Classic Reversal: A Double Bottom
by Thom Hartle
The major commercial interests are involved in markets as a business. Large amounts of money are
committed to managing the risk that is faced by these companies. Companies on the cash side of markets
will use futures to enhance positions with leverage or to protect themselves from adverse price
movement. Decisions are based on extensive fundamental and technical research. The size of the
positions assumed by these players will be revealed by trading volume seen on each day's activity.
One facet of technical analysis is that the large professional (and very knowledgeable) trader in any
market cannot help leaving behind evidence regarding his or her opinion on the direction of the market.
You can infer what the commercials are doing by following the price charts along with the volume.