Long term view on oil - Use DWTI as indicator for long entry
AMEX:DWTI VELOCITYSHARES 3X INVERSE CRUDE ETN LINKED TO THE S&P GSCI CRUDE OIL INDEX EXCES
I've been using DWTI (Inverse of oil ) as an indicator to time oil . My projection is DWTI will hit $255 per share when oil is trading in the low 30's. At that point I will go long oil and expect DWTI to trade lower. Why DWTI? Because the structure is extremely clear to me whereas oil shows a lot of POTENTIAL bottoms. DWTI , although a derivative of real price, has very clear signals for topping, which is obviously good for oil .
Comment: This trade may become invalid. If DWTI opens above my blue box I will not initiate a trade. This definitely looks like it will happen.
Order cancelled: THE BREAKOUT IN DWTI INVALIDATES A LONG TRADE IN OIL. I'm becoming more convinced oil is headed to $22.
Comment: My "Extremely Unlikely" area is now far from extremely unlikely. I am inclined to believe that the $16 level has become more likely than the $40 level in the near future.
Ivan, show me any asset/market/instrument that decisively broke its 2009 low on the weekly timeframe, and I will bet we'll see trend continuation far deeper than we've seen thus far in oil. It is against my strategy to buy oil at ~29, so my opinion has not changed. My execution, however, has changed. Unless we close at 33-34 by months end, the cheapest I am willing to pay is $26 per barrel. But at this point I am leaning more toward 22 - 16. I have several long entry orders - first at 26. I have checked inflation adjusted crude - it certainly makes it exciting to buy long term, but again, the cheaper the crude, the more extended our leverage can get - I see cheaper crude coming.