We looked at the recent commercial buying in the US Dollar Index on Monday, noting that, “Even though commercial traders remain heavily net short, their recent purchases have been strong enough to shift their momentum back to the positive side.” We also looked at technical support that has been tested and held, throughout this week.
You can find the full piece featured at TraderPlanet.
Tuesday was probably our best call. Equities.com featured our crude oil analysis in, “Crude Oil Spike is a Selling Opportunity.” We stated that, “our simple take on the way these usually work is that we’ll get one more spike of some type above the recent congestion that has built up. This morning’s trade near $61 is the spike we’ve been waiting on. ”
The market peaked Wednesday around $62.50 and has quickly fallen back near $58 per barrel.
We went macro with our own piece again this week as a follow up to, “The Interest Rate Conundrum” of two weeks ago. Originally, we focused on the world’s central bankers and the recent International Monetary Fund meeting in Washington. Their primary purpose was to discuss what it would take to US and global interest rates to rise and when. Apparently, Bill Gross had the answer and the markets listened in a BIG way. Even if interest rates aren’t your topic, the swings on the charts I posted are truly dramatic.
The crude oil market is dominated by the global commercial traders. Their collective actions within the marketplace reflect the most thoroughly researched best guess consensus of future prices. We follow their actions through the Commodity Futures Exchange Commission’s (CFTC) weekly Commitment of Traders (COT) report. There are two things we’ve learned; they have better access to better information and they believe the crude oil rally above $60 per barrel is one to be sold.