AAH THOSE EVIL SPECULATORS, OFF
WITH THEIR HEADS!
The cry rings out now, those evil speculators...... Of course liberals by and large want to eliminate trading entirely so everyone who is able to make a living for themselves doing that would be reliant upon the socialization agenda they propose. They cite situations like this as a reason why speculating is so harmful. They blame the whole run up in the price of Crude on speculators. In this case as you can see they are correct. The commercials have by far their largest net short position of all time, Large Speculators, their largest long. The Small Specs are also very bullish here.
As I stated in a post recently, this is a recipe for a false breakout, and it appears from what I can tell, that is exactly what we have gotten. Everyone remembers the huge run up to $140 in Crude, that was followed by a quick trip to $33. One of the things that was never really publicly revealed about that run up, was the mis-classification by the CFTC of large commodity funds as commercials, which allowed unlimited position sizes for Speculators. The large funds were able to pile on in an unlimited fashion, then ran for the hills just as quickly, and poof $140 to $33. So the net of that fiasco, was it was the governments fault, yet they cried out against the speculators. Maybe it was a ruse, like accusing someone else of farting when you did it, to deflect the attention away from the real culprit. Yes in that case the Speculators took advantage, but that is what most would do. They were given a rare opportunity within the law to make money, and they took advantage of it.
In this instance, I have no way of knowing if anything like that is going on, but what is obvious is that the hedgers are selling this with both hands, and the speculators are buying with both hands. If you look at how far below the old highs we are and take into account that the Large Speculators are at their largest long ever, you could conclude they don't have much buying power left. They do have the ability to pyramid, using open profits, but I would say that is about exhausted here.We should have been at new all times highs with this large of a long position with them. This tells me the steam is running out and we could have a very sharp reversal here.
Look to short the energies over the next couple of weeks on a bounce, it could be a big trade.
I would also say that almost across the board that should be the strategy, sell bounces, we have trend changes setting up here. The Stock Market is rolling over here, the Dollar is strengthening, currencies weakening, energies weakening. Opportunities are plentiful here so go get your piece.
The Robbins update on PNJ Advisors, is that we are tied for 5th at 17.6%. This is not an earth shattering performance in all honesty, but it still is on track for a good annual return, and it is a year long contest. Also keep in mind we are trading this account just the way we will trade our fund, so we are risking very small percentages on the trades. As a result many trades we do in our personal accounts have too much risk and we don't do them in the contest account. Many of the metals trades have such big stops they are beyond the risk parameters of 2% we are using in the contest account. We have personally taken those trades and done well on them, but they have not been done in the contest account unfortunately, which has lowered our return substantially.
The markets with all the manipulation by the PPT have been treacherous this year so far, anything above zero is good trading. We have had so much choppy price action, it has been very tricky. We have traded the account probably a bit too conservatively for part of this year, and missed a couple of good trades. When you trade for all to see, trust me the game changes. You always fear being a dumb ass in the eyes of people evaluating you. You pass on some trades you should not, and you manage some too closely. It is not all a bed of roses being out there for public consumption. However, it is the road we have chosen, so I will keep readers updated on how we are doing. I do feel very good about that current return, many good traders are losing money this year so far.
Anyone who can consistently make good returns in a contest account is an excellent trader.
Good Trading to everyone