Tags: Commercial | Hedgers | S&P | Rally

Commercial Hedgers' Strategy Hints S&P May Extend Rally

By    |   Tuesday, 15 Nov 2011 08:33 AM

I have written about the Commitment of Traders report a number of times before, but every time before I have talked about the large speculator group. This time is different though as it is the commercial hedger group that caught my attention.

In the most recent Commitment of Traders report, the commercial hedgers show a net long position of over 340,000 contracts on the E-Mini S&P 500 futures. This is the biggest net long position by this group in the past year and the position has been building for the last four weeks.

Commercial hedgers are investment houses and broker/dealers, the ones with a stake in the game. Normally the hedgers will be on the opposite side of the large speculators as they serve as market makers.

With large speculators having a big net short position it’s not surprising to see the commercial hedgers with a big net long position. However, in the last few weeks the large speculators have cut back on their net short position while the hedgers have continued to grow their net long position.

What this suggests is that the S&P is likely to continue its rally into the end of the year.


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I have written about the Commitment of Traders report a number of times before, but every time before I have talked about the large speculator group. This time is different though as it is the commercial hedger group that caught my attention. In the most recent Commitment...
Commercial,Hedgers,S&P,Rally
197
2011-33-15
Tuesday, 15 Nov 2011 08:33 AM
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