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| SPX Daily |
VIX futures positions from the COT report have gotten even more extreme than the chart I posted yesterday. This is a BIG red flag for stocks over the next 3-4 weeks (or maybe longer). Commercials are also pretty heavily net short Naz & Dow futures... almost back to the levels from April-May... which was right before we rolled over.
I commented about the commercials extreme positions back in MARCH and APRIL, but since it hasn't been worthy of much attention the last few years, I didn't emphasize it as much as I should have. This year, the COT reports HAVE been worth paying attention to.... and I want to share my opinion LOUDLY this time:
BE CAREFUL ON THE LONG SIDE FOR THE NEXT 3-4 WEEKS, or until some of these positions in the futures markets are unwound a bit. These COT positions are generally NOT short term indicators, so it's important to recognize that we could still see some upside. Under the surface though, some of these positions are about the same as they were back in April & May. In the case of the VIX futures, the latest report is showing positions are actually MORE extreme now than they were back then. I encourage anyone playing the long side (I'm currently long so I'm talkin' to me too) to check your timeframes and review the status of all your positions. Tighten up your stops and honor them if they trigger.
