the liquor store I would go to the Little Caesars and get their slice and coke special for $3.99. The same was true for all my other friends.
These kids nowadays, all of them fucking have credit cards and they are buying shit left and right so they can run up their balance to $2000 and pay $30 bucks a month till infinity.
This tells me two things. The US economy is overextended as shit if high school kids are running around paying for shit with credit cards.
Something bad will happen. I believe consumer credit is extended at all time highs and this could possibly be the next bubble to pop. I'm sure the same phenomenon is happening around the world with these millennial Y population. I'm not even talking about the real millennials here but the generation under that.
Student loans. It is turning college grads into debt slaves, which most of them will never be able to fully pay off. Tuition is a ripoff and wages hardly go up so workers end up having to carry around tons of student debt for decades. And don’t forget the US government, giving everybody tax cuts while increasing the budget bigly. It makes the US economy look great compared to the rest of the world, but it won’t last. We will have a bear market start within a year and it is going to get ugly.
Trendrambo on Twitter:
markets will be the most difficult to trade under the Trump presidency
A couple of days ago the timing of the China tariff news:
Released after futures closed with market slightly oversold and on a bearish tariff
pre-announcement - 10% instead of 25% was enough to rip the light volume overnight futures for a bullish day.. well executed trade via WH-GS
It is obvious now the GS employees were serving as trading liaisons btw GS and the WH … last year they were setting up shop ,JBO’ WH – GS – FED
Trump proving to be the most effective but unfortunately unpredictable SPX driver
Mr prez became a highest paid wall street ho’ for the bankers
TrendRambo:
markets will be the most difficult to trade under the Trump presidency
A couple of days ago the timing of the China tariff news:
Released after futures closed with market slightly oversold and on a bearish tariff
pre-announcement - 10% instead of 25% was enough to rip the light volume overnight futures for a bullish day.. well executed trade via WH-GS
It is obvious now the GS employees were serving as trading liaisons btw GS and the WH … last year they were setting up shop ,JBO’ WH – GS – FED
Trump proving to be the most effective but unfortunately unpredictable SPX driver
Mr prez became a highest paid wall street ho’ for the bankers
Yes, Trump has sold out to Wall St. His staff is filled with GS alum, and they did their job by gifting GS billions of dollars through tax breaks and more importantly, inside information which they use to front run Trump announcements.
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