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How You Can Profit From The Doha Meeting

In a forex dealing room, where I got my start and my training, talking your book is a time honored tradition. In its simplest form it consists of simply telling everybody you can find that “…this thing looks bid to me” if you are long or, if you are short, that “…the bottom’s about to fall out of this”. The practice has been around forever, but has limited use as everybody in the market assumes that everybody else is talking their book whenever they offer an opinion. Far more effective in many cases is to start a rumor and watch it take hold.

Traders simply identify another of their kind who cannot keep something to themselves and then tell them about some huge order about to be filled, or that they have heard that the jobs number, GDP data, central bank decision or whatever is going to be sensational in one direction or another, and, of course, to keep that information to themselves. A game of Chinese whispers then usually ensues, with the end product being an anonymous, exaggerated version of the original story. I have no evidence that the rumors that have been swirling around about this weekend’s OPEC meeting started like that, but it certainly smells that way.

We have witnessed a run up in WTI from around $35 to around $42 over the last week or so. That 20 percent jump in prices came despite ample evidence that supply is still outstripping demand and the beginnings of a bounce back in the dollar, two fundamental…

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