Sunday, May 9, 2010

Natural Gas

The media talks, often incorrectly with gold and US dollar, about "crowded" trades. The term crowded implies too many bulls or bears.

Natural gas has become a statistically crowded trade. Speculators, both funds and retail, are extremely short. This is reflected by readings below 20%. Commercial traders, however, are quietly offsetting the statistical pessimism with aggressive buying. This is reflected by individual and cumulative readings above 80%.

COT Money Flow Table:


As long as money flows into a crowded trade by connected money, it has the potential to do something opposite of the general expectations. That would be rally in the case of natural gas.

0 comments:

Post a Comment