This past week the December 2012 E-mini S&P 500 opened at 1423.50 and closed the week at 1424.00, hitting a weekly high of 1459.75, and low of 1416.50. You may have seen or heard that many Wall Street firms, including Goldman Sachs, are forecasting new highs in 2013 for the S&P 500. So where does the E-mini S&P need to go to do this? Well let’s take a trip back in time. First stop: March 2000 where the monthly high was 1574.25. This of course was before the dot com collapse. Now, moving forward in time to October 2007 we see a monthly high of 1586.75. This of course was before the incredible mortgage bubble burst collapsing this market once again.
Technicals on the daily chart show a weak trending market with ADX at 18 and DI- over DI+. MACD is adding a bit of divergence from below the signal line and Stochastics are mid-range and dropping. Looking at the price action you clearly can see the range between 1460-1420. And check out Friday’s drop of 27½. Watch earnings this week, also FOMC meetings Tuesday and Wednesday, and U.S. GDP on Friday.
Proceed to Page 2 for the latest COT Data...
On the weekly charts, you can see Dealer Int. increase their net shorts from -569,818 contracts on Oct. 12 to -605,042 contracts net short on Oct. 19. Leveraged Funds were net short -327,779 contracts on Oct. 12 and dropped to -287,165 contracts net short. Now on the buy side we see Asset Managers increasing their not longs from 823,230 contracts to 839,064 contracts net long on Oct. 19. Look at what happens to the E-mini S&P when Dealer Int. start liquidating net shorts. Watching this will give you an edge for catching the next major drop when it occurs. 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...
Have a prosperous trading week.
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