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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (14956)	6/4/2004 9:45:43 PM
From: jimsioi	Respond to of 110194

ild, shortcovering and falling OI, bullish?? What we essentially saw in the period ending on Tuesday last was the specs acting bullishly in a rising market, buying in short positions and the commercials selling out longs...This is the the reverse of what we have seen when open interest is rising and the market likewise....specs buying, adding to longs and commercials selling short...If the commercials had been buying and the specs selling I'd be impressed as it would show the supposedly better informed and better capitalized were acting bullishly...That was not the case. The commercials who had added longs when prices were recently low were taking the opportunity to liquidate into strength, while the SPECs were running from the market, covering on the price rise at at it's peak. The fall in open interest (particularily as it was by the various participants) in a rising market back to the 50 day moving average where price stalls and reverses is not in my opinion a sign of strength... These things are subject to interpretation...and correct conventional interpretation is not always right as to timing and positioning of market moves....Given the unknowns, the imponderables and outside influences either of us might be right....but that's not the way I'm going to bet..