Get ready for a much bigger oil shock

So what's the biggest trade in the markets right now?

Could it be the one way bet on European fixed income with Draghi's massive bond-buying program set to obliterate anyone who challenges ludicrously low bond yields? Or the tech bull position with the Nasdaq around year-2000 highs?

For now let's ignore the collapse in euro zone yield and the nose-bleeding valuations in tech and concentrate on my favourite trade - the brutal battle being fought in the oil market.

Last week, InterContinental Exchange revealed that the hedge-betters and speculators were piling into the oil trade in levels not seen since the middle of last year. You remember the middle of last year, that was when crude was still at $110 per barrel, pretty much double where it is now. So are we setting ourselves up for another massive bout of volatility after a few weeks of relatively calm price action?

The longs are out in force, according to the data but are they too early in calling an end to the oil price rout?

Brent may have had a fantastic rally in February, having plummeted to the low $40s region after last year's rout. But was that a dead cat bounce ignoring the still dreadful near term fundamentals?

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