Why I am so bearish on Crude Oil
Once again I am at odds with the public on something, not sure if I should be glad or worn out by bickering with people on things? This has no relation whatsoever to my view on the dollar.
If you look at this chart you can see clearly why I think we could see a large move down in the energy complex. First the commercials have a historic short position, along with that which is usually the case, the large speculators have a historic long position. The one important thing to look at with these, is where these levels relate to where price was the last time levels were close to this.
It is clear, especially with the Large Specs, that they appear to have maxed out their longs at a price level much below where it was the last time they had a position as heavily long as this. This becomes an issue of fuel. They are the trend drivers, and it appears they are on fumes here, yet price has a long ways to go to reach the old highs. Also the commercials big short position is at a level well below the last price level with an equivalent short position. This is exactly what we want to see to set up a sell signal.
Also, the seasonals as you can see have been very accurate in this market, and we are right at the time of the year where they call for a downward move. I am currently short Unleaded Gas, which in my view had the weakest short term chart of this complex, but any of these markets should have sell signals that work. No doubt stocks are effecting everything so if the stock rally continues it may abate this some. However, the fundamentals of this market are clearly telling us where to look.