How to gauge sentiment in commodities

Discussion in 'Psychology' started by jbtrader23, Oct 27, 2003.

  1. I've got access to Lexis Nexus and I'm wondering if there are any good daily periodicals that can gauge the general interest level of commodities? For example, Natural Gas went through the roof earlier this year hitting $10. It looks like a Nasdaq chart circa 1999. I want to find out what the specific mood was leading up to that mini bubble. I want to find specific quotes of people saying, "people are buying like there is no tomorrow", "natural gas will hit $15, etc".

    I read a Jim Rogers interview in which he said he went short bonds in June because there was panic buying in the market. I knew there was alot of buying, but how can you gauge specifically whether it is panic or hysteria or some other extreme emotion.
  2. jessie


    You might find COT (commitments of traders) reports useful for your purpose. They will tell you who is doing what, which is a pretty good indicator of the strength of the participants. For example, in the metals, it is not uncommon to see a huge small spec long position and a large short commercial position develop simultaneously. At that point, you will likely be looking at a drop soon, as the public buying money will eventually be depleted, and the commercials don't necessarily have to buy to cover their shorts, as they can deliver against them if they choose. The COT reports will tell you the balance of large specs/funds, small specs, and commercials/hedgers.
    Good Trading,