70 comments on POLL: CLU08 went through $114/bbl..so, in the next 60 days, the front month price of CL will...
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70 comments on POLL: CLU08 went through $114/bbl..so, in the next 60 days, the front month price of CL will...
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I was one of those who was wrong on the last poll after being right on several polls.
The commodities markets have broke down and need to find support. This is not only true of crude oil but also ethanol. Likewise grains confirm the reversal in that corn and soybeans as well as other grains have broken down. While the grains are not like crude oil they are somewhat related in that corn is used for ethanol and soybeans for biodiesel.
The economy is clearly in recession with auto makers in free fall and a local company Winnebago Industries dumping workers and putting many on shorter working hours.
The Rule in speculation, and that is what trend following is mostly, is to go with the trend. And when the trend reverses do not go into denial. Just accept it and follow it until it reverses which it will just as the uptrend reversed. Down is quicker as all the longs panic to get out of their wrong positions.
It may take some time for this downtrend to reverse since a new bottom has to be formed. It seems to me that harvest lows in the grains and the election of Barack Obama as President may put in the low. The Fed is impotent as is the oblivious lame duck President and Congress.
Overextended people who are living hand to mouth are in shock just like the banks and both are in survival mode.
Baring hurricanes and war this downtrend may last awhile.
Well that's the trick isn't it?
Its probably better than 50:50 that a hurricane threatens the oil infrastructure. Georgia just seems to get worse and worse as Russia goes for empire building undercover of the Olympics. If the neocons are going to hit Iran, it has to be soon. Oh, and OPEC meet again in September.
Oil prices react significantly to relatively small changes in the supply/demand balance - as befits oil's inelasticity. We've seen reductions in demand from one market swinging the price southwards, but any comparable reduction in supply will shoot up the price until we are again in uncharted territory (its easier this time).
Money into futures and a nice bet on $150 by the end of September would seem to be the smart move at the moment.