Let's review the last four months in the S&P COT reports. In the first box we see the commercials at historic long positions. Apparently the smart money thinks rate cuts are coming and they are going to fix what ails the market. In the second box we get the rate cut and it's bigger than expected. The market rallies big. Oh but what happens? Half those commercials sneak out the back door on the big pop. Apparently there is some really smart money that was just waiting for this move to unload their longs. Boy did they. After the second rate cut the commercials again added to longs briefly hoping finally for the market to rally. When it didn't they again quickly started to cut long positions drastically even selling into weakness. Then along comes Abu Dhabi and throws 7 billion at Citi. The market rallies and again some of the commercials jump on the long side hoping for an end to this mess. It's not to be as the market sells off hard on the next rate cut. By the next week the commercial long position has evaporated as they sell at all costs into extreme weakness. Now comes the Santa Clause rally. Is it the start of some thing big? Well apparently the big boys don't think so as they use this strength to dump a bunch more longs taking their net position into the negative for the first time in 7 and a half months. Unless something momentous happens it appears the commercials have decided that nothing the Fed or sovereign wealth funds can do will save this market. Now that's not to say the market can't rally from here. If it does though I expect the smart money to be selling heavily into that rally. And as long as the big boys are exiting then the market is going to be on borrowed time.