You can see a different picture on the weekly chart below, as ADX is at 66 showing a strong trend up. Weekly Stochastics shows the market in deep overbought territory, and yes even in the Dow the COY shows how “big money” moves the market. Just look at the movement of Commercial net shorts and Large Spec net longs. See how the weekly price action moves, interesting isn’t it? As of last week Commercials are net short -34,175 contracts and Large Specs are net long 30,928 contracts.
And just for fun look at the monthly chart. See the monthly price action in March and April 2011. Now look at May 2011, this is when the drop of 2011 started, bottoming out in September 2011 at 10,500. Could 2012 look the same? It is possible, especially if the coming correction turns into a trend change. Have a prosperous trading week.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...