coolhand's Account Talk

[coolhand]

This week's NAAIM reading shows the mean average falling almost 13 pts. That's not terrible if you're a bull because it still keeps the mean average in a bullish configuration. The bears went from 3/4 short with NO leverage last week to fully short and FULLY leveraged this week. That raises the chances for some downside action, over the days ahead. The bulls remain fully long and fully leveraged. So, while we may (or may not) see some weakness in the days coming up, the overall posture for these money managers is bullish.

 

[coolhand]

The latest NAAIM reading shows the mean average spiking higher by almost 18 pts. That keeps the reading bullish. In fact, it's very bullish. The reading has room to go higher, but not by much. The bears (what's left of them) were fully short and fully leveraged last week. This week, the bears are only 40% short with NO leverage. The bulls remain fully long and fully leveraged. Since this is smart money, the very high bullish reading should not be taken as a contrarian indicator unless other sentiment measures are also showing high bullish levels. And even then I'd be cautious as sentiment indicators can get stretched longer than expected.

 

[coolhand]

The latest NAAIM reading has the mean average falling about 13 pts. The reading was pretty bulled up last week, so this 13 pt. drop doesn't change the bullish posture for this group of money managers. The dip in bullishness appears to be related to the bears going from just 40% short last week (no leverage) to FULLY short and FULLY leveraged this week. The bulls remain fully long and fully leveraged. So, the overall reading continues to favor the bulls. The leveraged short positions appear to be some money managers trying to scalp any weakness that may manifest given the overbought conditions of the market overall.

 

[TommyIV]

The dip in bullishness appears to be related to the bears going from just 40% short last week (no leverage) to FULLY short and FULLY leveraged this week.

This looks like one of those setups that can actually fuel a rally. If prices simply hold steady, those heavily leveraged shorts may start feeling the heat and would need to buy to cover, potentially driving the market even higher.

 

[coolhand]

This looks like one of those setups that can actually fuel a rally. If prices simply hold steady, those heavily leveraged shorts may start feeling the heat and would need to buy to cover, potentially driving the market even higher.

Absolutely. I've seen it happen many times to this smart money.

 

[dannyboy]

Thanks for sharing your thoughts.
D

 

[coolhand]

I wanted to post this earlier, but the NAAIM reading doesn't always get posted in a timely fashion. This week's reading shows the mean average dipping about 2.5 pts. That keeps it in a bullish posture. The bears, who were fully short and fully leveraged last week, are still fully short, but only 25% leveraged. The bulls remain fully long and fully leveraged.