Catalyst for oil going much lower... consider Withing , drop of 19%. watch the next couple days. Can't refi their fracking debt, big boys won't buy them, want to wait until their value is low, or buy it off a bankruptcy trustee judge for pennies on the dollar, just like Mr. Potter in "It's a wonderful life". Could only be the beginning of the end. Trustee says keep pumping, have to pay creditors. Supply has to stay at max, with oil prices lower and lower. Oil could go way lower, as these small caps huge fracking companies fail, and as they fail, THEY JUST KEEP PUMPING THE IL BECAUSE THE GOVERNMENT (AKA bankruptcy judges) TELLS THEM THEY HAVE TO. Charts with the two bear flags are in real trouble. The saudis know all this, why stop pumping, it won't do any good anyway, no one will stop pumping it, they know this is coming. They keep up the pressure, go lower, and lower, they can handle it, and the pumping will stop when all the companies have failed, but that might take a while. Just saying.
Comments
jangseohee
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Hi claydoctor, fall further right :-)
claydoctor
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Yes Jang.
claydoctor
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I am not shoting WLL, as it just had its big gap, and will probably consildate, and high risk until coinfirms heading lower still. If WLL goes lower, it is heading right toward being worthless. Hard to imagine, but very possible. I am studying other similar plays, comparable companies, that have not had their gap down yet. Each will reach its critical point where sales are bad, debt high, they cannot restructure the debt, and whoever they would sell to will just say no, and wait like a vulture until its about dead, and buy low. More research required, but looking at SLCA, who supplies fracking equipment. Look for high shorts, high debt, fracking dependent companies. Do your homework.
claydoctor
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And if oil price barrell goes much lower, that alone could be the tipping point for many of these small caps, you just have to do homework, and watch for those actually tipping their hand.
claydoctor
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and hopefully short them before the world does, right before their down gap. and you knows, low percentage, oil goes higher, and saves these companies, but doubt it. Hey there is risk in everything.
claydoctor
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final thought, looking for similar chart patterns to WLL to short. All oil companies do not share this pattern.
claydoctor
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actually very last thought, watching the pair eurusd, and the dollar itself , eurusd tied to oil price for a while now. It goes lower, suggest oil goes lower too. Until the dollar really reverse, oil goes lower IMO.
Michelltrading
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so you would short the stock? Im a little unclear on what your play is
loyol4
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Oil could go lower? How much lower? If fracking companies fail, who will then be pumping the oil? Just wondering...
claydoctor
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The companies will go bankrupt, and the court will appoint a trustee to handle their debts, and appoint a receiver to run the company, to keep the wells pumping so their creditors can get paid. They won't just shut the doors and turn off the pumps, the creditors will demand it so they can get more than just the selling price of the company, by then will be wort less, or worthless. And if a big oil company does not step in and buy it, and pay the creditors, and why should they, when they can buy it off the trustee for way less.