Smart Money Is Repositioning

Summary

• I track institutional 'smart money' moves because they often act on new information before the crowd, offering valuable market signals.
• The CFTC's Commitment of Traders (COT) data helps me monitor positions of commercial entities and money managers in futures markets.
• Currently, crude oil prices are depressed due to high US production and increased OPEC+ output, leading to oversupply. Asset managers have fully abandoned their long positions.
• There is no consensus on the S&P 500, and traders of different contexts like asset managers, leveraged money, and commercial dealers are all holding very different positions.
• However, their trends can be very telling and offer insight into how "smart money" is repositioning.

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Introduction

I like following the moves of "smart money," or institutional traders. While they often can be caught chasing trends or making false assumptions en masse (Bernanke says "Subprime is contained," QE will cause hyperinflation, re-opening stocks will fuel post-COVID markets instead of tech, etc.), they are also often

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.