User 273178

LEAPS of Hope

Wow, talk about drinking the Kool Aid. He's inspired who since he's been in office?
Every speech he gives, he says the word "crisis" constantly. 26 times in one speech. He warns of impending doom if he doesn't get to spend his trillion dollars. The author should do some studying of Reagan if he wants to see a Pres. who inspired people, and lifted the social mood. He was ALWAYS optimistic on this country. Not when it fits a political motive. Obama gives great speeches. Many however, are able to look beyond that.

Watch for Yourself: 60 Minutes Oil Story Was Spot On

Explain it well, and explaining what happened accurately, are 2 very different things. I would suggest to all, learning about Elliott Wave theory and mass psychology's impacts on the markets. It will give you an entirely different perspective.


On Jan 13 11:10 PM Allen Phatimer wrote:

> 60 minutes explained it pretty well. The arguments of there's always
> a seller for every buyer and they never take delivery are so amateur
> that you guys embarrass yourselves when you spew that crap. Think
> about what you're saying before you regurgitate what you heard another
> fool say. Let me make it really simple for you - SPECULATIVE ELEMENTS
> THAT BUY AND SELL A NEW PARADIGM TYPE LINE OF CRAP ARE KEY CONTRIBUTORS
> TO BUBBLES. Your buyer and seller for every transaction line suggests
> that buyers don't move prices higher and sellers don't push prices
> lower.
>
> I NEVER SAID THAT SPECULATORS WERE THE ONLY CAUSE OF THE OIL PRICE
> SPIKE. I SAID THIS: "The fact is that no one really knows when the
> world will run out of oil. Many factors influence energy prices over
> the long run, including production costs, the dollar, supply, demand
> and competition from alternatives, etc. But bubbles are usually borne
> of cyclical (and ALWAYS temporary) supply/demand imbalances exacerbated
> by analysts and pundits who con otherwise unsuspecting investors
> and traders with new paradigm type stories."
>
> By asserting the naive buyer and seller and delivery crap you are
> saying that speculators either don't exist or have no effect, which
> is naive. As pension funds and endowments and CTAs, and Hedge Funds
> (levered to the hilt) and brokerages and others buy into the madness,
> the buyers outnumber the sellers in a big way. Pension Funds, Endowments
> and non-commodity hedge funds should have never been involved - by
> getting involved to the extent they did, they became SPECULATORS.
> They talked about a commodity bull market that would last for another
> ten years. They declared commodities to be a asset class that should
> be well represented in everyone's portfolio no matter if you were
> a gunslinger or widow. They were dead wrong. How many of those
> guys do you suppose are still "holding for the long term" like non-specs
> do. Commercial and Speculative open interest increased much more
> than the 2% average increase in end market demand (demand was strong
> and Chinese were buying and we and everyone else was filling SPRs).
>
>
> Consumers do NOT buy oil; they buy refined products like gas and
> heating oil; the demand for which did not increase or fall anywhere
> near as much as they amount of energy futures did. If prices tracked
> end market demand alone, then you would never see anything like the
> parabolic move you saw. Calls for $200 and $300/ bbl oil were as
> absurd as calling for AMZN to go to $1000/sh. back in the internet
> bubble immediately before AMZN proceeded to give up 90% and fall
> back to $10. If that sounds stupid in retrospect its because it
> was.

Watch for Yourself: 60 Minutes Oil Story Was Spot On

Explaining it.


On Jan 14 07:29 AM romerjt wrote:

> romerjt - Are you explaining this or defending it - the market that
> produces these wild swings?

Watch for Yourself: 60 Minutes Oil Story Was Spot On

Sorry, but there is a lot wrong with this article, and the 60 minutes article. In the interest of time, I'll mention 2 things that anyone who's ever spent 20 seconds following an energy market should know, but have been ignored.

1. THE DOLLAR! When the dollar was collapsing, it made dollar-denominated assets (oil, gas) go up. The dollar stopped falling early in 2008, built a base, and started rising very sharply, and that coincided with oil's collapse. For the record, back in mid-July I called for the crash in oil, to 90 as an initial target, then lower potential. I also was bullish on the dollar shortly thereafter.
When the dollar started to rise, the opposite effect obviously occurred, so it helped oil to collapse.

2. The $25 dollar rise in oil on Sept. 22nd was horrendous journalism, and it is obvious they have no clue what caused it. I was watching the spot and 2 forward month contracts when that happened. Within 30 seconds, the reason for that rise was quite obvious. The current contract was due to expire that afternoon. Shorts were forced to cover. There was little volume because the real trading was occurring in the next forward month. So a short squeeze occurred. The next day, the oil contract switched months, and the price was back where it was.

How was it so obvious there was something contract-specific going on?
Besides the low volume and wide spreads in the trading, when that contract was up $25, the next 2 forward contracts were only up $4. Those 2 were trading as they should, and did NOT accelerate with the other contract. And gasoline didn't rise to match the oil rise either. They should have known this, or not even brought it up, because that one day spike had ZERO impact at the pump, or anywhere else.
I'm sorry, if one can't see this, as it is so basic, everything else said should be suspect.

Another fact. Bubbles occur, we've seen a number of them. That was a bubble that burst. For every buyer there is a seller. If the volume issues brought up were a reason for the rise, it wouldn't have fallen $112 from its high now would it?

Oh, and the author suggests the $25 move asserts that doesn't happen in the middle of moves, but more at a top or bottom. Wrong. It most certainly did happen in the middle of a move-a down move. Oil had fallen from 147 to 90, and that incident was during the bounce from 90 before the next wave down. News isn't required to move a security. Technical factors matter. The problem is, that the media always has to find a reason for the tiniest move, so people think the only reason something moves is because of news. Rather, news is written to fit the move. That is Elliott Wave territory, which could explain this a lot better than CBS certainly could.

5 Reasons Why the $700B Bailout Could Translate to $250 Oil

There is a glaring error in this article. The day the Oct. contract soared to 130, but closed at 120, it was the only contract to do so. There was massive short covering, the likely result of hedge funds having to buy to cover, as that was the last trading day of that contract. In fact, it was rumored AND reported that a few hedge funds took big losses. Gasoline never followed the Oct. contract, and the Nov. and Dec. contracts both closed around 109, never rallying when the Oct. contract did.

As one who follows commodities, it was very easy to see what was going on. Volume was light in Oct contracts, but much heavier in Nov. and Dec. The very next day, people probably thought oil fell $14 when it closed at 106 or so, but that was because the quoted front month changed.

I have seen far too many use that anomalous trading day in one contract to draw conclusions about so many things. It had nothing to do with the economy, the dollar was down, but not nearly enough to account for that, nor did it have anything to do with any bailout, etc.

Unfortunately, common practice is to assign a cause for every single market issue, but the problem is, most of the time the causes claimed, are not the real reasons. There is an unwinding of many things going on right now causing more volatility, but there is no denying that commodities entered a bear market in July, and this is bear market behavior.