My 1st Million At 33 – yes, you can do it too

Volatility Index

VIX [ buythebottom.com/cot_charts/vix_cot_chart.html ]
It looks like commercials and large-traders are buyers of the VIX over the last few weeks, as small-traders are the sellers. This would indicate that there is a good possibility for the VIX to rally from the current lows in the near term…which would translate into lower prices for the stock market.

Broad Markets

Russell 2000 [ buythebottom.com/cot_charts/russell_2000_cot_chart.html ]
Commercials are very gradual sellers of the Russell 2000 over the last 5-6 months, which would probably imply that the RUT – under the current setup – will not fall apart just yet.

S&P 500 [ buythebottom.com/cot_charts/s&p_500_cot_chart.html ]
There has been a slight pick-up in commercial buying over the last several weeks, but nothing too significant that suggest that this market is setting up for a rally. In fact with the total net-commercial position is still under -40,000, which I would have to say is far from bullish.

NASDAQ 100 [ buythebottom.com/cot_charts/nasdaq_100_cot_chart.html ]
This market continues to look bearish from a COT perspective, as commercials are sellers of this market over the last couples of months. But also, notice on a price-chart how the NDX is not making new monthly-highs and diverging from the other indexes over the last few days. From where I am standing, this market remains setup for a decline, which may very well materialize in the not too distant future.

Dow Jones [ buythebottom.com/cot_charts/dow_jones_cot_chart.html ]
Commercials are big sellers, while large-traders are on the other side buying this market. Again, like with the Nasdaq 100, the setup is to the down-side.

In a nut-shell, it looks like the stock-market-bear is ready to wake up. For one, commercial distribution is starting to appear and is exemplified by the COT-charts for the NDX & INDU. Moreover, commercials are recent buyers of the VIX which means that volatility is probably right around the corner. It looks to me like the US stock market is in the works of putting in an intermediate-term top in the near future.

Commodities

Crude Oil [ buythebottom.com/cot_charts/crude_oil_cot_chart.html ]
The story with oil in the year 2007 could be summarized with one word: volatility. From a high of $64 in December of 2006, to a subsequent move down to the low $50s, and now back up near $60; all within a two month period. But what I find rather peculiar is that during this roller-coaster, COT data did not provide – from where I’m standing – too many clues before, during, and after these spikes in price.

I have a feeling that once we see a pull-back in this market, commercials will buy, and there will be a clear setup to the upside. Of course, this is just speculation until it is confirmed by future COT reports.

Gold [ buythebottom.com/cot_charts/gold_cot_chart.html ]
Commercials have been sellers in this market over the last few weeks, as the price of bullion rallied. With the current setup, I would look for the gold-rally to stall in the intermediate term. As of right now gold looks like it is setup to decline and test support at the $600 level. If that support-level is ever reached and broken, there is very strong support in the $570 area.

Currencies

US Dollar [ buythebottom.com/cot_charts/us_dollar_cot_chart.html ]
The dollar setup remains very much to the down-side. What I find bearish in the US dollar price-chart is its failure to move above the November breakdown area: around $85 – 85.5. This suggests that we will see a re-test of the December lows in the $82.5 range, and perhaps a break below that level to fresh new 52-week lows.