We posted a trade recommendation to go long crude oil based on building commercial trader positions heading into the seasonally strongest time of year. When we posted the trade in early July, we stated that, “It’s quite clear that commercial hedgers were buyers of crude oil between $70 and $78 per barrel throughout the month of May. This was the accumulation stage.
If the pattern holds true, we’ll see commercial hedgers sell off their stock as the market moves back near and through the $80 highs. This is the distribution phase.” This is the chart we posted.
This morning, we posted the sell side of this trade. It’s become quite clear that commercial traders are in fact, divesting themselves of their long positions. They have exerted enough selling pressure to turn commercial momentum negative, ahead of this market’s peak. Friday’s market action created the sell signal we have been waiting for.
Please call with any questions.
Andy Waldock
866-990-0777
