It could be that the big increase in open interest in oil in
2008, much of it by funds/speculators, was just a
narrower version of what's happened in many more commodities since
2009 and especially in the past few quarters. In other words, the
outsized spike in oil then may be comparable to many more
big spikes now in metals, grains, cotton, oil, etc. There has
been steadily increasing participation across the whole
spectrum over the past two years, with pensions, hedge funds, etc.
all allocating more to the space. It's probably good to keep in
mind that correlations between equities and commodities were very
high in the crash. If risk trades come off again in a big
way, it will probably cut across the same classes
again. The $, Treasuries and Managed Futures were the winners.
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crude should be at 200
why is gold at new highs and crude oil still ...
Posted by admagazu on 1st of Mar 2011 at 04:44 pm
crude should be at 200 already the way i see things..the fact that its not is a red flag for gold and oil bulls
Possible adjustment for broadly increased speculative trading
Posted by lessarda on 1st of Mar 2011 at 05:09 pm
It could be that the big increase in open interest in oil in 2008, much of it by funds/speculators, was just a narrower version of what's happened in many more commodities since 2009 and especially in the past few quarters. In other words, the outsized spike in oil then may be comparable to many more big spikes now in metals, grains, cotton, oil, etc. There has been steadily increasing participation across the whole spectrum over the past two years, with pensions, hedge funds, etc. all allocating more to the space. It's probably good to keep in mind that correlations between equities and commodities were very high in the crash. If risk trades come off again in a big way, it will probably cut across the same classes again. The $, Treasuries and Managed Futures were the winners.