GKM

Where Does Oil Go from Here?

Let's look at a couple of the other extremes on the chart to see if hedge funds are truly contrarian indicators for nat gas's direction. In Jan/00 they were long and prices ran up. In Jan/03 they were long and prices rose. In Jan/04 they were short and prices fell. In Jan/07 they were long and prices ran up.

From this you conclude that because they are aggressively short that prices must rise? I think I'll stick with what the fast money is doing based on their track record. Trading is a zero sum game and someone else is equally as long - likely those with a worse track record.

John Arnold is one of those traders. He made over a billion in bonus when he blew Amaranth and Brian Hunter up because he was on the other side of the trade. Fast money is fast money for a reason and I wouldn't be standing in front of them on the off chance that they are wrong this time.