Market Curiosity: Exploring Markets And Systems

February 27, 2011

Crude and natural gas commercials and large traders are significantly past 5 year extremes

Filed under: Just Watching — Tags: , , , — Jeff Fitzmyers @ 9:29 pm

The commercials are about 150% as short as ever in the past 5 years. Rarely are commercials on the losing side of a major move. But when they are, they have to trade large and that can supposedly really move a market.

And natural gas is just the opposite. Definitely time to buy every dip (or sell puts). How far can the funds keep shorting? Price is about 37% away from the September 2009 low of about 2.50, and 250% away from the June 2008 high of about 13.50. Commercials are very long, and natty is near the price of production (and from what I hear, storage too).

References
+ UNG – time to sell some more puts (paper trade)
+ Bought March natural gas due to very long lower candle wick +0%
+ Sell UNG natural gas puts +17%

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