Sees $40 as the absolute floor price, current prices not sustainable in the long term. Expects attractive trading opportunities in 2015. http://www.bloomberg.com/news/2015-...l?hootPostID=928955f0862faded20b5a4811dae89e2
Everyday I'm expecting a short squeeze rally in CL that never happens. Watching the PA tick by tick, and it should be relatively easy to spot when it does happen.
I'm sure you'll see quite a bit of spec short covering at $40, some support, commercial users buying even more strips and even a modest correction for a period of time. But my own personal past commercial and HF experiences in the energy markets has led me to the "path of pain" theorem when it comes to energy markets in particular. There will be a point in time where the really big swinging dicks will make a sustained effort to drive and settle the market under $40 and into the 38 handle hunting stop sell orders. Because it's a free put. The more time we spend trading the $40 price handle, the more accepted the valuation becomes and reality sets in. Today's pop is well within the longer term trendline established in July, and well within the confines of the daily historical vol and atr metrics we've seen since late November. When in doubt, look at the longer term timeframes. All you'll see are lower lows and lower highs on both the Daily and Weekly. Corrections are modest, shallow, and quickly taken out lower. Order flow watchers will see sustained footprints of bids getting hit. I'm a spread trader, and I have no earthly idea of where oil is going to be priced 5 minutes or 5 days or 5 weeks or 5 months from now. But energy is a humbling and cruel market space. And things are worth what people are willing to pay for them, and if you as an independent speculator get opinionated or gain an ounce of hubris - you are setting yourself up to get eviscerated.