In the Crude Oil futures I mean.
Yes, I'm loaded to the gills in energy equities, so I have more than a passing interest in this week's report.
I'm referring to the Commitments of Futures Traders report that shows the positions held in Crude futures by Commercial Hedgers. They are the so-called smart money, the big, deep-pocketed end users/producers of oil.
For instance -- Integrated oil companies, refiners, drillers. ExxonMobil. ConocoPhillips. Valero. Transocean, Etc.
Now here's what interesting -- after months of ramping up long positions in Crude futures, they have been net short for 6 straight weeks. Not only that, they are now net short 50,593 contracts, the highest level of shorting since June of last year.
Ok, then who is net long on the other side of this trade? Answer: Large Speculative Traders (commodity funds/hedge funds) and Small Traders (your local dentist who trades on the side).
The Large Specs tend to be black-box trend-followers from the Richard Dennis school, and they are now at their highest net long level since March of last year.
The Small Traders are at their highest net long positioning in two years. And that makes me perspire. I've mentioned it before, but I'll say it again -- in the long run, fade the small fish in the pirana pool.
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