MJ, are you watching the 200 DMA on USO or the 200 DMA on the actual spot price of oil? Is there even much of a difference in where the line is drawn at this point? I think I saw the 200 DMA line on USO drawn at 38.01 as of last Friday. It's really close to that point now. I'd say the odds are decent that it breaks below there this week, maybe even today if there's not that typical buying spree before the Nymex close.
I just watch USO, since I can get real time tick by tick on my screen. On my USO chart the 200-day is about $38.20. We smashed through it, bounced back to the underside, and have been stuck here for 45 minutes. That is pretty much what it should have done, and next I'm looking for it to plunge, but we are into the last 30 minutes before the NYMEX close, so who knows. There always seems to be some idiot(s) that want to buy it into the close, so they can watch it gap down on them the next morning. I'm guessing they are the same ones that have to pee on a hot wire.
The time to go long on anything in the last two years is when expectations are lowered. Dow's up 150 on retail sales news that showed a decline, but it was better than expected. As much as I'd like to jump into SCO or DTO, I just cannot justify it anymore. I've stayed away from oil for over a year now and that trend will likely continue.
I think oil is in a bear move right now, and part of that move allows for it to rise back to $99.46.
I've set up short positions at this level and if oil moves above this price by even 15 cents, I close it down.
I took last week off and yesterday everything was stagnant so 100% cash.
Today, I wait for $99.46 oil.
Chem: June is traditionally a bad month for me too. I could write tons of articles on the stupid things I've done with June investments over the years.
I'm long crude at 98 and short crude at 109.
Also...take a look at the 3-month chart on UUP. I think that we are in for a dollar rally...especially since we are "maybe" headed toward an end of QE for awhile.
If I were to be pinned down, I think that the crude price is in an upward bias now for the next 6 months or so...especially in light of the China retail data that came out today. I plan to pile in heavy on the long side when we get meaningful pullbacks.
I guess we could co-author a book then with the stories between us:
On oil, it's in a 50/50 place. On one hand the current bear down trend is still intact due to the fact oil was allowed to rise to the 99.46 mark. It was close enough for me. But, that rise yesterday did give give oil a marginal chance of turning bullish. SO WE ARE IN A POCKET.
so, basically moving above 99.77 dramatically increases bullish case and falling below 98.09 dramatically increases bear case. Since bear is dominant, I look for opportunities to get short on rally's up to the upper range. i do not look to get long at this time.
THat was a nice move down in oil. To me this all but guarantee's $85 oil.
The monkey wrench is Hurricane season.
Use any rally's in oil to get short. I have a maximum rally target at 96.95 but I doubt oil can get there.
I've been wrong before on a grand scale...however, I'm going to run contrary to your call. I think that the demand projections point to above 100 and I think that the NOAA bubbas are preicting above normal hurricane activity over the next 6 months. I bought some UCO today and will buy more on the pullbacks...with the full understanding that oil is one flaky trade right now.
I hate to guarantee anything when it comes to oil, but that close below the 200-day sure wouldn't excite me if I was long. Plus we zipped right through one long term uptrend line that has been in place since the end of August, and closed below it. I believe there are two more below, but the next one is another 5% below at just over $36 (USO). Maybe we can finally flush out the hedge and pension funds that have no business investing in something like oil, and get back to a normal trading pattern.
Db, that's what makes a market. We'll be on different sides, at least for this trade. Oil anywhere in that mid $85 area and I get long, of course dependent on all the several factors. Thing is I can see oil hitting $85 within a five a 7 day period.
MJ, I guess I did go out on a limb with "guarantee" but, I think I've only ever tried saying something that confidently less than a handful of times. This is one of those times I feel pretty confident.
Oil punched through several (4) critical levels today in one fell swoop. When anything falls through the levels like that, I get extremely confident, but you're right, trading has no guarantee's and i might get some egg on my face along with the yellow coffee:)
Tomorrow is another day.
I just hope you don't jinx my trade. LOL! I've been very patiently waiting for this for 3 months now. It is looking pretty likely that the excrement will hit the fan in Greece this time in which case $85 might be way too high to be buying in.