crude oil

What are hedge funds telling us?

Is hedge fund positioning a forward looking indicator ... or, rather, a contrarian indicator? Bullish bets proved to be a good contrarian indicator for crude prices this year. A case could also be made to bet against the increased long interest of speculators in silver. But it probably makes more sense to bet against long interest in crude oil. And perhaps it also makes better sense to bet against the specs in copper ... 

Commodities Essential. 17 August 2012

Trade Essentials.

No new recommendations or adjustments at this time.

Charts

The European Central Bank seemed to have disappointed investors yesterday after a lack of action sent markets reeling. The July US Nonfarm payrolls were reported better than expected today, which has so far sent markets soaring. With no clear advantage to the bulls or bears right now, I think it makes sense to sit tight. Here is what I'm looking at for commodities: 

Commodities Essential. 3 August 2012

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No new recommendations or adjustments at this time.

Alert: crude oil's bearish fundamentals ready to take over again.

Let's use DTO to play for another move lower in crude oil.

Geopolitics are back on the radar screen, but it seems to me the fundamentals are set to drive crude oil prices lower still. 

While the last few sessions of price action have been dramatic, much of it appears due to a short squeeze after speculators became overly confident in the bearish direction for crude.

But with much of that squeeze over ... and much of the geopolitical squabbling looking like old news ... it seems now is a good time to get positioned for crude oil to make a fall towards $70.

I am recommending you use the PowerShares DB Crude Double Short ETN (DTO)

Trade Essentials.

Here is what I suggest you consider doing now:

DTO (Last price: $49.40)

BUY shares of PowerShares DB Crude Oil Double Short ETN, symbol DTO, at the market. Then place an order to SELL ALL your shares of PowerShares DB Crude Oil Double Short ETN, symbol DTO, at $38.90, STOP; this order is good till cancelled.

[Note: for those who prefer not to use leveraged or inverse ETFs, consider selling short shares of the United States Crude Oil Fund (symbol USO) with a stop-loss around $39.00 or so.)