Monday, 21 January 2008

New Crude Oil Setup: Still Bullish

Markets getting the crap kicked out of them today in Toronto and Europe. Wow. Just checking in to report I've further refined my crude oil trading setup based on the Commitments of Traders reports. The new setup fades the "dumb money" large speculators when their net futures and options position hits specific extremes of bullishness and bearishness as a percentage of the total open interest, as reported weekly by the Commodity Futures Trading Commission. The latest COTs report from Friday shows the large specs - these are the big investment firms and hedge funds - slightly reducing their net long futures and options position. They've now got a fairly strong bearish bias in comparison with their recent trading positions. The setup has been bullish since the Sept. 25 COTs report. See the details of this setup on my Latest Signals page. Thanks again to Dave for testing a few million setups to help us narrow down the best ones!

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