S&P 500 Institutional Money Flow


S&P 500 cot

Long Term Captial Growth Strategy.

By using data from the COT Report - Commitments Of Traders, published weekly by the CFTC (Commodities Futures Trading Commission) one can track what the "Smart Money" (in this case, S&P 500 commercial futures traders) are doing and thus get clues about future direction of the S&P 500 market and then also... the stock market in general. The actions done by large commercial traders leads the market by about 3 weeks. By subtracting all S&P 500 Futures Short positions from Long positions one can find the current dominant force controlling the S&P stock market in any given week. With net positions going below 0, (more Short contracts than Longs) it shows that the Bears are taking control and would be a signal to Short the stock market. With net positions above 0, the Bulls are taking control.

By using this simple Long/Short strategy from 1986, let's say "spiders" (SPY - S&P 500 index tracking stock, born in 1996) started trading then, one would clearly beat the market. This can be documented by downloading the COT historical data from 1986 found at the CFTC site and compare it with weekly S&P 500 prices from 1986.

Although there is no guarantee this strategy will work for ever, the chart above should give good indications about what side of the S&P market it is wise to be on, because the "Smart Money" tend to be right about future market direction, as the COT - S&P 500 history from 1986 shows.

Commitments of Traders - Release Schedule Dates, 2002.

** NB. This is not a recommendation to trade futures.
The futures data above is only used as helpful information,
in an attempt to predict SPY index tracking stock or S&P 500 cash prices.**












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