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Traders are still speculating about what caused the late selloff in crude oil yesterday. The...

Traders are still speculating about what caused the late selloff in crude oil yesterday. The Kilduff Report's Michael Fitzpatrick says it wasn’t a release by the Strategic Petroleum Reserve, nor was it some unusual trading activity. It was long liquidation, simple as that. JBC Energy adds that the fact that a selloff occurred for both Nymex crude and Brent “implies that this was no technical glitch, but rather a profit-taking strategy by major market participants that were worried about a price correction.”
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Comments (10)
  • Remyngton
    , contributor
    Comments (354) | Send Message
     
    If that's the case , that was one of the SLOPPIEST SELL orders of all time.
    That trader should be fired for taking crude down , over $4/bbl. at one point . . . .
    It was like giving a machine gun to a monkey
    18 Sep 2012, 07:18 PM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    Nothing else FED is manipulating that too. Ben can do anything, Forex, stocks, commodities and money supply. When you are in charge of printing pres you can do anything.
    18 Sep 2012, 07:24 PM Reply Like
  • jvix
    , contributor
    Comments (12) | Send Message
     
    ZH blames the Saudis http://bit.ly/QjMhgA
    18 Sep 2012, 07:32 PM Reply Like
  • Ted Bear
    , contributor
    Comments (621) | Send Message
     
    Remyngton...suppose you are correct, and it was a sell order.....a SHORT order.

     

    The person that executed it took the market by surprise, scared the hell out of everyone, left them all scratching their heads.....while the seller was vindicated because they covered down some 5% from where they started in a matter of 24 hours. Lets suppose it was a billion dollar sell program (and we won't even talk about all the huge shorts which the seller already had laid out in the oils, refiners, and drillers before they fired the final shot in the oil pit) .....and they averaged 2.5% return on the trade. How's that math look to you? That's 25 million big ones in less that 24 hours!

     

    Just because you and i might not have executed that order in such a fashion, let us not be too quick to judge the (profitable behavior) of others. That order accomplished exactly what it was meant to accomplish: it put the fear of god into the oil patch, as witness the further selling which we saw today. Was it done for profit, or was it done to send a message, or why was it done?

     

    You and i will never know.

     

    This afternoon, someone took NOV, DO, and ESV up just shy of the 10% halt limit in a matter of seconds. In a minute each of these was back down trading in line with the prices just prior to that 'moment'. These are not small, penny stocks which can be pushed around. Their primary market is the big board where (arguably) a specialist is watching the price behavior. Why did this happen? What message was sent by these price spikes?

     

    Have fun trying to sort it out......but i promise you that you and i will never know why these shares rallied 10% in a matter of seconds, nor why oil fell some 4% in a matter of moments yesterday afternoon.

     

    But you can bet that somebody does, and they made a bundle, and they aren't about to talk about it with anyone.
    18 Sep 2012, 07:53 PM Reply Like
  • Remyngton
    , contributor
    Comments (354) | Send Message
     
    There wasn't enough volume at the low level for this person to make $ on the trade covering a short
    It's not just about price , it's about volume
    If it was as easy as you say , it would be done every day
    Look at the VWAP on these trades on your Bloomberg
    18 Sep 2012, 08:21 PM Reply Like
  • SmashFinance
    , contributor
    Comments (34) | Send Message
     
    The Saudi Sovereign Fund is a interesting candidate for the short trade???

     

    After expressing discomfort with the rising price levels and the pressure on the global economy.

     

    Probably doesn't even matter very much to them if they lost a couple million on the trade. Fast and effective way to carry out it's wishes.
    18 Sep 2012, 08:22 PM Reply Like
  • joeytofoic
    , contributor
    Comments (13) | Send Message
     
    25 ships headed for the Suez, 2 dollar. Republican Guard in Syria, 1 euro. Netanyahu beating his war drum, 3 scheckels.

     

    Commodity market manipulation, priceless!
    18 Sep 2012, 10:19 PM Reply Like
  • greg4
    , contributor
    Comments (9) | Send Message
     
    My guess, leaked information from the IEA on the upcoming build in crude inventories. If so, another reason to believe the game is rigged. I hope not, but I'll be watching the inventories report.
    19 Sep 2012, 08:00 AM Reply Like
  • Ray - Kitchener
    , contributor
    Comments (74) | Send Message
     
    The only way to play Oil these days is both ways. Sell on the dips and spikes, but always buying back in for small gains. Keep positions neutral using SCO/UCO. It is so rigged.
    19 Sep 2012, 09:05 AM Reply Like
  • greg4
    , contributor
    Comments (9) | Send Message
     
    The way I play oil is a UCO/SCO combo spread. Sell at the money calls and let them decay over time. Due to options time value and the leveraged nature of ETFs, they will naturally decay and provide a nice little profit. Since you are selling both calls, one goes up in value while the other goes down in value while it is decaying. Thus being a delta neutral trade.
    20 Sep 2012, 09:23 AM Reply Like
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