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Here Are Two Incredibly Frightening Charts

Today King World News wanted to share with its global readers two absolutely frightening charts (see below). KWN also reached out to Bill Fleckenstein, President of Fleckenstein Capital, and 20-year veteran Jason Goepfert, President & CEO of Sundial Capital Research, to get their thoughts on these troubling charts.

King World News received exclusive permission from SentimenTrader to reproduce the charts shown below.

Fleckenstein warned, “Maybe there will be a problem with the fiscal cliff, Iran and Israel or Europe? Who knows? The bottom line is these are some pretty chunky numbers on the short side for the commercials. They are very extreme.

I haven’t seen this, certainly not anywhere else.....

Continue reading the Fleckenstein & Goepfert interviews below...

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“Jason (Goepfert) does an incredible job with this type of work.

It’s pretty interesting because generally the commercials tend to get it right. They have a pretty good track record. It’s certainly pause for concern. So far the bits of bad pre-announcements we’ve had hasn’t mattered that much. But you have to see if the other major indicators are lined up in a bearish fashion.

Maybe this will be one of those deals where the stock market acts like it’s bullet-proof, but then one week it won’t be and stocks will get the daylights beat out of them. It’s very interesting that these guys are as short as they are. Maybe we are staring at another nasty October.”

Jason Goepfert, Fonder of SentimenTrader and Sundial Capital Research: “These charts show the net position of commercial hedgers in DJIA and Nasdaq 100 futures. That includes long minus short positions, for both the full contract and the e-mini, and calculates the approximate dollar amount based on the contracts' values.

For those two contracts, these very large traders tend to be the ‘smart money.’ They use the futures market to hedge, which means that we normally see them increasing long positions as the market declines, and short positions as the market rallies. It is when those positions reach an extreme that we really pay attention.

The fact that hedgers are at a record net short position across the major equity indexes (including S&P 500, DJIA, Nasdaq 100 and Russell 2000), with an approximate value of $51 billion net short, is worrisome to us. By contrast, this same group of traders was net long $58 billion worth of those contracts one year ago.”

I would just add to this that Investors Intelligence has been reporting the spread between the bulls and bears is nearing the critical 30% level. So there is a great deal of complacency in this market. The markets may continue heading higher, but readers need to be aware that something may be in front of us which will dislodge the bullishness and send the markets tumbling, perhaps an October surprise.

Thank you once again to Jason Goepfert for exclusively allowing KWN to republish the above charts.

The interviews with Michael Pento, Don Coxe, Pierre Lassonde, Rick Rule, and Nigel Farage are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included, Ben Davies, Dr. Keith Barron, Jean-Marie Eveillard, Bill Fleckenstein, Egon von Greyerz, and Felix Zulauf by CLICKING HERE.

Eric King

KingWorldNews.com

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