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Hedge Funds, Shale (LTO) Producers About To Get Whipsawed Again, Even As Demand Rises Over Supply

Jul. 08, 2017 7:14 AM ET27 Comments
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Asset class modeling, Macro analyst, Bonds & Equities, Currencies & Commodities

Seeking Alpha Analyst Since 2011

Robert P. Balan runs Predictive Analytic Models, #1-rated trading unit at Seeking Alpha. PAM trades Swiss HF funds using Federal Reserve, US Treasury, and term (money) market liquidity data flows as basis for trading decisions. He is domiciled in Zurich, Switzerland.

Robert Balan has 5 decades of experience in the financial markets. Education in Mining Engineering, Computer Science & Engineering, M.S in Quantitative Finance, and training in Economics led to a commodity analysis career during the commodity boom of the early 1970s. Robert made a switch to global macro focus in the early 1980 when the commodity bull market waned, with specialization in foreign exchange. Robert wrote a very high profile daily FX analysis while Geneva-based (Lloyds Bank Int'l) in the mid-1980s (the first FX commentary with a real global readership, "most accessed" in the Reuters and Telerate networks from 1988 to 1994).

He worked for Swiss Bank Corp and Union Bank of Switzerland (precursors of today's new UBS) as head of technical research in various finance centers (London, New York, and subsequently, head of prop trading at SBC in Toronto ) from the late 1980s to mid-1990s. A stint at Bank of America as head of global technical research followed in late 1990s to the early 2000s. 

Robert returned to Switzerland in 2004 as head of technical research and strategy, and FX market analyst for Swiss Life Asset Management in Zurich. Robert wrote FX analysis and capital markets commentary for Saxo Bank (Denmark) in the early 2000s. He joined Diapason Commodities Management (CH) in Lausanne in 2008 as senior market strategist, and subsequently Chief Market Strategist, utilizing fundamental macroeconomic drivers and structural/technical data in modeling asset price and sector movements. 

Robert wrote a book on the Elliott Wave Principle in 1988, which has been hailed by the London Society of Technical Analysts as best ever book written on the subject. Robert is a member of the National Association for Business Economics (NABE), U.S.A. 


  • COT Spec Positions: Money Managers (Hedge Funds) Agg. Long vs Agg. Short -- MM just following the price (after a lag) and are about to get whipsawed the 10th time.
  • US Shale: Total Output, Rig Count, C1-C36, C1-C24 Spreads, WTI price - US Shale oil rig count, TLO output keels over soon, following the lead of the price, long spreads
  • Global: Spread of Production less Demand (yoy) vs. WTI Oil Price (yoy) - RoC in Demand now outstripping RoC in Production, hence the oil price should continue rising

COT Spec Positions: Money Managers Agg. Long vs Agg. Short

Money Managers (hedge funds) have just been following the oil price (after a lag) and will be whipsawed again, the 10th time since August 2016


US Shale Region: Total Output, Rig Count, C1-C36, C1-C24 Spreads, WTI price

US Shale oil rig count and TLO output to keel over soon, following the lead of the price, spreads

US Shale Region: Total Output, Rig Count, C1-C36, C1-C24 Spreads, WTI price


Global: Spread of Production less Demand (yoy) vs. WTI Oil Price (yoy)

The RoC of the spread between production and demand leads the RoC of oil price by 5 months

The RoC in Demand is now outstripping the RoC in Production, hence the oil price should rise


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