Oil Carnage and What to Expect from Here....
Well I'll not say that this was not likely to happen because I told you that it was. I posted a chart below where you can see where the order flow and the movement is being controlled by. I would be looking long anywhere around this area to the 53 area. 56 is the magic line that will be controlling oil since it moved above the 48 level that was controlling it for so long before.
It is not too hard for it to tank hard when the Dollar is rising. This is FED policy at the moment. From where it is it can be manipulated safely to the 53 level before the previous area will kick in to play. 58 is the number I was looking for and we are there.
However it could fall further.
You see it made no sense at all for it to be where it was any more than it made any sense for it to be at the 40 level. Oh sure the pundits that are experts on everything will tell you otherwise and all that other fundamental crap but it comes down to price. I mentioned that it might hick up to the 57 area or slightly above. It managed to hit 66 which I was not surprised to see but once the shorts were shaken, down she came. This is what I talk about when I say chasing price higher with limited upside potential. I have been telling you this for a long time. You know it hits 57 and you start seeing 70 or 100 instead of thinking that why would it go there.
Look for it to stay between 48 and 67 for a while. The new normal as it allows some more exploration and risks to be taken. Above that it gets too costly for consumers.
Oil is not the be all end all energy. In fact its days as a way of producing the most energy are numbered. To say there is not some technology out there capable of producing energy more efficiently than oil at the moment is foolish. I am sure that it has existed for quite some time but because the vast underdeveloped areas of the world still rely on oil (as do a lot of corrupt economies) it is allowed to be the show piece still.
Supply and demand have absolutely nothing to do with price. I doubt that it ever has.
With consumer debt levels where they are at the moment 80 dollar oil is not a realistic price. That is how debt collapses happen. With the Dow moving down sharply again oil is following. So is a lot of other commodities that had their day in the sun. Palladium, Platinum and Uranium are prime examples.
Now as I said you may wish to try your hand long in this area. Perhaps with a stop at 55. The market has clearly turned direction and this is fact. It is bearish now until proven otherwise. That won't happen unless it makes new highs or at least gets above 63.95 area. What you are looking for here is a bounce. That is it.
How high?
Maybe 64 but not a lot.
You could wait which would be the smart thing for another leg down rather than risk. However if you are going to risk then this is the area.
Cheers!
It is not too hard for it to tank hard when the Dollar is rising. This is FED policy at the moment. From where it is it can be manipulated safely to the 53 level before the previous area will kick in to play. 58 is the number I was looking for and we are there.
However it could fall further.
You see it made no sense at all for it to be where it was any more than it made any sense for it to be at the 40 level. Oh sure the pundits that are experts on everything will tell you otherwise and all that other fundamental crap but it comes down to price. I mentioned that it might hick up to the 57 area or slightly above. It managed to hit 66 which I was not surprised to see but once the shorts were shaken, down she came. This is what I talk about when I say chasing price higher with limited upside potential. I have been telling you this for a long time. You know it hits 57 and you start seeing 70 or 100 instead of thinking that why would it go there.
Look for it to stay between 48 and 67 for a while. The new normal as it allows some more exploration and risks to be taken. Above that it gets too costly for consumers.
Oil is not the be all end all energy. In fact its days as a way of producing the most energy are numbered. To say there is not some technology out there capable of producing energy more efficiently than oil at the moment is foolish. I am sure that it has existed for quite some time but because the vast underdeveloped areas of the world still rely on oil (as do a lot of corrupt economies) it is allowed to be the show piece still.
Supply and demand have absolutely nothing to do with price. I doubt that it ever has.
With consumer debt levels where they are at the moment 80 dollar oil is not a realistic price. That is how debt collapses happen. With the Dow moving down sharply again oil is following. So is a lot of other commodities that had their day in the sun. Palladium, Platinum and Uranium are prime examples.
Now as I said you may wish to try your hand long in this area. Perhaps with a stop at 55. The market has clearly turned direction and this is fact. It is bearish now until proven otherwise. That won't happen unless it makes new highs or at least gets above 63.95 area. What you are looking for here is a bounce. That is it.
How high?
Maybe 64 but not a lot.
You could wait which would be the smart thing for another leg down rather than risk. However if you are going to risk then this is the area.
Cheers!
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