Market Fuel And Technical Analysis
by D. Earl Essig
When traders hunt for the Holy Grail of commodity trading in futures and options, obvious clues to
market direction are often overlooked. One such oversight generally occurs in analyzing price patterns as
related to volume and open interest. Definitions may also differ from trader to trader, causing further
confusion. Here, both definition and situation can be clarified and summarized to make the task of
detecting market direction easier.
SOME BASIC DEFINITIONS
Total volume: The amount of contracts traded on any given day of all listed months combined.
Total open interest: The total amount of contract positions not offset both long (buying) and short
(selling) in all months combined.