Oil beginning to threaten SIFs

Discussion in 'Index Futures' started by nitro, Jul 6, 2007.

  1. nitro


    The Dec contract at expiration is into the nothern hemisphere winter. How about the Nov contract.

    #41     Aug 22, 2007
  2. dhpar


    my position is in Dec (largely because I am lazy and do not want to roll every month - haha). Given the backwardation it hardly matters anyway. Strange action today - people start to realize that shut down in Mexico is more serious than if Dean hit GOM directly. Anyway I used to be short most of the time this year because I am very big in oil stocks - so to be a bit long is really a push for me :) .
    #42     Aug 22, 2007
  3. nitro


    Today the number of borrowers that went to the FEDs discount window is published. It will show how bad the liquidity crunch really is.

    I believe the number comes out after the close. However, seeing how the markets are reacting, my guess is that number has been leaked and shows real concern. We'll see.

    Defense into the weekend seems the ticket today.

    #43     Aug 23, 2007
  4. dhpar


    not sure how you want to judge credit crunch from the usage of discount window...?

    anyway - i look at it differently: the weakest hands (and mortgage providers) are already defaulted, the biggest hands are already bailed out. :) We will have some volatility (and profit taking in the short term) for weeks to come but my best guess is that the worst is over.

    the question remains as to the effect on the economy this storm had - if we stay at these levels I doubt it will show in any (sentiment) data behind mid September. So consumer weaker but still going pretty well.

    and let's not forget - oil up :D with treasury yield curve continue to flatten.
    #44     Aug 23, 2007
  5. dhpar


    out at 70.28. will buy it back cheaper on Mon/Tue.

    fantastic day in treasuries - 10bps flatter on scare from current levels and the next week's auctions. unfortunately today's data were too strong so I could not double up my shorts at better levels. some sell-off still postponed till Mon/Tue next week.

    have a good weekend
    #45     Aug 24, 2007
  6. No; I can't explain it; I just looked back at Natural gas market crashing in last year.

    I have loaded up some gold contracts afters Fed lower the discount windows; and BOJ stops raising its rate.
    #46     Aug 24, 2007
  7. nitro


    The discount window is still too expensive to use. But the FED can lower it another .50 basis and its effect would definetly be felt. I doubt they go below 5.25 (the FFs rate) on the discount, as that just creates an arbitrage and helps out the wrong people. At that point the FED just cuts the FFs rate.

    I don't have a strong opinion on whether what we have seen just hit a piece of ice, or wether there is an iceberg underneath the credit woes. If you put a gun to my head, I would answer indirectly by saying that when you see a roach or a mouse in your house, there are plenty that you don't see.

    But it is not just that people are defaulting that is of concern. Now the psychology of the market has gotten so bad that large chunk of the credit markets are not functioning.

    That said, there is no questions that markets have stabilized. I expect the next two weeks to be dead (barring no more credit news or category 5 hurricanes) until we get close to the Sep. 18th FED meeting, which will probably be very volatile, even more so than typical FED days.

    Until then, sell premium but hedge correctly. Look at this thread for strike ideas.

    #47     Aug 27, 2007
  8. dhpar


    just for fun; in Dec at 69.64 - despite market looking weaker today, i.e. all bad news ignored.
    at least I can add if it goes lower (68ish) :)
    #48     Aug 27, 2007
  9. dhpar


    ok - out at 70.01. let's wait for another day.
    #49     Aug 27, 2007
  10. nitro


    I eat crow. The markets are wild again. Sheesh, I don't know. FFFs now essentially pricing in a cut at the Sep meeting. If it weren't for that, 1400 SPX may have been taken out on the daily close.

    However, no chart damage still. End of 1/4 buying here by bargain hunters and confident bulls, as it should be.

    Can you imagine having to cut the FFs rate with oil at $70, other commodities at near all time highs, milk at $4, strong GDP growth worldwide, the dollar in the dumpster, and a strong job market? The rest of the world central banks aren't even close to thinking about cutting the rates. I feel for Ben Bernanke.

    #50     Aug 29, 2007