Biggest Net Short by Commercial in Recent Memory

[UrmaBlume 10]

Today's trade (09/01) recorded the biggest net short by commercials in recent memory.

 

We track daily net longs and shorts by commercials and today's trade showed a net short of 188,604 contracts. The closest we can find to that was a net short of 153,682 contracts which occurred on 2/10 this year amid all that frenzied selling right before the low in March of this year.

 

You can see a blow by blow of today's trade here.

 

 

This shot of the HUD which was taken less than 2 hours after the open reflects the selling which continued throughout the day.

 

Edited September 1, 2009 by UrmaBlume

[BlowFish 10]

This is misleading lingo UB. I presume you are actually tracking the imbalance in aggresive/passive (or patient/impatient) buyers/sellers? It is a complete fallacy to assume that just because someone sells aggressively.that they are opening a short position.

 

I am sure you know this, however you have a duty of care to your more naive readers! (actually you don't in the slightest but I am sure as a responsible poster you would not want them to go away with any misguided notions). For newer traders this sort of wrong thinking can cause no end of problems down the road.

 

Talking of naivety i think it is naive to assume that when the commercials are accumulating or distributing a large position they do so impatiently. Now whether cumulative contracts aggressively bought or sold is a good indicator of short term price movement is not what I am questioning. what I am questioning is whether you can assume that this represents short interest.

 

Of course if you have a way of getting real time open interest information from the exchange hats off to you!

[UrmaBlume 10]

This is misleading lingo UB. I presume you are actually tracking the imbalance in aggresive/passive (or patient/impatient) buyers/sellers? It is a complete fallacy to assume that just because someone sells aggressively.that they are opening a short position.I am sure you know this, however you have a duty of care to your more naive readers! (actually you don't in the slightest but I am sure as a responsible poster you would not want them to go away with any misguided notions). For newer traders this sort of wrong thinking can cause no end of problems down the road.Talking of naivety i think it is naive to assume that when the commercials are accumulating or distributing a large position they do so impatiently. Now whether cumulative contracts aggressively bought or sold is a good indicator of short term price movement is not what I am questioning. what I am questioning is whether you can assume that this represents short interest.Of course if you have a way of getting real time open interest information from the exchange hats off to you!

 

 

BlowFish,

 

While of course you are correct when you say "It is a complete fallacy to assume that just because someone sells aggressively.that they are opening a short position." I find the rest of your assumptions about this work a bit hasty. As to the naive reader it has never been our intent to craft our content for the lowest common denominator.

 

The indicator in the chart above is !!!!NNTLHHL, the NNT stands for Net New Trade and is indeed our calculation of net new positions by commercial traders this session.

 

Further our work in US and other markets shows that the portion of yesterday's massive selling in all US equity instruments that was NOT net new shorts was a significant, international relocation of equity assets. Further still our work indicates that this move was FROM US equities and while some of these equity assets went to Europe, specifically the DAX, most went to Japan.

 

We use one technology set to track net new trade, another to track commercial intent and intensity and still another to follow equity money around the world. Our charts speak to the efficacy of our concepts, methods and technologies.

 

cheers