This is the last move for Crude --shaping up just like the wheat trade!

Landis82 · May 9, 2008

Quote from BlueStreek:

I think under any scenario it will be a very bad weak for any Crude longs, and they need to get out quick, (tight stops) once the carnage begins!

Very possible.

But I will let the price action and the CHARTS tell me what is happening, rather than place some sort of preconceived bias or notion that the market has to go somewhere . . . I've been trading long enough to know that TRENDS have a tendency to stay in place for quite some time, as well as "overshoot".

Good Luck to All!

increasenow · May 9, 2008

Quote from BlueStreek:

I think under any scenario it will be a very bad weak for any Crude longs, and they need to get out quick, (tight stops) once the carnage begins!

agreed...there may not be a bigger upcoming EIA/WEd announcement then this one May 14...why?...if Oil went up last week on bearish EIA news...then if a "2nd wave" of EIA bearish news comes this wed...could be a massive sell-off...but, some other news could start the sell off monday, tuesday...I severly doubt we are in the $120's by this time next friday...

BlueStreek · May 9, 2008

If there is one thing to learn from this, I always knew commodities were the most technically "inclined", i.e., technicals play a more relevant role--both as a predictor, and self-fulfilling prophecy b/c traders all know this notion; however I didn`t realize how many standard deviations a widely traded mainstream commodity could go, and even go against logical inferences--like dollar getting stronger, economic theory, price destruction, governmental response, building inventories, etc.----but they do say the last phase of a spec bubble----is the euphoric, irrational phase.

But on these crazy momentum plays like Crox, Peix, amd,any homebuilding stock----make sure you add just one more standard deviation from where your first instinct is that the momentum is overdone---as you may miss some trades----but your reward---increased profit, and taking less heat, will in the long run make up for these lost trades.

Landis82 · May 10, 2008

Quote from BlueStreek:

If there is one thing to learn from this, I always knew commodities were the most technically "inclined", i.e., technicals play a more relevant role--both as a predictor, and self-fulfilling prophecy b/c traders all know this notion; however I didn`t realize how many standard deviations a widely traded mainstream commodity could go, and even go against logical inferences--like dollar getting stronger, economic theory, price destruction, governmental response, building inventories, etc.----but they do say the last phase of a spec bubble----is the euphoric, irrational phase.

A possible "catalyst" for the "Bubble" in crude . . . would be the ICE; an unregulated OTC electronic market for Brent and WTI Crude that has no position limits ( read: zero transparency/scrutiny ) and was allowed ( by the CFTC ) back in January of 2006 to allow U.S. based traders the opporunity to access ICE via terminals here in the U.S.

http://atimes.com/atimes/Global_Economy/JE06Dj07.html

Something to keep in mind.

BlueStreek · May 10, 2008

Like the Enron trades in California, we probably will not know the real extent of the ice availability to US traders, and other creative pumping strategies employed by market manipulators.

However, even GS themselves, and they should know, admit their are speculators in the market, that`s who they applauded, for moving longer term energy solutions forward sooner.

So if any person puts forth an argument that there are no specs in the market, they are either trying to maniuplate your opinion for their gain, or just plain wrong on this issue.

Landis82 · May 10, 2008

Quote from BlueStreek:

So if any person puts forth an argument that there are no specs in the market, they are either trying to maniuplate your opinion for their gain, or just plain wrong on this issue.

There is no doubt an increased amount of "specs" that are playing in this market.
That can be confirmed by the COT reports, year over year.

That having been said, I have never been too fond of "conspiracy" theories ( in regards to a global commodity such as Crude Oil ) because the global market place for oil is much LARGER in magnitude than the Northern California power "grid" that Enron "gamed" by a factor of about 1,000,000,000,000.

It's not even close.
Thus, I take the article that I posted ( via weblink ) that addresses the lack of reporting and position limits at the ICE with a grain of salt as it applies to this recent run-up in crude.

S2007S · May 10, 2008

Quote from Landis82:

Now you are claiming to be SHORT commodities???
WTF???

What happened to all of your INFLATION themes and constant "bashing" of Helicopter Ben pumping up the money supply to RE-INFLATE???

You are about as much of a "flip-flopper" as John McCain has been over the years. And your total lack of understanding of the "DCR" confirms just how absurd your knowledge base is.
Congratulations, you have ZERO credibility.

But please keep posting . . . it's getting more and more absurd by the minute!

Claiming? I just purchased DEE on Friday around $23 a share, and SMN I have been trading in and out of, I know interest rates being where they are is going to inflate commodity prices, but I also know our slowing economy thats in a recession cannot help sustain the incredible run in commodity prices. All markets correct and the next one to correct after housing market is commodities. Keep laughing at my trades and thinking oil is going to keep running, but we all know this is cyclical and that bubbles don't last forever. These commodity markets are going to have a severe correction.

S2007S · May 10, 2008

Quote from Landis82:

Is this why Retail Sales for April were better than expected and 19 out of 28 retailers beat estimates???

In fact, The UBS-International Council of Shopping Centers retail sales tally for April rose 3.6%, surpassing the 2% growth estimate.

Understand that HUGE MARKDOWNS and the EXTRA SHOPPING DAY helped out retail sales this month.

And not only that but most retailers are dropping SSS figures so they can surprise to the upside, remember the saying "under promise over deliver" thats exactly what they are doing.

And what did WMT say for sales in MAY:

Forecast that May sales either would be flat or gain up to 2%

0%-2% wow talk those estimates, I guess 0.1% would propel the stock above $60.00....

Mercor · May 10, 2008

Quote from Trendytrader:

Look you guys on ET need to start listening to the Government. As they keep telling us there is no recession as we still have positive GDP growth.

So what if oil is up a little bit $126/bbl the economy is strong so says Bush.

Had you asked every economist, scholar, advisor, 3 years ago, What would happen if oil ever went to $125 a barrell. All would have said a major world depression, unemployment at 20%.

But now here we are. Nobody would have thought we would have this type of an economy (minor job loss, CPI under 10%) with 125$ oil

makloda · May 12, 2008

Quote from Mercor:
Had you asked every economist, scholar, advisor, 3 years ago, What would happen if oil ever went to $125 a barrell. All would have said a major world depression, unemployment at 20%.

Yes they said the same thing about $60 and $90 before. Essentially, we will never know what level of commodity prices the economy can take without falling into paralysis until we reach that magic point.

The good thing about speculation in commodity prices is that speculators will drive prices to whatever economic tipping points that will induce a slowing (overheated commodity prices that slow down the economy) or upturn (low commodity prices that induce economic growth) in demand.

The problem for the US is that no one in China or Russia cares if $150 or $200 crude slows down the US economy. China, India, Russia and the Middle East will consume more crude oil than the US this year (http://www.bloomberg.com/apps/news?pid=20601109&sid=a_YCEx7do3LQ&refer=exclusive ).

So my take is that we will have to see at what price point the aggregate world demand slumps. The US alone is not the fulcrum anymore. It certainly doesn't help that some emerging markets subsidize gasoline (http://photos1.blogger.com/blogger/4189/1379/1600/GasSubsidies.jpg), therefore distorting the supply/demand effects of market prices.