The June 2012 mini Dow opened last week at 13,171 and closed Thursday, the last full trading session for the week at 12,978. On Friday’s close at 8:15AM CT the Dow was down 120 to 12,858. Why the drop? The US jobs report released at 7:30AM CT showed numbers lower than expectations. Instead of creating more than 200,000 jobs in March, the number came in at 120,000. It probably was a good thing the markets closed 45-minutes after the report was released otherwise Friday could have been real ugly going into the Easter and Passover weekend.
On the daily chart below, technically we see the market is in a weak trend with ADX at 18. MACD has increased divergence down and is bearish and Stochastics have entered oversold territory. Remember technically, weak trending markets generally will not remain overbought or oversold for very long. You can see this on the daily chart by how long the Dow was overbought as ADX showed a strong trend.
Proceed to Page 2 for the latest COT Data...
Can the COT help with seeing how “big” money is moving in the Dow? Look at the weekly chart and the answer is very clear. Just look at what happens when you see increased buying (by Large Spec) and increased selling (by Commercials). Look at the breakouts over 9,000, 10,000, 11,000, 12,000 and most recently 13,000. This past week we did see liquidation by Large Spec and Commercials. If this continues, just look back to mid-April 2010 to see what will happen. Of course, we do need to see Ben’s (Fed) reaction to March’s jobs report. Could US stimulus be put back on the table? Remember the Fed minutes from last week. It sounded like US stimulus was off the table, and the markets reacted that way. So we have much to watch this week. AND GRAIN TRADERS — I will analyze today’s Crop Progress tomorrow along with tomorrow’s WASDE report.
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...
To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures
