Learn to Day-Trade the Emini S&P Futures
menu

Open Interest Commentary 4/2/12

[11:57] R: open interest update for Friday: ES – declined  20,509 on the price increase indicates long liquidation after 3 days of new shorts.  The longs were yielding.  Today with the price increase the shorts that entered the last 3 days are being tested.  This is evidence of what you say many times, TraderShark, the market tries to get you into bad positions and out of good positions.  The overall trend continues to be up but at the higher prices traders with longs are showing nervousness.  6E – OI declined 1,510 as OI decreased for the 3rd day in a row.  Indicating on the price increase that shorts were exiting.  we have seen both lo0ngs and shorts exit the market over the last 3 days, which indicates that traders are showing uncertainty about holding 6E positions.  Hard to read more into this that my statement.  In general, when prices move either up or down and OI decreases, this indicates a less powerful move than if OI had increased with the price action.  The reason for this is that traders are

[12:00] RG: taking capital out of the market, as compared to open interest increasing with price action which indicates traders committing to the market in a belief that prices will continue in the same direction which is a stronger impact or statement than when they reduce positions.