Data Bullish for Banks, Bearish for 30-Year Bond -- MrSwing

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Data Bullish for Banks, Bearish for 30-Year Bond
Nov 08, 2009

Alex Roslin

COTs Timer
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What a wacky week! Sorry about my delayed post about my trading signals from Friday's Commitments of Traders report. I've just updated my latest signals tableU.S. BKX Bank Index and bearish for the 30-year Treasury bond
based on the COT data. Two new signals for this coming week's open of trading: bullish for the (meaning the yield would rise).

As you can see from my table, the new data is tilting to the bullish for the coming week - particularly the latest numbers from my BKX setup. That setup is based on the three-month Eurodollar contract. The large speculator total open interest, which has a 61-percent correlation with next week's BKX value, has done a major about-face after three weeks getting steadily more bearish. In fact, in absolute terms, the total open interest is higher than it's been since Feb. 2008. Mind you, that correlation isn't a perfect one and isn't always correct - as happened this past week. But there is also some confirmation from the small trader total open interest, which has a 41-percent correlation with next week's BKX and also shot up in relative terms.

Sorry I don't have time for a fuller post this weekend, but be sure to check back in early this coming week for an update of my portfolio page. Good luck this week!

by Alex Roslin - http://cotstimer.blogspot.com/
May the Commitment Of Traders be with you...