Monday, January 22, 2007

Mid Afternoon Update

Well the rise in crude was short lived. As mentioned in my comments section, indeed the large specs did remove themselves from 90% of their short positions last week. This is information that is readily available from the CFTC web site, though the person who really crunches these numbers and who makes it makes sense is Stephen Schork of the Schork Report. Total open interest, or even knowing total short interest isn't enough, it's also a game of understanding who's short, who was short, who has gone short, etc. I ended up shorting twice since the highs of the day, not wanting to let a good opportunity get away from me with my last fill was at $52.25. 1 profitable long trade this morning and 2 profitable short trades in one day is enough for me to call it day!

Stock market... still flirting with the lows du jour... interesting though that a variety of big banking names are higher ahead of earnings.. hmmm.


Anonymous said...

I tend to pay more attention to the commercail participants than the specs. The specs are mostly trend followers whereas the commercials are regression to the mean traders. The commercials however are producers and users of oil as opposed to a hedge fund looking at charts. I'm guessing that the oil people probably have a better grasp of the fundamentals of their business than a hedge fund. The commercials are the people who will turn a trend when their buying or selling gets to extreme levels.

Jim K said...

it's all interesting stuff. the decrease in length by the commercials at this time of year is usually associated with a build in inventories ahead of gasoline season... don't think that's a bearish bet, but a normal hedge. on the other hand, for the big specs to dump most of their short position has raised an eyebrow or two in circles well beyond my little blog trust me on that one. my point is to warn folks, and perhaps i didn't come out clearly enough, if we do go to 48 or 45 (and I don't rule it out)... it may be alot hard getting there than it was to go from 60 to 50. Everyone now assumes it's going to be a piece of cake to slide again below $50... that "everyone" syndrome always gets me on the defensive. By 'everyone" i mean certain mainstream media offenders, certain blogs that i read, etc.