Historically, commercials have often been viewed as the savviest operators in many futures and options markets because of their intimate knowledge of the "physical" side of their businesses and their access to first-hand knowledge of supply and demand fundamentals. In contrast, small speculators, like their counterparts in the stock market, have generally been seen as the group with the poorest track record when it comes to anticipating future price trends.

Large speculators, such as hedge funds and commodity trading advisors (CTAs), have found themselves on both sides of the divide as far as their apparent predictive powers go. In some markets, this group seems to be correctly positioned more than half the time, while in others their aggregate track record leaves something to be desired. When it comes to the Nasdaq 100 Index futures, recent history suggests that large speculators become bullish as a group just as an uptrend is nearing its zenith and vice versa.

Based on the latest COT data, large speculators -- hedge funds and CTAs -- are now net long for the first time in five months. Under the circumstances, this may be yet one more sign, along with narrowing breadth, over-extended momentum, and a smattering of disappointing earnings results from leading industry bellwethers, as I noted last week in NASDAQ: Seasonals, earnings, technicals -- a near term negative? that the technology-laden index is poised for at least a short-term correction.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.