I am close…ever so close…to putting on a feeler position in SCO. I’m sitting on Twitter, trying to coax myself into the pool.
It is difficult. Oil prices are too high. But I recognize that they can still be too high much higher from here.
In the past, I’ve been a little early to the game, and held a little too long – or too short. It’s a tough wrap, because oil should be in the $70′s. Maybe, if you are Po Pimp, you can argue for the $80′s.
But $90 oil is just stupid. It makes no sense. We’re seein a global slow down, so the key input cost to all productivity is prohibitively expensive? Sure…
So the question is – will oil get into the $100′s again?
I saw an article today from CNN, saying just that. QE and Iran – the same old argument; never mind its abject failure before now.
If these kinds of people are staking their reputations on higher prices, it makes me feel better. I’ll probably slap on a small position, but I want to see us past the morning first.
10 Responses to The 3rd Oil Short Comes Nigh
The way I feel right now, why force a trade? It’s too early as you said.
Perhaps. There’s a part of me that wants to stay ‘neutral’, but comprised of counterbalanced positions, because things like oil shorts will run much further down in a selloff than, say, real estate companies.
At least that’s the concept. Can’t say it’s worked too well up until now.
This time we’re on the same page. Oil is on day 40 of a 50 to 70 day cycle trough to trough, so it should peak and start down into the trough any day now. The dollar is also in the timing band for it trough and should start up as Oil heads down.
One more thing: Once we get a swing high in OIL and a swing low in the dollar, I’ll take that as my cue to buy some SCO. Also, just so you know the dollar has been hard to figure out. It’s either on day 14 or day 24 of its cycle, which goes 18 to 28 days trough to trough. In either case, it should bounce in the not to distant future. We almost had a swing low today, but not quite, so I’m guessing we go down a bit more before we get our swing.
One caveat .. if the Clam initiates QE3 at Jackson Hole next weekend, these cycle counts get re-phased and we can buy OIL hand over fist as the dollar might then drop for another 10 weeks into its intermediate cycle low. So once again, we are hostage to the clam.
Naturally. The clam swings a big stick.
Do you always regurgitate Gary Savages analysis?
I guarantee you Gary Savage is not the only person to realize oil swings with the dollar, and that the Fed can usher in hyperinflation.
Not referring to you.
I know good sir. I’m saying give Hawaii the benefit of the doubt.
It stings rather hard, being told you cannot think for yourself.