4 replies to this topic

[optionking]

Noticed COTS are very very heavy bearish on OIL. Does it look like oil is ripe for a nice pullback in the next several weeks? Might be a good short.

[ChickenLittle]

NimbleBear pointed out this interesting blog to me. The gasoline crack spread had a positive influence on rising oil prices and now the spread is falling. Will it cause oil to fall too??? . . . "It is also notable, considering the view by most that oil can only go higher, that the gasoline crack spread has collapsed 40% in five days and is down 17% just today. Moreover, the spread has plunged 57% from the highs seen in mid-May, around when gasoline futures peaked for the year. As well, gasoline futures are dropping another 3.5% today and convincingly breaking down through the uptrend that has been in place since December of last year. The contango in the oil futures market, which encouraged hoarding, is also beginning to reverse meaningfully for the first time in years. This is also occurring when crude oil large speculative traders have never been more net long oil futures and commercial hedgers, historically the “smart money,” have never been more net short oil. I suspect we are within six weeks of another major tradable top in oil, similar to the one seen last year before the commodity plunged $28 per barrel in less than six months. Like last year, this decline should provide another huge upside catalyst for the broad market. I plan to meaningfully increase my energy-related short exposure again over the next six weeks. I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, buyout speculation and lower commodity prices."

[thespookyone]

" I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, buyout speculation and lower commodity prices." Well, since it was the higher prices in commodity prices that pushed the market up(oil stocks were quite clearly the big SPX "engine")=you may have a problem there. As far as buyout speculation goes, don't you think the ship has sailed there, considering that there are buyouts that were thought to be in the bag already rolling over?

[ChickenLittle]

" I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, buyout speculation and lower commodity prices."

Well, since it was the higher prices in commodity prices that pushed the market up(oil stocks were quite clearly the big SPX "engine")=you may have a problem there. As far as buyout speculation goes, don't you think the ship has sailed there, considering that there are buyouts that were thought to be in the bag already rolling over?

I should have included the link to the writer of the blog.

http://www.hedgefundmgr.blogspot.com/

[phloat]

Noticed COTS are very very heavy bearish on OIL. Does it look like oil is ripe for a nice pullback in the next several weeks? Might be a good short.

Geopolitics aside
my simplistic chart seems to be playing out..

hope the annotations are visible haven;t changed anything over the last few weeks.
the H&S bearish scenario did not play out

http://stockcharts.com/h-sc/ui?s=$WTI...&a=82593027


break above yesterdays high would probably hint at an attempt for the previous high of last year c.$80
otherwise probably a return to the blue trend line. If that fails we may be opening up for a nice IT downtrend
toward high 40s low 50s again. Seems to be an established seasonality trend of last few years. Repeat? ..
dunno.

wednesday today its crude and gasoline stock reporting day.. That will be the trigger for any ST direction i think.