The "good" unemployment report is the best thing the Crude Oil shorts could have hoped for. This appears (see my other post and charts) that the massive liquidity to primary dealers has peaked and the move to the US Dollar (up over 0.6% in just a few hours today) in a big way is upon us. The US Dollar whether it makes sense or not has only one way to go and that is straight up this will squeeze the speculative trade to a point that amazes all of us. Kind of like the run from $30 to $85 in just 13 short months. The fall will be much more swift and decisive.
Good luck to all regardless short or long or otherwise.
What concerned me was the the solid buy trend yesterday going into the long weekend told me that buyers were good with the jobs number no matter what and and gladly paying 85 looking for that 90 number. I didn't even have the guts to try to catch a downward dip, I don't think its coming yet.
Sounds nuts to me but we aren't in control of this, just passengers.
That's why I am sticking to the "off the cliff theory" and that oil never corrects downward without a serious market jolt forcing it.
Consider the number increase of 160,000 in the context of:
(a) $800B stimulus has been going through the economy for over a year now
(b) out of 160,000 48,000 were temporary hires for census
(c) At least 140,000 jobs a month needed just to employ new workforce (graduates, immigrants etc.), only above 140k jobs will help current unemployment rate.
(d) Average work week has in fact, shrunk a little bit
(e) percentage of workers working full time has in fact, increased little bit.
Let us see how this pans out in coming months with higher oil prices and census work winding down at some point. A step in the right direction but way too early to begin the party.
And thats the problem with anything that is pumped on pure Liquidity. Why is it trading at $40 with so much supply and technology making Crude Oil less expensive by the nanosecond? Technology the great deflationary invention. Well if there are NO fundamentals supporting $40 or $50 or $60 or $70 or $80 why not $90 or do I hear $95? It should be a crime to paper push this with Goldman Sachless reporting $5 Billion dollars in profit from Energy trading in just a few short months. The great transfer of wealth squeezing the middle class.
At this point nothing would surprise me. I can use the only instrument that makes sense and its the liquidity tables. It appears to have peaked and its a matter of timing. The problem I have is I do not have enough buying power to ride out this blow off top we are experiencing so they screw all of us.
Me and you both. I am short since about $75 shorting the futures. I was way too early as always. Here is the overall liquidity picture I promised:
Couple this with the granddaddy of them all:
These 2 charts has all the information you will ever need to decide which way we are heading. Has nothing to do with government bogus stats, crude oil fundamentals and so on.
Case and point looing at the first chart when Crude went from $140 to $30 in a matter of minutes. Why? did the fundamentals change that quickly? No demand more or less did not waver (only after and now are fundamentals the WORSE) did China decide Crude Oil was evil and not import anymore? The fundamental picture did not change that much so why such a massive drop from $140 to $30 in a heart beat? Simple LIQUIDITY. Liquidity left the system as shown in chart 1.
What makes chart 1 and chart 2 so beautiful is the fact that despite all out pumping by the FED that SP and other Commodities are no where near their all time highs? Why? Simple chart 2 shows that the more the FED pushes from now on the worse effect it will have on GDP (growth). This is due to massive and I mean massive hidden US denomited DEBT.
Make sense? By the way the US Dollar is approaching a postive 1% gain in just a few hours it will EXPLODE to the upside if the charts hold above. If Crude is UP on Sunday on the open look to sell the hell out of it and watch a massive $3-$5 drop occur. Just a matter of Liquidity.
Oil should be no more than $60-65. The speculators are back, trying to pump it up again. They are taking money out of my wallet at the gas pump. I'd like to punch one of these pricks right in the face. I think oil is going to get hammered. I have puts, and I'm ready to buy more.
False, read previous post. Liquidity that simple we have peaked to primary dealers and look out below since there are no fundamentals. Ever wonder why certain stocks or instruments trade at say book or cash value and you wonder why it keeps dropping? Liquidity both ways baby.
They wont leave the "busy Summer travel season" freebie on the table because there is so much "optimism" coming and 150K jobs are "flooding" in monthly.
Market thinks everything is great and debt wont matter. They expect that new jobs number to grow exponentially from now on but they are on crack if they think we will see 500K new jobs a month and 6 million back to work 12 months from now. We still have the zero tolerance for-profit totalitarian Obama Administration and 100 years of debt to absorb.
Oil up 60-75 more days, $96-105 range.
There are very few instances ever that oil was lower in April-May than in March. Oil will run up even faster on the "fantastic optimism" theme and China sucking down all the World's oil.
However, watch for a gradual 20% sell off all Summer to mid $70's (if it doesn't collapse first)
Will oil continue to double every 12, 24, 36 months is the real issue which will be the primary inflation driver and always outpacing household incomes. Something has to give (and it wont be incomes rising)
Until they force the major oil contract hoarders to plop down 100% cash, the problem will only grow worse.