Latest Commitment Of Traders Report - Noncommercial Positions

Small-cap bulls enjoyed yet another mini-breakout on the Russell 2000 (1892.45).

Right after the November 3rd presidential election, the small cap index decisively broke out of 1600-plus, which had been an important price point dating back to January 2018. Post-positive vaccine news from Pfizer (PFE) on the 9th last month, it rallied more, and still more a week after that when Moderna (MRNA) announced its own positive vaccine news. It was also on the 16th the Russell 2000 conclusively rallied past the prior high of 1742.09 from August 2018.

For the past eight sessions, rally attempts were rejected at 1850s-60s. At the same time, bulls absorbed selling pressure by showing up at the 10-day. Friday, the Russell 2000 broke out; the economy created fewer jobs than expected in November, but it seems no one wants to sell the now-outperforming small-caps in a seasonally favorable period.

US Dollar Index: Currently net short 3.1k, up 321.

No sooner did the US dollar index lose 92 than selling intensified. This support goes back to at least June 2003. After defending for three months, dollar bulls lost this level right before Thanksgiving, albeit slightly. As soon as December began, a new round of selling got underway.

Friday, the dollar index (90.69) tagged 90.47 intraday, slightly undercutting Thursday’s intraday low of 90.50. Unless things stabilize soon, bears are probably eyeing multi-year horizontal support at 88-89.

VIX: Currently net short 91k, up 4.3k.

VIX (20.79) held up better versus the S&P 500 which rallied 1.7 percent. The volatility index was only down 0.05 for the week.

VIX broke 20 last Friday, but volatility bears were unable to build on that. This occurred again on Friday. This week, Wednesday producer a hammer, Thursday a doji and Friday another hammer – all this right underneath the 10-day. The daily MACD looks to be on the verge of a bullish crossover.

Concurrently, traders keep aggressively accumulating calls. In three sessions this week, the CBOE equity-only put-to-call ratio produced readings in the 0.30s, and the other two in the 0.40s. The 21-day moving average of the ratio made a new all-time low of 0.428 on Friday. Sentiment is effusive. Unwinding is just a matter of time and will be painful once the process begins.

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