Hi Fabio,

The correlation is a bit tricky to understand, I admit. You have to think of it this way, for example, I have said that Speculators are positively correlated with the Asset. This is because they are mainly trend-followers and with their huge positions, they actually more the market (They are the market), and therefore more speculators go with more demand and a higher asset price. Similarly, the hedgers are just covering because they fear a certain direction. If you are hedging your long positions, you would go short. Hedgers can be consumers (can be airlines that buy kerosene and go short to hedge) and can be producers (like soybean producers). When hedgers increase their longs, they are hedging their shorts and thus their fear is that the market goes down, therefore, due to their expertise in the field, market should go down.

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