Saturday, March 29, 2008

Dump Commodities

That's what Barron's opines this weekend, not that I have ever once listened to anything the paper has to say. Don't get me started, but $5 bucks to read what Abbey Joseph Cohen has to say is $5 too much. The gist of the article however highlights something that I talked about in my March 15 post regarding oil. I posted my oil trader buddy's e-mail, stating that non-commercial entities(dumb money) were very long oil futures. I mentioned that based on this, I was going short USO and caught an 11 point move down in the price of oil in about a week and a half. Bottom line the speculators were gunning the market higher.

To give you an idea of how serious the problem is, ETF'S, commodity pools and mutual funds(non-commercial) account for about 60% of all bullish commodity positions BUT looking at the smart money,farmers and folks who actually use the physical commodity, well, they have a net commercial short position about 30% higher than a previous record. I still don't think the sector has even started to unwind yet

STILL SHORT - USO,GLD,PCU- will look to add XME next week


Market Monk said...

Great job catching that sell off!

BUY ON THE DIP said...

nice site!

Short , buy puts, sell ...

Do something

About Me

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I am a former hedge fund manager, broker and capital markets dude who now trades for his own account. I love what I do. I will try to post some stocks and an occasional chart that looks attractive for entry.I will also try to point out the idiocy of conventional wisdom and the lack of value added by the mainstream financial media. These postings should not be viewed as recommendations.