Lower highs and lower lows are a commonly recognized footprint of a bear market. COT money flows, however, are not consistent with a setup of a bear market. Connected money continues to aggressively buy the decline since early July. The money setup reflects bullish rather than bearish inflows into the Nasdaq.
Nasdaq 100 and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
This optimism has been met with aggressive selling by retail investors. History suggests that retail investors tend to go all in at the wrong times. In other words, they are bad market timers.
Nasdaq 100 and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:
A similar technical and money flow setup is developing in the S&P 500.
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