Over the years, I have watched the Commitment of Traders reports rather closely. One observation that stands out is that large speculators and commercial hedgers are rarely on the same side of the fence when it comes to being bullish or bearish.

If the large speculators are bullish, commercial hedgers are almost always bearish. This stands to reason as the commercial hedgers also serve as market makers and sometimes take a position to create a market for the large speculators.

With this tendency in mind, I was surprised when I looked at this week’s report for the mini Nasdaq 100 futures. Large speculators and commercial hedgers are both net long.

The large speculators positions show 67 percent of the open interest is on the bullish side while 52 percent of the commercial hedger positions are in the bullish camp.

The bearish side of these trades is being held by small speculators with 80 percent of the contracts being held by short sellers. The group has built the biggest net short position of the past year with over 63,000 contracts net short.

This suggests that we could see a rally in the Nasdaq soon. The large speculators and the commercial hedgers generally tend to win out over the small speculators.