Is OIL SERIOUSLY undervalued right now??

Discussion in 'Commodity Futures' started by orbit23, Oct 31, 2019.

  1. @orbit agreed. I closed out my long position. The historical data I look at says CL should be higher long term, but the correlation w ES is high, and my data for ES says market is going lower.
     
    #51     Nov 6, 2019
  2. orbit23

    orbit23

    I think it would be appropriate to get short somewhere areound those levels, maybe its topped already even.
     
    #52     Nov 12, 2019
    murray t turtle likes this.
  3. orbit23

    orbit23

    I think it will go higher. There was a nice short and a nice long to be had. I missed both. :banghead:

    In the end this will play out and all one should have been doing was sit back and trail the stop loss.
     
    #53     Nov 17, 2019
  4. bone

    bone

    Your premise on Oil is nothing more than a stock market proxy. Except that the US stock market has been setting historical highs and the oil market is far from historical highs as the world is awash in supply.

     
    Last edited: Nov 17, 2019
    #54     Nov 17, 2019
    murray t turtle likes this.
  5. orbit23

    orbit23

    Exactly. It was the proxy. The premise was the stocks were going to break up and if it's good for economy, it's good for oil. And the stocks were already taking off at the time while oil had not and it provided for a better risk to reward setup. I really love these kind of setups because the risk is very low, the odds of playing out are good and the upside is enormous. Don't get them often though :/


    Relative to the stocks(spx500 as benchmark), the oil has outperformed since the posting of this thread and it seems like it *could* continue to do so, if it breaks up. So don't see how the all time highs make any relevance.
    (USOIL/spx500USD chart, daily)
    [​IMG]

    Mind the fact though, i have little to no clue on the fundamentals. I don't know if oil is overvalued based on supply, idk what the hell is ARAMCO going to do, i know almost nothing about oil. I had the trade idea based only on the charts, and i read some things about oil every now and then, more than not by coincidence and i put all of it together to make a better story. I mean it made sense to me, and i looked at it as an additional confluence.
     
    #55     Nov 17, 2019
  6. orbit23

    orbit23

    Make or break for me here. Might be a good trade to just start buying at market as soon as the market opens comes monday.

    US is NET exporter of oil for the first time in decades. Pomp eet.
     
    #56     Nov 30, 2019
  7. FriskyCat

    FriskyCat

    $55 is/was a pretty tested line in the sand. I noticed it clipped it for a brief final spike lower on Friday before bouncing. Market traded like liquidity pulled for that almost comical half day binary move lower.
     
    #57     Dec 1, 2019
  8. Overnight

    Overnight

    The hell you say. CL has been bouncing between, on average, 52 and 58 for quite a while. The drop back to the median is an artifact of that range, or the news of OPEC skittishness? YOU decide. But don't you dare think that it is a TA move. It is pure fundamental.

    Your $55 line in the sand is the exact middle over the average range for quite a while.
     
    #58     Dec 1, 2019
  9. Specterx

    Specterx

    Don't mistake higher SPX for a strong global growth or final demand - it's not there, the world is increasingly zombified.

    Between fracking, OPEC members' dire need to pump every drop possible to meet their budgets, and the secular shift away from oil for transport for environmental reasons, the fundamental backdrop for oil looks terrible. At some point in the future, maybe under-investment will bite if the fracking industry dies or if electrification moves more slowly than expected. Until then I think one has to expect crude to stay broadly rangebound.
     
    #59     Dec 1, 2019
  10. FriskyCat

    FriskyCat

    Whatever you say, BOSS
     
    #60     Dec 1, 2019