Every sentence in that reply is a non sequitur. You seem to be one of those people who read all sorts of meanings, implications, and motivations into what other people say that aren't there.
Seriously, not one word of what you just said is in any way responsive or logically related to any of what I said.
Besides, you're blowing this way out of proportion. All I did was make an observation and express mild annoyance about it, and you insist on making a big to-do about it. You're really making a mountain out of a molehill.
"You want to fret about this, fine."
False assumption and posturing. You're arbitrarily reading thoughts and feelings into my words that weren't actually expressed.
"The stock was in the 11s recently, and now it's in high13s and 14s. Next pop, it goes back up to 18 or more."
That's nice. That's factually correct, but it has absolutely no relevance to the topic.
"You seem to be missing the forest for the trees."
Nonsensical assertion that's not based on anything I actually said, so it can only be based on false assumptions you're making why you presume I said it, or what you presume I think.
"got better things to do than worry about a stock that is doing just fine compared to where it just came from."
That doesn't contradict or in any way address anything I said, so it's apparently a response to your own assumptions about why you think I said it and what thoughts you think are behind it.
"It's been on lists of most volatile for a long time"
Again, factually correct, but completely unrelated to the topic.
"so if you can't handle that"
Nothing I said in any way indicates that. This is just more conclusion-jumping and gratuitous reading of thoughts and feelings into what I wrote that weren't actually expressed in the words.
"Long-term, even near-term, it's solid."
I agree. Duh, why do you think I'd keep accumulating the lower it goes if I didn't think that? And again, completely non-germane to the topic.
I'm not brand spanking new at this, and no, it's not common it all to have this exact same pattern over and over and over for even a few consecutive days, let alone for two weeks straight. If you disagree, I challenge you to point out a single other example.
What I'm saying is a lot more specific than simply "pops, then pulls back; pops, then pulls back". That can describe almost every stock regardless of the trend.
But for the last two weeks, every single day without exception EYES has a big spike first thing in the morning, never lasting past 10, and then for the rest of the day it slides and slides and slides to close well below the morning spike. Same intra-day pattern, day after day after day after day. Very annoying.
I haven't sold any spikes yet, I've only accumulated the lower it goes, but maybe I *should* start selling spikes and re-buying lower, like everybody else apparently. :|
The big drop yesterday covered the return to inventory builds while driving season isn't even over. As I said before the report, I'd have expected even a drawdown to send prices down if it wasn't over 2m bbl, so a *build* of over 2m was drastically bearish, and the reaction was by no means overdone. Also, it was a technical breakdown from the trading range of the last two months.
Seriously, do yourself a favor and stop looking for an entry point for buying USO. It seems like you're in a rush to get in because you're afraid you're going to miss the boat, but at least in the short term it's going nowhere but down. Even if it levels off, the upside potential is VERY limited. Unless a major regional war breaks out in the Middle East or something of equal magnitude happens, the chance of WTI reaching 65 this year is NIL, whereas that chance of it dropping under 50 is pretty high. Under 55 is practically certain.
Also, since there's no reason to believe that the supply glut will be resolved this year, high contango is here to stay, further eating away at the NAVs of oil ETFs. The only way I can see the glut being alleviated in the foreseeable future is by higher demand due to sharply lower prices. So either way you lose going long oil ETFs.
Agreed. I was kicking myself yesterday for waiting to fill up my tank when I should know that prices get jacked up for 4th of July weekend, then I laughed at myself for even giving a moment's thought to the cost of gas for a lousy 16 hours of driving when I'm holding a boatload of DWTI.
...and the falling rig count is the ONLY thing that's been propping oil prices up, because it was fueling expectations that production will start to decline soon. With production still increasing, supply still outstripping demand, inventories still near record levels, and now both an inventory build during peak driving season *and* an increase in the rig count, oil prices have nowhere to go but down.
And if the 4th of July weekend doesn't produce a sharp drawdown and the rig count isn't down again next week, it's back to the 40s FAST.
I still see 40 as the floor, *maybe* the upper 30s at the absolute lowest, but if things keep going the way they have been into the fall, maybe all that crazy talk about $30/bbl will actually come true!
If it does, THAT will be the time to start talking about "a great buying opportunity", instead of after every big down day.
The key to whether it paid off is whether you day traded the technical bounce, or you're holding on expecting a trend reversal.
I day traded the technical bounce myself by trimming some of my short position and re-adding this morning, but I wouldn't touch it on the long side with a 20 foot pole unless it's under 52 at the absolute highest. At anything above that, it's just a toss of the dice, because the trend remains decidedly downward.
It spikes up in the morning, then slides and slides and slides the rest of the day, sometimes with a much smaller spike at the close and sometimes without. I think for at least 8-10 consecutive days now.
I suppose I shouldn't care about the day-to-day fluctuations on this one. I'm not in it for a quick flip, I'm in it for what happens when they announce a breakthrough in hooking a prosthetic device directly into the brain. But I'm more used to trading than investing, so seeing green every morning and watching it slip away all day, every freaking day, is driving me nuts.
Oh, well...*someday* there'll be an uptrend again. Maybe Cramer's monkeys will start jumping in, he did say to buy it under 14. ;)
Sentiment: Strong Buy
Their opinions are worth nothing, but the information they provide can be very useful. They publish a lot of well-researched articles. Then get the conclusion about what trades to make wrong half the time. So just read it for information and ignore the advice.
I don't think you understood what he meant. "Blood in the street" doesn't just mean a really bad day or a short term pullback off the recent highs.
"many traders are scared of buying oil now"
If this board is any indication, there are a lot more people thinking this is a great buying opportunity than scared.
"Blood in the street" refers to when those who jump on "great buying opportunity" after "great buying opportunity" and keep averaging down finally throw in the towel (figuratively jumping out the windows of tall building, hence the blood on the street). We're nowhere near that point with oil.
Also, never forget that oil futures are not stocks, and prices are subject to the underlying fundamentals to a much greater degree, not just to trader sentiment and *perception* of the fundamentals.
" In the short term, after a major drop technically there is a bounce, however, many confuse the bump as a change in trend."
I'm sure a lot of people are thinking that right now. I'm sure they'll be disappointed.
Suit yourself, but I think you'd be better off doing the same thing you did last night: nothing.
First of all, this selloff was primarily due to the inventory build despite peak driving season, not the Greek default. While I wouldn't get too excited about it unless next week confirms that the trend has returned to sustained inventory builds, because if I'm not mistaken there's usually a lull in driving the week before a holiday weekend and we need to wait and see if the holiday weekend makes up for it, it does serve as a warning shot that the glut isn't likely to be alleviated between now and the drop in demand that comes in the fall.
As far as Greece is a factor, the fact that it has been in trouble for years is irrelevant, because the effect Greece has on oil prices, unlike on stock prices, is not primarily a matter for trader sentiment. It's a matter of the effect on currency markets. The Greek default will necessarily devalue the Euro, which will boost the exchange rate of the dollar, reducing the price of oil in dollars. That's a factor that for the most part influences the price only after it actually happens, rather than being priced in in advance, even if traders see it coming from miles away.
But on the subject of trader sentiment, WTI is on the verge of a technical breakdown. That's generally a very poor time to open up a long position. If it goes even a little lower than this, which looks overwhelmingly likely, it's almost certain that the slide will continue at least until it goes under 55.
Yeah, but "buy the farm" isn't too far off base for what's going to happen to people who sink a lot of money into USO right now, and especially those who did over 20. The expression that really fits best is "lose one's shirt"...
@williamdscroggins I want to make sure it's clear, I'm not saying oil prices are "range bound" as in a *trading* range. I'm not talking about the trading range of the last two months that brohicious was referring to.
What I'm talking about is that *fundamentals* cap the upside approximately in the low to mid 60s, high 60s at the absolute most, and limit the downside approximately in the mid to low 40s, with the outside possibility of high 30s at the absolute lowest.
So I'm not now saying "Hey, look! We're at the bottom of the range! Time to cover and go long." This slide has plenty of more room to the downside, and in fact I think the bottom of the recent trading range is likely to be broken in the next few days. If production doesn't start decreasing soon, it could go back to the mid 40s, the point at which all shale projects are underwater and OPEC production cuts loom on the horizon. From there, the downside will be just as limited as the upside is limited in the low 60s.
"the ones who celebrate their own erudition and treat the market like an essay writing contest"
You're probably not clear on the term, since you don't seem to be clear on much of anything, but that's the essence of what "inferiority complex" means. You project motivations onto other people that reflect your insecurities about your own inadequacies rather than any genuine insight into those people's motivations.
I'm here to discuss financial markets and trading (Hello?? Isn't that the purpose of these boards?). Like it or not, I write in the manner that comes to me naturally, not as a result of carefully planning out essays and selecting wording that I think will impress others.
You regard it as a celebration of my erudition and treating the market like an essay writing contest because seeing intelligent discussion that's beyond your abilities makes you feel small, but you don't want admit that to yourself, so you insulate your ego by turning it around and projecting pompous motivations onto the people who write it.
But your comments about me and other people you resent simply for having a greater ability to contribute to discussions than you do are a reflection of your own feelings of inferiority, not those people's actual motivations.
"tend to flame out very quickly. "
LOL...take a look at my posting record, I've been doing this for nearly a decade. Made my share of rookie mistakes early on, but learned from experience. It may make you feel better, in a petty way, to fantasize about me flaming out, but I'm going to be quite happy to disappoint you. ;)
Let's make sure we're clear on the terminology, because I get the impression that you're applying a common misuse of the terms contango and backwardation, in reference to upward and downward sloping futures curves, respectively. Those are properly called "normal" and "inverted" curves, respectively.
When I say "contango" and "backwardation", I'm talking about *actual* contango and backwardation, which refer to the prices of futures contracts relative to expected future spot prices. In a contangoed market, futures are priced at a premium to expected future spot prices, and in a backwardated market they're priced at a discount to expectations. Contango is primarily the effect of storage costs; backwardation is primarily caused by anticipation of short term supply shortages.
While a normal (upward-sloping) futures curve is a disadvantage to futures ETFs, due to the effect of rolling over contracts to successively more expensive contracts, contango/backwardation are more significant. That's because in a contangoed market, futures contracts underperform spot prices regardless of which way prices go. Whereas the theoretical advantage of an inverted curve is useless in a non-backwardated market, because without backwardation an inverted curve is necessarily caused by anticipation of a decline in price, and that decline negates any gains you may get from rolling over to cheaper contracts. And keep in mind that the market can still be contangoed even when the futures curve is inverted (what you seem to be calling "backwardation").
With inventories near record levels and drawdowns during peak driving season too small to alleviate the glut, the chances of oil futures going into backwardation are just about nil. Contango is here to stay for the foreseeable future, even if the futures curve becomes inverted (which can only happen if the aggregate opinion of traders is that prices are at an unsustainable level), and will continue to eat away at the NAV of oil ETFs over time.
Contango has narrowed somewhat, but I don't think it's all that small. The slope of the futures curve was less steep when prices were in the 60s (at the time when you posted this), I contend that this wasn't due to lower contango, but due to an aggregate expectation among traders that the price would decline (a valid expectation, as we're now seeing).
*eye roll* Spare me your inferiority complex.
I looked through your posts and they consist almost entirely of peanut gallery style catcalls like this one. You don't seem to have much substance to contribute, on any board.
There's no need to be snide just because you know that a celebration of *your* intelligence couldn't possibly be cut too short (zero words would be an appropriate length).
I didn't do anything either, which means I just kept holding my short position (DWTI). I'm even more glad. ;)
If the EIA report confirms this tomorrow, or even comes in flat or shows a drawdown of less than 2m bbl, oil prices will go into a tailspin for the rest of the week.
I really think there are only two ways to play oil right now:
2. Wait on the sidelines
Not gonna happen. I suggest you cover your short when it drops below 55. If you're a gamblin' man, maybe hold out for the low 50s. Anyone who stays short below 50 (if it even gets there) is a fool. Anyone who stays short below 45 is a nut job.