claydoctor
Long

UMTI is for me - GOING LONG OIL

NYMEX:CL1!   Light Crude Oil Futures
136 18 2
Going in to UWTI             , it is time for the oil             bounce. Don't really care if I get the absolute bottom, going Long for the long haul here. The EURUSD             pair is ready to continue rend strong up, dollar has to come down, why? Because the FED knows the strong dollar is crippling small oil             based economy nations, mid cap oil             in the US, and every leveraged oil             company with debt, mutli national corporations,... I could go on and on, so the charts are calling for this fundamental; change, super cycle demands it too ( commodities ). And if any of these rumors of war actually ignite, (China is massing troops on the korean border now?) some shipping lanes, oil             fields, or other oil             production related thing will be crippled. Also, big cash is just chomping at the bit to long oil             , they really can't wait, like it is burning a hole in their pocket, so when the buy signal happens, for real this time, it is going to be a whopper. I want in before that happens, even if we go a bit lower from here, we simply cannot go much lower. Demand may not increase, but I think supply will sooner than people think. Pigs get fat, hogs get slaughtered.
Thanks, great chart! Fundamentally, I was a bit confused by such a fast turn around in oil (and as such i got clobbered expecting a quick turn back down). USD rose along with oil. Wednesday's EIA showed increase in stock, oil brushed it off. I am starting to think it likely that this increase in oil's price is going to give the Feds the break they needed to squeeze in a rate hike in September as pathetic as that hike may be... Technically, I am keeping an eye on early 2009 price levels, am still very bearish oil and am eyeing 48.5-49.5 as a great area to lay out sales again.
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claydoctor smitheric1970
There is some artificial motivation in this rise for sure. Maybe when it has had enough of whatever effect they desired, it will stall or dip back down a bit. The rise must be credible to be believed and turn the bears off their trade though or it would have been meaningless. Inflation has got to be "named" in the media, and it will take some doing to do that, Gold finally took its cue. This run, may not have the quick and huge rises at it has, but it has to have legs, so I don't expect a turn back down anytime soon. 50 will be a big number to hit as resistance, since this is not a fundamental move... neither supply nor demand has changed dramatically.
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claydoctor claydoctor
Paradigm shift here. Fundamentals could not do it. So, it was needed, it is happening, and it will save small nations from bankruptcy. Just a thought, we could look back on this change as huge for the world economies, which is "too big to fail".
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Excellent points. I would still expect heavy distribution at the 49.5 level. A ranged area would be nice just to let the smoke clear. I am expecting the DX to decline after a rate hike and to see somewhat of a break in the DX CL correlation as I also believe CL will fall to new lows over the next year. I think small and large nations are in for some trouble. Ya I'm one of those gloom and doom guys... :) I'm very actively trying to work short oil, short equities, long Yen and long Gold into my long term models.

I enjoy your work Clay, it keeps me on my toes!
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Can you comment on UWTI decay over long haul?
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Not totally sure I understand your meaning here. I think we saw the big buy signal today, historic actually. And we will see higher highs but not as dramatic. For me this is a long term play, so I will ride the hill and valleys, since I think the credit faults will be avoided with an increase in price, and help is on the way dear, i.e. venezula today asking for help, and they will get it, why... BECAUSE OF COURSE, ALL TOGETHER NOW, THE OIL INDUSTRY IS JUST TOO BIG TO FAIL. Where have I heard that before. The only thing the oil industry needs is higher prices. So I believe either fundamentally or artificially, they will get it. Nothing like a war or two to increase the price of oil, i.e. China massing troops for a war with south korea, or maybe japan over the island disputes, and what else but oil rights. Oil, Oil, Oil, the powerful game played by tycoons and kings and queens.
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dp claydoctor
My question is much more simple, in fact. All those derivatives of WTI, like UCO or UWTI are decaying in time, i.e. given WTI constant, those derivatives will decay in time.
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Of course, by default, by long UWTI I mean probably couple of weeks, and watching daily for a break in the trend, but here the new trend once it is established is our friend.
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But seems like Dollar bounced back today.
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