S&P 500 Smart Money Sentiment 9/10/20 – Smart Money vs Dumb Money

The Commitments of Traders (COT) is a weekly market report issued by the Commodity Futures Trading Commission (CFTC) listing the positions held by commercial traders and the “Smart Money”, the hedge funds and bank institutions in various futures markets in the United States. Since the COT measures the net long and short positions held by speculative traders and commercial traders, it is a great resource to gauge sentiment in the Markets.

In recent days after the correction last week in the equity markets, I was assessing whether I want to continue swing trading long positions. However, I'm going to do what the wealthy are doing, which was confirmed by what the Smart Money is doing at this time.

https://www.marketwatch.com/story/these-superrich-investors-just-raised-cash-to-record-levels-to-hedge-against-the-greatest-period-of-unknown-2020-08-26?siteid=yhoof2&yptr=yahoo

https://finance.yahoo.com/m/1b96c4d4-dc7c-38f2-a20f-329bad76f618/these-superrich-investors.html

https://hive.blog/hive-167922/@rollandthomas/s-and-p-500-smart-money-sentiment-6-22-20-smart-money-the-most-short-in-9-years

MY TRADING METHODOLOGY IN A NUTSHELL BELOW

I’m a supply and demand trader. The premise of supply and demand trading is when the market makes a sharp move up or down the large institutions i.e banks/hedge funds are not able to get their entire trade placed into the market, leaving pending orders to buy or sell at the zone with the expectation the market will return to the zone and the rest of their trading position will be filled.

I use multiple time frame (MTF) analysis to improve my discretionary trading decisions. MTF analysis involves analyzing the same asset on multiple time frames. The rule of thumb when using MFT is you want your charts to scale down/up by 4X – 6X. In my case I tend to look at:

Monthly Charts (curve time frame) – which represents that jet fighter flying over the football stadium.
Weekly Charts (trend time frame) – which represents the concession stands looking down at the field.
Daily Charts (entry time frame) – which represents being on the football field with the player.
4 Hr Charts (entry time frame) – which represents the center hiking the ball to the quarterback.