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hedgehog25 6690 posts  |  Last Activity: Jan 29, 2016 7:44 PM Member since: Aug 1, 2007
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  • hedgehog25 hedgehog25 Jan 29, 2016 7:44 PM Flag

    No it's not.

    I see ~60 as the upper limit of what's realistically possible for the coming year. And don't misunderstand: I am not predicting that it definitely or probably will get to 60. I'm saying that's about the maximum.

    I don't know where you get this idea that "consumption is kicking". It's silly to cite a typical seasonal factor like cold as if it's big news that's going to turn the market around. A run-of-the-mill cold snap doesn't affect long term price trends any more than a warm spell does, and this winter has been nothing out of the ordinary. And I don't know where you get the idea that "traffic is building" in any way that's particularly noteworthy.

    Oil has a very low elasticity of demand, and consumption trends are fairly constant and predictable, so it's really all about production. At prices in the 30s, downward pressure on production is significant, but with higher prices, production capacity that has gone idle could very easily be brought back online. In fact, oil production can respond more quickly to increasing prices than to decreasing prices.

    I think the equilibrium price is somewhere around 45, and barring drastic changes in the industry prices will keep being attracted to within about 5 bucks of that like a magnet. They can't stay under 40 for very long, and they can't stay over 50 for very long.

    I'm planning on getting out of my long position when prices go to somewhere around 40 - 45, and won't short unless it gets to at least 55. You might want to hold until 55 if you like to reach with your trades, but if you hold out for 70, the only kicking will be you kicking yourself for not selling out when you had the chance.

  • hedgehog25 hedgehog25 Jan 22, 2016 1:32 PM Flag

    Hmmm, I do recall you saying that buying USO at 20 (even 22, I think) was easy money, and higher prices would come very soon. I stand by what I've said before: USO will NEVER go back to 20, in split-adjusted real dollars. Even 17 is unlikely.

  • hedgehog25 hedgehog25 Jan 22, 2016 1:25 PM Flag

    I doubt there are many of them. Nearly all short positions on oil, of any kind, were entered at higher prices. No doubt some of those people *held* their short positions at that level, reasoning that the trade has been working wonders for them and they have plenty of buffer room in green territory, but I doubt more than a handful of people worldwide were stupid enough to open new short positions with prices under 30.

  • hedgehog25 hedgehog25 Jan 22, 2016 1:18 PM Flag

    Because the strategy has already succeeded spectacularly and there's plenty of wiggle room to the upside without threatening its success. Oil prices could be 45/bbl or even 50 and shale producers would still face bankruptcy. 95% of shale projects are losing money at 50, and the only ones that are profitable at that price are just barely squeaking by. At prices under 40, the Saudis are unnecessarily depleting their resources for relative chump change and no overall gain, and they know it. Or, to put it in Econ 101 terms, due to the low elasticity of oil demand, prices are currently below equilibrium. They're not making any more money than they would be making at prices $15 higher, they're just squandering their resources.

    Also, contrary to what some people seem to believe, the Saudi monarchy does NOT hold a proprietary title deed to OPEC. There comes a point where an alliance of other members could break their dominant position, but I don't see a mutiny happening because the Saudis wouldn't let it get to that point. They have no incentive to isolate themselves within the cartel for the privilege of practically giving away resources that the very viability of the Saudi government depends on at fire sale prices.

    The only way OPEC won't cut production is if prices go back up on their own in anticipation that continued prices in the 30 would induce OPEC to cut, as they did at the end of August. And make no mistake about it, that price spike is the ONLY reason OPEC hasn't cut production. So either way, prices are going back up. We won't see 70 any time in the foreseeable future, and even 60 is HIGHLY improbable (though not inconceivable, because trends in financial markets tend to overshoot the fundamentals both ways), but they won't stay under 40 for long, and I doubt they can last under 30 for even two weeks. I'm not saying necessarily that sub-30 prices won't be re-tested, but IF that happens, the bounce will once again come quickly, inevitably, and with a fury.

  • Reply to

    This is a no-brainer

    by hedgehog25 Jan 19, 2016 1:56 PM
    hedgehog25 hedgehog25 Jan 19, 2016 3:25 PM Flag

    I said that in the summer, not when it went back under 40 last month. And in fact it had a significant bounce from there. Front month futures went to almost 51, when I had only been targeting 45-50.

    I also said, over and over and over, that oil ETFs are NEVER a good long term buy & hold investment instrument. If you're down 30% from when I said that oil was a screaming buy under 40, you weren't paying attention to that part.

    In any case, I still think prices under 40 won't last for more than a few months, half a year tops.

  • Reply to

    This is a no-brainer

    by hedgehog25 Jan 19, 2016 1:56 PM
    hedgehog25 hedgehog25 Jan 19, 2016 2:55 PM Flag

    UWTI, for a bounce. Then I'll probably switch to UCO. I'm not touching futures contracts or options,because although I think a bounce will come soon, I'm not confident enough about the timing to risk any instruments with expiration dates. What I am confident about is that $30 oil is unsustainable. I'm long at least until it cracks 40. I think ultimately prices will settle somewhere around 45-55. High enough for all OPEC members to have robust profit margins, but too low to revive U.S. high tech projects.

  • hedgehog25 by hedgehog25 Jan 19, 2016 1:56 PM Flag

    Oil is a screaming buy at under 30. That's all I have to say.

  • ...and after they spent so much money to shoot futures up in a vertical line the first time they went into freefall, too! Such a shame.

    This has got to be a dream. I know this doesn't happen in real life. I'm going to stop sleepwalking and go back to bed now, and surely when I wake up for real, I'll see that SPY gapped up in the morning as planned. Then I'll post about the funny dream I had about futures dropping from 2013 to 1997.5 in less than two hours with no sign of turning back up, and we'll all have a chuckle.

  • Reply to

    China just rolled over..

    by echk06 Jan 5, 2016 12:34 AM
    hedgehog25 hedgehog25 Jan 5, 2016 1:30 AM Flag

    U.S. futures reacted by briefly going into freefall. But not to worry, the visible hand quickly swooped in to fix everything. The S&P should gap up nicely tomorrow morning as previously scheduled.

  • Reply to

    China Gov says "More Stimulous ON the Way" !

    by zenomoose Jan 4, 2016 9:43 PM
    hedgehog25 hedgehog25 Jan 5, 2016 1:20 AM Flag

    At least China is nominally communist, so there's no hypocrisy in this kind of intervention. It's consistent with the Chinese government's avowed economic philosophy. What's the U.S. government's excuse?

  • Reply to

    Nothing says they can't crash from a higher HOD

    by hypersman Oct 29, 2015 12:30 PM
    hedgehog25 hedgehog25 Oct 29, 2015 1:45 PM Flag

    Well, there you go. Another 40 cents and we'll have what qualifies for a "crash" these days, LMFAO!

    As for not having had a recession yet, historically bear markets don't follow recessions or start when the recession is officially declared, they anticipate recessions. Yet here we are already seeing clear signs that we're heading into one and the S&P is going up on bad economic news. This "climbing a wall of worry" stuff normally happens in the late stages of a bear market when a recession is drawing to a close, not when an expansion cycle is stalling out.

  • hedgehog25 hedgehog25 Oct 29, 2015 1:28 PM Flag

    If the "Audit the Fed" bill that Ron Paul used to keep introducing were to pass, it would crash the market. Janet Yellen has pretty much admitted this.

  • hedgehog25 hedgehog25 Oct 29, 2015 1:16 PM Flag

    LOL, you're calling me a moron when you lack the ability to read plain English. You clearly don't have the slightest concept of what I was actually saying. Your entire response was directed to what you conceive of as "the other side", and not at all to anything I expressed.

    This is a classic example of knee-jerking by a rigid-minded ideologue who pigeonholes everything into black-and-white "left vs. right" terms and can't comprehend anything that doesn't fit that simplistic paradigm. You start by labeling everything according to which pre-defined side you think it's on, and then filter everything else through that lens.

    So, when I say that "the rate of warming has at times been significantly faster THAN in the last 150 years", the plain meaning is that at various times PRIOR to human industrialization, the rate of temperature increase has been faster than it has been SINCE industrialization. But that doesn't compute in your mind, because it doesn't fit the label you've placed on what you were cursorily skimming, so you think I'm saying the rate has increased over the last 150 years, and respond "Because the rate has increased over the last 150 years proves nothing."

    That's not what I said, and it's plain wrong, showing your ignorance and proving my point about tacitly accepting the false narrative advanced by the HGW religion.

    "Prove the ice caps melting and the rate of temp change is unnatural, you ignorant, uneducated gullible moron..."

    Why would I prove something that's the diametric opposite of what I think, you uncomprehending, illiterate moron? Anyone who can process plain English and is capable of basic reasoning can see that I clearly implied that that the warming trend and the melting of the ice caps is a natural phenomenon, since I said that it has been progressing for thousands of years and has no correlation with human industrial activity.

  • Reply to

    Nothing says they can't crash from a higher HOD

    by hypersman Oct 29, 2015 12:30 PM
    hedgehog25 hedgehog25 Oct 29, 2015 12:37 PM Flag

    Crash it? It seems like the higher the rally goes, the stronger it gets, even when the economic news is shaky. You know, as if we're recovering from a recession and a long bear market.

  • They'd use their resources to just prevent a total meltdown, and buoy it into a controlled selloff, instead of using all-out brute force to keep jamming it up into a forced uptrend. A bull market to all-time highs through a recession is a job for Captain Obvious. There'd have to be a point where the mainstream media would start to question what's going on and how this is possible. Then people would start to question who really benefits from it the most, causing the whole scheme to unravel.

    A controlled, low angle downtrend would keep the general public from asking too many questions, without causing a panic or deterring anyone from the "just invest your savings long term and ignore the ups and downs" advice.

  • Reply to

    10AM PPT right on schedule

    by dareyou2007 Oct 29, 2015 10:10 AM
    hedgehog25 hedgehog25 Oct 29, 2015 10:23 AM Flag

    That's what astounds me. Not even the slightest pretense that it's not being manipulated. It's as if they don't *want* to cover their tracks - they want every trader to SEE what they're doing until they're convinced to get with the program.

  • Reply to

    NEWS is AWFUL, should be good for 1% anyway

    by hypersman Oct 29, 2015 8:39 AM
    hedgehog25 hedgehog25 Oct 29, 2015 9:23 AM Flag

    Yeah, you'd think, wouldn't you?

    But more proof of the economy stalling = expectation of no rate hike = RALLY RALLY RALLY.

    It's hard to believe that at these levels we're still in "everything is bullish no matter what" mode, but we are. A real *market* in the true sense of the word, would head straight down.

  • Someone needs to contact them. Their real time S&P 500 futures chart is being displayed upside down. They need to fix that.

  • hedgehog25 hedgehog25 Oct 29, 2015 12:49 AM Flag

    That the ice caps are melting is not nonsense, and this prediction is a completely reasonable one. It's only people of the converse religion who knee-jerk to deny things such as the overall warming trend, the melting of the ice caps and glaciers, and rising sea levels, for ideological reasons.

    The irony is that people of your religion, in denying the plain facts, are tacitly accepting the false narrative advanced by the HGW religion, and simply denying the facts, which is why you're written off as ignorant kooks with no credibility.

    A better answer to stories like this than covering your eyes and ears and denying that it's happening, is to point out that the warming trend and the melting of the ice caps has been progressing, in fits and starts, over the course of more than 10,000 years, not just since human industrialization, and that the rate of warming has at times been significantly faster than in the last 150 years. Also, that there's good evidence that this is not the warmest period in recorded human history.

  • Reply to

    Why is moneyprinting fine

    by blutarsky_food_fight Oct 28, 2015 10:07 PM
    hedgehog25 hedgehog25 Oct 28, 2015 10:12 PM Flag

    Because if you hand out money to the average Joe, it's socialism and a welfare state. But if you hand money to the banks, it's "loose fiscal policy".

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