This past week's Commitment of Traders report showed a significant jump in the number of Mini-S&P 500 Futures contracts being held long by the small speculator group.

Two weeks ago the group was net long 169,212 contracts, and this past week the number jumped to 223,872. This is the first time since mid-March that the group has been net long more than 200,000 contracts.

Conversely, the commercial hedger group saw their net short position increase to 233,968 contracts.

Sure there is cause and effect here, as the commercial hedgers usually run counter to what the small speculators are doing due to hedgers trying to remain market neutral to some degree.

The important thing is to take note of what happened when the small speculators were net long more than 300,000 contracts for a stretch of four weeks from mid-February through mid-March.

That stretch of overly bullish readings came just before the S&P 500 moved sideways in the latter half of March and then dropped 2.6 percent in the second week of April.

It is also worth noting that the commercial hedger group has 2,552,036 contracts held long and 2,786,004 short for the net short of 233,968 contracts. The small speculator group is long 491,702 and short 267,830 for the net long of 223,872 contracts.

While the net number of contracts might offset one another, they aren't exactly an apples-to-apples comparison as evidenced by the percentages — 65 percent of small speculators are bullish, while 52 percent of commercial hedgers are bearish.