By Sell Puts
As most of you might already know the black stuff that runs the world has had quite a run the past few months, beginning when the market rebounded. Initially the rise as i interpreted it was a technical rebound. THis interpretation based on markets overshooting large violent, volatile moves. My hunch for the oscillation in oils current micro trend is technical, we are stretched. I have a chart on the left of DUG, which is the ultrashort Oil&Gas, notice the vertical ovals. They highlight consolidation moves which appear in pattern. Per back testing, the trade i am pulling out of this has not been pinpointed in its entry, but in theory im looking for a move up in the stochastic signaling this thing is gonna pop to the RED line of resistance, and oscilate. Like it has done since inception. Just be aware, this could be a play. Onto other things....
On the other side of the trade, if the dollar keeps collapsing on fears of the US losing its AAA credit rating, like Jeff Friedman(his twitter) thinks so. We are in for some more turbulence.
A bit more evidence...Something interesting happened around mid April. What? The dollar fell off like a rock in an empty pool. Remember dollar lower, oil higher in the current situation hedgeAccordingly... these markets are coupled like it or not in this current environment. they could uncouple it has happened.
Rant:IF OPEC would actually start reporting how much oil is in the ground and real production numbers maybe everyone would realize OPEC is full of shit, then their influence will not matter. OIL demand will be lower in the near future, paper chasers are pushing markets up again. What im saying is i am bearish OIL, demand destruction remains.
Drumbeat: June 2, 2012
5 hours ago
