Discussion in 'Commodity Futures' started by phm1, Nov 1, 2010.
Anyone know why crude is up so much today: short squeeze, fundamental data???
Players getting long into the 100 target...
Manufacturing numbers came in better than expected for the 5th report in a roll.
China is showing more strength in manufacturing as well..with her most recent number,
Dollar is weaking into QE2.
positions trying to catch the bottom of the next wave up.
Very helpful. Thank you!
Got it Picaso. Thank you.
My take is that it's a QE play: Not so sure the move will be up from here although that was my play today.
If you really want to broaden your views on "crude strength"; Recognize that you are talking about pricing which is nominated in $ but not necessarily transacted directly in $. The elevated $ pricing feels out of line. I haven't drilled into IAE; EID; fundamentals at this point. It's fair to recognize that there is probably more in the mix than a pure S/D picture.
The example that still rings in my mind is from the early 80's. Volker did a fantastic job steering more than just the US economy. He helped control the $ to insure an orderly exit from significant Petrodollar defaults in emerging markets. Here's some light reading for perspective via google:
Just like the Fed bailed out AIG which helped prevent significant banking failures in Europe, I suspect that the $ is being positioned to help maintain the viability of Middle Eastern economies who over built and over leveraged just like the rest of us. At the end of the day there is an understanding that oil producers have to remain in business. There is likely significant OPEC quota violation at this point to generate revenue to repair middle eastern economies.
I'm not a conspiracy theorist in any way shape or form. But I do have to say that the world is no where near as simple as we are typically lead to believe....
Best to All,
And the play is?
Crude Oil with another sell off here even after API reports came out with again bullish sentiment, a draw of 7.7 million barrels. Energies, "fell for a fourth day as speculation that fuel demand will drop on China's steps to cool its economy outweighed signs that U.S. consumption is rising." (1) Crude fell to $81.20 overnight, "after Chinese Premier said the government was drafting measures to counter inflation in the world's biggest energy consumer. Prices also fell on concern Europe's debt crisis is worsening as ministers considered a rescue package for Irish banks." (1) The S&P was +4.75 coming back from an overnight sell off and the Euro/USD was higher by 25 points as well above $1.3510 but it seems the oil markets are still lagging behind as Crude below $82.00 right now. I believe today is the day to try to profit take and buy Crude in and below the $82 level as prices have come down almost $7 in one week, signaling a temporary bounce. This has been a healthy pullback the last few days and I believe $80 will be held in the coming days.
Not much talk happening in Natural Gas as Dec flatprice hangs around $3.85. It has been a dog in recent weeks but this market has really done nothing the last week. Suggestion is to wait until inventory reports come out this Thursday but technically I would be a buyer at $3.70. After the Dec contract expires Jan will be a bit more active as the market will be in the heart of the winter season.
Crude Oil futures are highly correlated with a few other choice products outside the energy space. You can make your dough spread trading intra-market, or take flat price directional queues off the relationships.
I think it's a tough scalp based only on technicals without a very wide stop-loss trigger - it's a 30% vol instrument.
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