Hedge Funds Sitting On The Sidelines This Winter

The hedge funds have remained surprisingly inactive over the past three weeks in the natural gas market which has experienced one of the most volatile starts to winter in history.

It might be that the funds over the past 2 years have "topped ticked" the market accumulating a record high speculative long position the very week the market topped.

Funds were record long 488,901 natural gas contracts on the February 2014 high.  As the market fell to a new low for 2014, the fund long position fell as low as 141,371 contracts two weeks ago.

The funds have been much more timid this year in attempting to play the winter price rally.  But over the past two weeks, fund have been lightly buying the market.

Friday's Commitment of Trader's report showed the funds long 147,520 contracts, up 1,936 from the previous week.

Overnight volatility in the natural gas market may be one primary reason the funds have been largely sitting on the sidelines this winter - no lasting trend and way too choppy to trade.