I MAY HAVE SOMETHING WITH MY NEMESIS AFTER ALL
I mentioned that I would play around with my COT indicator to see if I could improve it over the holidays, and I may have stumbled onto something very quickly with it. I have not studied this enough across all markets to see how well it holds up, but it certainly is fantastic in the DX market above. Of all the signals it indicates here only two did not have a tradeable move. There were 13 signals, so 11 out of 13 were correct which is hard to beat with something like this. I will keep working on this, but it looks like I am on a good path to making this a bit better. What I really like about this new look is how well it picked major highs and lows. I am not in the business of trying to pick high and low points, but if we can have something that gives us an idea of where they might be occurring it could certainly be a big help.
Here is another chart with the signals market, again awfully good.
What is really remarkable about this is how many signals it generates considering it is based on fundamental information. As it always seems to be the case, I should have thought of the tweak I have applied to this long before now. It always seems obvious after the fact doesn't it? However, I have lived the Euphoric runs with new discoveries time and time again and later had the discoveries been busts, so I have to study this further. For the time being, I am going to be displaying this in lieu of the old one for analysis purposes. It did tell us stocks were a buy last week on the dip, so we should be long based on this for now.
For those monitoring that stock trade in COO, the exit price for that today is a close at 69.57 or lower. If it is anything other than that it is a hold overnight situation. We are really swimming against the tide trying to short something here, I am really curious to see what winds up happening on this one.
I was mentioning that the Bonds were setting up a sell, here is what the newly configured COT stuff says. It tells us it is coming but not here yet, so we can watch this as a live example and see how this works. I have labeled all the signals on the chart above 75 and below 25. With these signals 16 out of 20 gave at least a 3 week move in the indicated direction, impressive.
The reading is still in the 30's right now and needs to get under 25 so that means it is likely we need at least another week of action to get down there if we do go down there at all. I am very anxious to see how this plays out. It is way to premature to talk about what this change is, and if it will stand the test of time and scrutiny. If it works as well as it appears to, I doubt I will publicly reveal it. I will be willing to tell people if it is saying buy or sell for any specific market. I may even do a weekly summary on the weekends in advance of what it is calling for in which places. If it holds up I will probably incorporate this into whatever I wind up offering through my web site.
For now it looks like trend up into the end of the year for stocks, the short term sells are there but I doubt they will be triggered.