Island Reversal forming on the OIH

Discussion in 'Trading' started by thehangingman, Jan 4, 2007.

  1. spinn


    Looks to me like OIH will go down another $10 to $120 or so.
    #11     Jan 4, 2007
  2. The price action over the last two days has been a little extreme, to say the least; the hedge fund theory looks good, and I have a few of my own, most which assume manipulation for one reaon or another" and also assume a move higher once the shakeout is over. This one is painful !

    Oil companies (at least the one I work at) say the sweet spot for oil is 55 bucks, and the new congress has it out for the subsidies. Is it possible prices are manipulated to help big oil ?

    Low oil traditionally inspires the overall market, which one could say is getting a bit stretched, going up pretty quickly, and maybe oil was dropped to "inspire" further record market highs

    It seems like many upward moves are preceded by a shakeout to blow stops. I can buy the fact that the traders watch the weather outside while ignoring blizzards for two weeks in a row that shut down a major airport and travel hub...unless it suits their purpose. Now, instead of "cold weather in midwest raises oil prices" we get reduced travel demand lowers oil prices.

    Last theory is that we are trying to "torture" OPEC with news of oversupply, and by setting prces low, they won't want to cut production because it will cut income, and they will have to drive their Mercedes 50,00 miles instead of buying a new one at the first oil change.

    I'm betting OPEC will take some action, and when everybody has some nice positions established in the energy industry, we'll see the traditional Nigerian Attack news and anticipated summer driving demand news starting to creep in. I can't think of a single time in the last few years that low Oil has not been a buying opportunity. BTW... the guy that heads up our Nigerian ops says there is violence there every day, and for some reason it's not being reported at the moment.

    #12     Jan 4, 2007
  3. Neet


    If the trend is our friend, oil will continue to go down.

    Some say Oil will hit the 40s, go figure.
    #13     Jan 4, 2007
  4. ess1096


    Is the US Northeast the only place on the planet that uses oil? You would think so based on the excuses all the CNBC brains have been giving for the decline. Unusually warm weather in the northeast.
    #14     Jan 4, 2007
  5. This has to be more related to the fed minutes. With the thought of slowing growth in the US, demand for distillates will decrease. My family is in construction in Vegas and there are no new projects being started, no mass grading. That spells, no demand for diesel. Put 2 and 2 together, oil is suffering.

    So, one fund starts selling, the others get wind and all of a sudden everyone's selling, guys like amarinth on full margin have to clear out their positions. So this sell off may continue especially if there's another hedge fund blowup.
    #15     Jan 4, 2007
  6. Boone Pickens expects average $70 oil in 2007. Would you bet against him?
    #16     Jan 5, 2007

  7. umm.....gee. Could it be that he was busy selling while talking up his book. Oh no! how immoral!

    A few more "down grades" and it'll be time to buy. It's called Churn and Burn the little guy. Rinse and repeat ad infinitum. :D

    <a href=""><img src="" border="0" alt="Image Hosted by" /></a>

    By the way, there's a new paradigm. Lower crude prices won't translate to lower gasoline prices.
    #17     Jan 5, 2007
  8. KenL


    I wouldn't try to pick the bottom, might get cut by the falling knife. Wait for the confirmation of a trend reversal.
    #18     Jan 5, 2007
  9. has an interesting take on this.

    #19     Jan 5, 2007
  10. Here we a few days, this is going to appear as the classic Island reversal on the charts. Im holding my breath on this call.

    If oil was to fail 55 dollar support, then its going to $33. Im not kidding...

    BTW, OPEC lied. Tanker count demonstrates that they are not making good on the cuts.
    #20     Jan 5, 2007