COMMITMENT
OF TRADERS ANALYSIS
C.O.T. SAMPLE ONLY
| HEATING OIL:
Currently, the COT Report is signaling a buy in Heating Oil. Many of you reading this may
be wondering how in the world can we recommend buying heating oil? With OPEC increasing
their production and the Asian situation having a negative effect on demand, most people
would think that the prices of petroleum based products should continue to fall. And don't
forget about El Nino. With winter demand in the north being reduced due to the warm
temperatures, what could possibly drive the prices higher? Unfortunately, the stuff that we are hearing on the news and reading about in our
popular industry magazines is "old news." The market has already factored this
information into the price. There is no "edge" in trading from this information
... everybody knows about it. After all, if this information was relevant, then why are
the commercials accumulating near record long positions and the COT Index at 91.86
(signaling a buy)? |
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| The fact is we don't
know why. And obviously, no one else does either. But the commercials know. They know more
about the fundamentals than anybody else. And they are telling us that the current price
levels are very low and may not last much longer. We
are coming into a period where seasonally, the prices of heating oil bottom and continue
higher until summer and eventually through the fall. In addition to this, El Nino is
typically followed by "La Nina" where winters are traditionally much more
extreme. This means higher prices in heating oil. Maybe this is what the commercials see?
We will be watching heating oil closely for a change in trend. We will then give
recommendations accordingly. Until then stand aside. |
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| US T-BONDS:
For the past two months, the COT Report has been signaling a sell in US T-Bonds. This
tells us that the Commercials are expecting higher interest rates in the future. But wait
a minute...what about deflation? What about all of this talk about how the economy is
slowing down and interest rates should be cut? What about the Asian situation? With all of
this, interest rates can't rise...can they? You bet they can and they will. Right now, the
market is amidst a "tug-of -war" between the Commercials and the Large Commodity
Funds. And you know who wins...the Commercials. What
do the Commercials know that we don't? Possibly, the Asian situation wasn't as bad as we
thought. After all, they are going to receive billions in a bail-out plan to help their
economies. What do you think they are going to do with that money? That's right...spend
it! |
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Maybe weather events
across the world will send commodity prices higher thus exciting inflationary fears.
Whatever the Looking at the chart above, you will
notice we have penetrated a six month trend line. This is very critical. We will be
sending out specific recommendations this week. Stay tuned!
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| All aspects of any trade
recommendations contained in this report are subject to modification at any time. ANY STATEMENT OF FACTS HEREIN CONTAINED ARE DERIVED FROM SOURCES
BELIEVED TO BE RELIABLE, BUT ARE NOT GUARANTEED AS TO ACCURACY, NOR DO THEY PURPORT TO BE
COMPLETE. FUTURES TRADING DOES INVOLVE FINANCIAL RISK AND MAY NOT BE SUITABLE FOR ALL
INDIVIDUALS. PAST PERFORMANCE IS NO INDICATION OF FUTURE RESULTS.
Copyright © Apogee 1998- 2004 All rights reserved. |
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© 2004 Apogee
All Rights Reserved
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