Peeking Into The Future Thru Futures, What Hedge Funds Were Buying This Week

Near term, after the March 5th low, the Nasdaq 100 (13329.51) put in a higher low on the 25th. On Thursday, it reclaimed the 50-day. A gap from February 22 gets filled at 13540s. Bulls are probably eyeing that for now.

Russell 2000 mini-index: Currently net short 10k, up 19.2k.

On both Tuesday and Wednesday, bids showed up at short-term support at 2150s. Earlier last week, the Russell 2000 (2253.90) just about tested horizontal support at 2070s-2080s – successfully.

There is room for the daily to rally. The small cap index peaked on March 15 at 2360.17. In the selloff that followed, an ascending channel from late October-early November last year was breached. March was an up month – sixth straight and 11 out of last 12 – but also formed a monthly spinning top. This showed up after rallying 144 percent from the low of March last year. That is a lot of paper gains not to be tempted to lock in.

US Dollar Index: Currently net long 5.7k, up 343.

The US dollar index managed to rally 0.2 percent this week – fifth up week in last six – but at the same time was unable to hang on to all of the gains. Through Wednesday’s high of 93.47, the index (92.95) was up 0.7 percent; the session ended up with a spinning top, even as the weekly produced a shooting star.

From early this month when it bottomed at 89.17 (support at 88-89 goes back to May 2004), the US dollar index rallied just under five percent before this week’s rather lethargic action. The 200-day lies at 92.66, followed by a breakout retest just north of 92, which has proven to be an important level going back 18 years. This will be an important test.

VIX: Currently net short 94.4k, down 7.9k.

VIX suffered a mini breakdown of sorts.

Last week, the volatility index (17.33) breached low-20s to close at 18.86. This week, Tuesday’s rally attempt was rejected at the 20-day as VIX retreated after tagging 21.75; by Thursday, short-term support just under 19 was compromised.

The path of least resistance near term is toward the mid-teens.

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