Big Brother Forces You to Report if You Have 100 of These

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Big Brother Forces You to Report if You Have 100 of These

Personally, I’m an advocate for privacy.

I don’t think grannies should be getting pat downs at airports.

The NSA should not be spying on its own people.

Yet when it comes to position limits and reporting in the markets, I’m all for it.

For example, the futures market offers traders massive leverage.

It’s not that hard for a single group to corner the market with a few billion dollars (like the Hunt brothers did in 1980 with silver).

That’s why the government imposes strict position limits in leveraged products like S&P 500 index futures.

The current limit is 140,000 contracts in the emini S&P 500 (when I say “contracts”, think of them as shares).

At today’s prices, that would give you control of $15.2 billion worth of stocks.

To put things in perspective (because talking in billions is pretty dang weird), that’s about what it would cost to build Trump’s 1000-mile wall.

Here’s where things get really interesting.

The government forces you to report your holdings to them if you have 100+ emini contracts (about $10.8 million worth).

The NASDAQ 100 reporting level is only 25 contracts (or $2.4 million).

Why bring even bring this up?

Because one reporting level makes the stock market predictable, and the other doesn’t!

If only I could get the CFTC to tweak their reporting level algorithm, I would likely be able to predict – with a high degree of accuracy – whether gold is a buy or sell…

…or currencies, soy beans, crude oil, the list goes on.

In fact, I’ve seen others try to use the CFTC’s data to predict every market they track.

Over the years, four books have been written on the subject.

They all got it wrong.

They missed something very subtle that is the very difference between making a market predictable vs. not predictable.

Useful vs. useless.

Cash cow vs. cash poor.

There’s a reason I decided to hyper-focus on the stock market all those years ago.

It’s the most predictable!

And we have the U.S. government and their 100 contracts forced reporting to thank for it.

That’s what I think of every time I write a check to pay taxes…it puts me in a better mood.

Trade smart,

Dan “Prince of Proof” Murphy

Note: Using the CFTC's data to time the market is the difference between a 640% gain and a 5,658% gain…with half the risk. Which would you rather have?

If you wish to learn more about timing the stock market with the government's COT report, then take a look at this video to learn more >>

The most volatile months (September and October) are here so don't delay.

 

 

 

 

 

 

 
 
 
Government required disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.