Any U.S. government regulation of energy swaps is widely believed to likely take significant leverage and flexibility out of the crude oil market, and also drive crude oil futures prices lower, at least initially.
The bottom line for commodity futures traders and commodity stock investors is this: Any significant rules changes to trading commodity markets will be a decidedly bearish development that could produce price tops in many commodity markets.
If I were a big hedge fund manager that was right now holding a bunch of long crude oil futures contracts, or even other long commodity futures contracts, the rhetoric coming from Washington would have me at least a bit jittery, if not downright spooked.
P.S. Will you be there when Cramer makes his next move?
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Technical Analysis Deteriorating Technicals Suggest More Downside 5/23/2008 7:59 AM EDT With an increase in volume and trading range, a meaningful break south appears to have been made.
At time of publication, Wyckoff had no positions in the stocks mentioned, although positions may change at any time.
Jim Wyckoff is a senior market analyst for TradingEducation.com a free educational Web site. In addition, Wyckoff writes a blog offering current market commentaries every morning on TraderBlogs.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Wyckoff appreciates your feedback; click here to send him an email.
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