The rise and fall of the S&P 500

Market Pulse for May 6

COT Data

On the weekly chart we see the strong uptrend intact. And big money has done their part on making sure of that. Looking at the Traders in Financial Futures COT, this past week we saw Dealer/Intermediary add to net shorts now at -719,244 contracts, Lev Funds actually dropped net shorts to -227,194 contracts and Asset Managers dropped net longs to 899,922 contracts. Remember these are net positions meaning the difference between these groups’ total longs and shorts. Definitely not small numbers.

You may wonder where all this money comes from for these institutions to trade these markets like they do. You need to look no further than the $85 billion the Fed is printing each month. And if you are wondering who the Dealer Intermediary group represents, think too-big-to-fail banks like JPMorgan, BofA, Citibank and Goldman Sachs. If you trade futures, forex, ETFs or options, then tracking how big money as a group moves through these markets in imperative to your success as a trader. So watch closely as these institutions will give you a sign when a large correction is coming.

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...

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