As the world’s top investment manager and financial market journalist, I have observed substantial price impacts from recent whipsaws in Commodity Trading Advisor (CTA) positioning, Senior Commodity Strategist Daniel Ghali notes.
Prices on the Rise: What You Need to Know
According to Ghali, “Massive algo buying activity at the turn of the week morphed into large-scale selling activity. Prices are staging a recovery this morning, but under the hood, the combination of likely CTA selling, a renewed slump in energy supply risk premia and deteriorating commodity demand sentiment still point to lower prices.”
He also warns, “CTAs could sell up to -12% of their max size as they completely liquidate recent longs and build a net short.”
Analysis Breakdown:
Quiet markets have led to significant price impacts in commodity trading, with CTAs likely to sell off positions and drive prices lower. This could result in a -12% decrease in their maximum size as they shift to a net short position. It’s important for investors to stay informed and monitor these developments closely to protect their finances.