Oil market pure madness now?

Discussion in 'Energy Futures' started by ORM, Jan 24, 2007.

  1. ORM


    I dont trade oil, but I look at it from time to time, as it is sort of an interest. Lately Ive noticed that the volatility must have increased a lot. Anyone here that trade oil that can verify or reject that assumption? In a 30 min timeframe the oil goes +/- a dollar. Its pretty insane considering oil is a world commodity.

    Ive also looked at some fundamentals for oil... Again just because the market interest me, nothing more, and it really look bearish. The supply is much greater than demand, and oil inventories rise and rise.

    Then I read in a paper that it is hedge funds holding the market and price up now, and there was an analyst speculating in several going bust under 50 dollar. Anyone else hearing this?

    Is the oil market becoming a traders market now, just like the internet was 6-10 years ago? This just looks very stupid to me, but if it is then I want a piece of the cake.

  2. First of all, don't listen to ANY of the journalists. They are third stringers, and need to have a "reason" why markets move. EVERY SINGLE DAY, FOR EVERY SINGLE MARKET, they can come up with a plausible reason for either direction.

    Analysts, 2nd stringers, if they could trade, they would. Not much better than journalists as their time frame is too long for such a complicated market as crude, and they basically guess because they are paid to do so.

    Yes, its volatile. This is a GOOD thing. Plenty of liquidity, zero slippage trading electronically with limit entries (exits are another thread entirely).

    Supply/demand is only marginally important, unless we get really tight. Its more what the hedgies are doing (thank God they all think like lemmings), and paranoia about terrorism or belligerent producers. This market could be at 40 in a week, or 65.

    Trade it sht term if you have the skills, use your charts, ignore the predictions. Be sure to be on the sidelines during the inventory reports however. Forecasts have been WAY off recently.

    What do I think. Well, at the moment, its still oversold. By Friday, it may be time to sell again, depending on price action.

    PS don't listen to me either. Just one opinion.
  3. Follow Dr. Chen.