Did anyone read the August/Sept issue of Stock, Futures and Options? They had an interesting article in there about Philip Gotthelf and his world known Commodex Trading System which has been around since the 1950's in you can believe that. It is suppose to be the most profitable system of it's kind and it has certainly stood the test of time being around for half a century. The returns he claims to have gotten from the system seem to be a little hard to believe. Has anyone heard of this guy or his system and can back up what he says?
Never subscribed myself but have been aware of it for decades and still employ the theory which is quite simple and logical. In a nutshell: Open Interest, volume and price are the tools. Open interest- since opening a futures contract requires the margin $$ the total # of contracts gives us the amount of $$ coming into or going out of that futures mkt. Price- price reveals the direction that $$ is pushing the mkt. Volume- represents velocity of price change. Duh, how else would it be? They are neutral when their system can't get a read that turns them on. Open interest is published early in the a.m. for the previous day. It can be very revealing. If there's a big up day and the next a.m. your system shows considerably less O.I. you know they closed their longs and not to expect much more to the upside. If there follows a large vol day without much price movement and the next a.m. O.I. is way up you know they opened shorts into the retail buying because vol was up but not price, no velocity to vol at the turns. Of course we never know for sure but sometimes I pretend I do, I have to trust somebody.
Banjo: Read your comment regarding the Gotthelf system. You say that Open Interest is published "early in the am for the previous day". Do you have a preferred source, or do you get your O.I. data straight from the exchange?. Thanks, Steve46