Last Friday’s Commitment of Traders report showed that large speculators are the most bullish they have been since March.

The net long position of 230,000 contracts represents a bullish percentage of 73 percent.

In March, the net long position was coming off the past year’s high of over 250,000 contracts, and the price of oil was coming off an annual high of $110 a barrel.

I would also like to remind you that in March, the Chinese economy was growing at a faster pace than what we are seeing now.

It’s worth noting too that in March, the price of oil had reached overbought levels based on the weekly slow stochastic readings, and we are looking at a similar circumstance now.

The $100 level served as resistance last summer before the price fell to $77.50 a barrel and reached an oversold level.

After pulling back from the high in February, the $77.50 level acted as support again in June.

There are two possible factors working here. First, the seasonality of oil demand falling as the summer driving season comes to an end. Second, the round numbers seem to be working as psychological support and resistance levels.

With Tropical Storm/Hurricane Isaac heading into the Gulf of Mexico, some investors may have been bidding up the price of oil. Now that the storm is weaker than expected at this point, we could see some selling in the coming weeks.