Friday, August 10, 2007
Not much change in anything this week. The commercials added a few shorts in the S&P contracts but more than made up for it in the combined contracts. All in all they added about 1.5 billion to the long side. It still appears that the big boys think this is a buying opportunity. There's been much discussion lately that the commercials are hiding their hedging in black pools. While I must admit it is possible I've also noted that the open interest hasn't declined in recent months. It would seem reasonable to expect that open interest would decline if the commercials were all of a sudden taking their business elsewhere. It doesn't seem reasonable either that they are spending billions in the futures markets just as a decoy to hide what they are doing somewhere else. All in all the most reasonable explanation is that nothing has changed and the big boys just think the global expansion is still intact despite the temporary problems in the credit markets.