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.

 

[coolhand]

This week's NAAIM reading sees the mean average dip about 2.5 pts. That keeps the reading bullish overall. The bears, who were fully short last week (but only 25% leveraged), are now Fully short AND Fully leveraged. The bulls remain fully long and fully leveraged. So, I'm anticipating this market finds a way to drift higher (this may be index dependent), but the bears believe they might be able to scalp some selling pressure in the near term.

 

[coolhand]

The latest NAAIM reading shows the mean average dipping a little more than 4 pts. The reading was still bullish last week, but this dip moves us into a neutral to modestly bullish posture. This is the 5th week in a row that the mean average has fallen to some extent. The bears were fully short and fully leveraged last week and they remain that way this week. The bulls remain fully long and fully leveraged.

So, I still see the bulls being favored, but the waning bullishness over the past few weeks may be an indicator of selling pressure that could manifest in the days or weeks ahead. I would think any selling pressure may be of fair significance, so keep a close eye on your technical indicators.

 

[coolhand]

After 5 consecutive weeks of declining bullishness in the NAAIM reading, the mean average popped almost 20 pts higher taking the reading from neutral to modestly bullish last week, to very bullish this week. The bears went from fully short and fully leveraged last week to flat (neutral). The bulls remain fully long and fully leveraged this week, but in greater numbers.

This reading has me looking both ways as the jump in bullishness is big enough to see the market go the other way (market is currently down), but given this is smart money we could see a snap back rally after any short term weakness runs its course.

 

[coolhand]

This week's NAAIM reading sees the mean average dip more than 11 pts. This is not a big enough drop to take the reading out of last week's bullish posture, but it is a bit less bullish than it was. This is mainly because the bears, who were flat last week, are now fully short and fully leveraged. This reading suggests short term weakness before a likely resumption of the rally in the S&P 500.

 

[coolhand]

After seeing the bears take a leveraged position on the short side last week, we now know they likely picked up some decent gains on recent weakness. The latest NAAIM reading shows the bears are now flat. The NAAIM reading itself jumped higher almost 13 pts., which makes the reading very bullish. The bulls remain fully long and fully leveraged.

Now that the bears have gone flat, I suspect we may see the market turn back up before long.

 

[rangerray]

I think your suspicions were warranted.

 

[Boghie]

Question: How many of us caught this market boomlet?

 

[coolhand]

Latest NAAIM reading shows the mean average shedding about 5 pts. That does little to change the sentiment of this smart money as the reading remains very bullish. The bears were flat last week and they remain flat this week too. The bulls remain fully long and fully leveraged. I expect the market to continue to find ways to push higher.