A Good Time To Get Into Oil?

[teacup]

teacup

you were right on the money about this

how does one determine the bottom?

(and the top too? did you get out or short at 150?)

did we not yet see a bottom when it dipped below 50 last week?

i see this as a great opportunity but obviously know too little about it, yet

i am thinking about index funds for safety and dividends and a bit of futures (the longest term available) for leverage

insights please

PS some great posts here

thanks

I don't read news blah blah blah....I go with what the technical analysis from various trading charts and graphs are showing me

This is "for me" at least , the best way to monitor the movements of the big institutions at the same time as well.

The institutions always get-in or out-----waaaay before any leakage of the good/bad news to the public.

Wow...."short term"....looks very good on the upside....techically speaking

I don't think it will go to the old peak again

I'm waiting until the end of the year, to see the medium term direction ---technically

Disclaimer: I'm not right all the times, only the higher probability of being right - most times

[neverdie]

Problem is they have cut output and price is still dropping. They are stuck and this is a good thing.

And there is another ouput cut on the cards in December, OPEC, more specifically Saudi, want a price of around $75/barrel, which they consider is fair.

If the price isnt pushed up, marginal fields currently operating will not be able to produce at such a low price, oil companies will not invest in new CAPEX projects, and as a result prices will utlimately go a lot higher than recent $150/barrel in the long term.

Worldwide supply from "easy" sources is declining, the resource is getting harder to get at...ie oilsands, deep water drilling etc...therfore to sustain this development from the more difficult sources, the oil price needs to be at around $70-$80 barrel or just not worthwhile doing...

So in some repects its not a good thing...

Its rather amusing that they suddenly think that $75 a barrel is fair (when demand obviously dictates another price). Its also interesting that OPEC countries which control approximately 40% of the worlds output cant even stick to their own rules when it comes to slashing the amount of oil being drilled.

I wonder if the US Government would consider selling some of its oil stocks to help solve some of their finanical problems, has anyone ever stopped to consider what they've pumped under the ground, what it cost them to do so and how much its worth now?? Or is George W Bushturkey going to get that oil as some sort of bonus for doing a sweet n dandy job of helping to destroy the US economy.

[lannarebirth]

So, you folks "getting into oil", where do you store it?

[deejah]

starting my due diligence on oil research

came up with this gem:

The future options are these: zero economic growth for perhaps a decade, or oil back towards its all-time high of $147. Take your pick.

from thismoney.uk.co

so probably none of the above, eh?

[Hairy]

So, you folks "getting into oil", where do you store it?

In an E*Trade account.

[lannarebirth]

So, you folks "getting into oil", where do you store it?

In an E*Trade account.

hmmm, E-Trade fell 19.26% yesterday. Good luck.

[VegasVic]

starting my due diligence on oil research

came up with this gem:

The future options are these: zero economic growth for perhaps a decade, or oil back towards its all-time high of $147. Take your pick.

from thismoney.uk.co

so probably none of the above, eh?

deejah, Aren't you the same fellow who started this thread 2 1/2 months ago by posting that you felt oil at $100/bbl was a good investment? Its too bad you didn't take my advice back in July and shorted oil like I did, you could have made a killing already instead you seem to keep on digging yourself a deeper hole my friend. Admit you are wrong and take your loss on your oil investment already, oil is trading at $47.80/bbl as I post here and is headed lower. I think that Deutchebank had it right the other day when they stated that oil was headed to the $35-$40/bbl range over the next 6 months. Sorry for your losses DJ!

[deejah]

some interesting technical analysis

i think updated weekly

last 2 weeks seem generally bearish according to this site

Analysis

Fri 12/5/08

Mov Avg-Exponential Indicator:

Conventional Interpretation: Price is below the moving average so the trend is down.

Additional Analysis: Market trend is DOWN.

Mov Avg 3 lines Indicator:

Note: In evaluating the short term, plot1 represents the fast moving average, and plot2 is the slow moving average. For the longer term analysis, plot2 is the fast moving average and plot3 is the slow moving average

Conventional Interpretation - Short Term: The market is bearish because the fast moving average is below the slow moving average.

Additional Analysis - Short Term: The market is EXTREMELY BEARISH. Everything in this indicator is pointing to lower prices: the fast average is below the slow average; the fast average is on a downward slope from the previous bar; the slow average is on a downward slope from the previous bar; and price is below the fast average and the slow average.

Conventional Interpretation - Long Term: The market is bearish because the fast moving average is below the slow moving average.

Additional Analysis - Long Term: The market is EXTREMELY BEARISH. Everything in this indicator is pointing to lower prices: the fast average is below the slow average; the fast average is on a downward slope from the previous bar; the slow average is on a downward slope from the previous bar; and price is below the fast average and the slow average.

Bollinger Bands Indicator:

Conventional Interpretation: The Bollinger Bands are indicating an oversold condition. An oversold reading occurs when the close is nearer to the bottom band than the top band.

Additional Analysis: Volatility appears to be declining, as evidenced by a decreasing distance between the upper and lower bands over the last few bars. The market appears oversold, but may continue to become more oversold before reversing. Look for some price strength before taking any bullish positions based on this indicator.

Volatility Indicator: Volatility is in a downtrend based on a 9 bar moving average.

Momentum Indicator:

Conventional Interpretation: Momentum (-66.08) is below zero, indicating an oversold market.

Additional Analysis: The long term trend, based on a 45 bar moving average, is DOWN. The short term trend, based on a 9 bar moving average, is DOWN. Momentum is in bearish territory. And, the market put in a 45 bar new low here. More lows are possible.

Rate of change Indicator:

Conventional Interpretation: Rate of Change (-61.82) is below zero, indicating an oversold market.

Additional Analysis: The long term trend, based on a 45 bar moving average, is DOWN. The short term trend, based on a 9 bar moving average, is DOWN. Rate of Change is in bearish territory. And, the market put in a 45 bar new low here. More lows are possible.

Comm Channel Index Indicator:

Conventional Interpretation: CCI (-124.27) recently crossed below the sell line into bearish territory, and is currently short. This short position should be covered when the CCI crosses back into the neutral center region.

Additional Analysis: CCI often misses the early part of a new move because of the large amount of time spent out of the market in the neutral region. Initiating signals when CCI crosses zero, rather than waiting for CCI to cross out of the neutral region can often help overcome this. Given this interpretation, CCI (-124.27) is currently short. The current short position will be reversed when the CCI crosses above zero. Adding bearish pressure, the market just put in a 45 bar new low.

RSI Indicator:

Conventional Interpretation: RSI is in neutral territory. (RSI is at 21.67). This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone.

Additional Analysis: RSI is somewhat oversold (RSI is at 21.67), but given the 45 bar new low here, greater oversold levels are likely.

MACD Indicator:

Conventional Interpretation: MACD is in bearish territory, but has not issued a signal here. MACD generates a signal when the FastMA crosses above or below the SlowMA.

Additional Analysis: The long term trend, based on a 45 bar moving average, is DOWN. The short term trend, based on a 9 bar moving average, is DOWN. MACD is in bearish territory. Further, the market just put in a 45 bar new low here. More lows are possible here.

Open Interest Indicator: Open Interest is trending up based on a 9 bar moving average. This is normal as delivery approaches and indicates increased liquidity.

Volume Indicator:

Conventional Interpretation: The current new low is not accompanied by increasing volume, suggesting that the current move lacks broad participation. Look for a rebound soon.

Additional Analysis: The long term market trend, based on a 45 bar moving average, is DOWN. The short term market trend, based on a 5 bar moving average, is DOWN.The current new low is not accompanied by increasing volume, suggesting that the current move lacks broad participation. Look for a rebound soon.

Stochastic - Fast Indicator:

Conventional Interpretation: The SlowK line crossed below the SlowD line; this indicates a sell signal. The stochastic is in oversold territory (SlowK is at -0.10; this indicates a possible market rise is coming.

Additional Analysis: The long term trend is DOWN. The short term trend is DOWN. Don't be fooled looking for a bottom here because of this indicator. The stochastic indicator is only good at picking bottoms in a Bull Market (in which we are not). Exit short positions only if some other indicator tells you to.

Stochastic - Slow Indicator:

Conventional Interpretation: The SlowK line crossed below the SlowD line; this indicates a sell signal. The stochastic is in oversold territory (SlowK is at 2.35); this indicates a possible market rise is coming.

Additional Analysis: The long term trend is DOWN. The short term trend is DOWN. Don't be fooled looking for a bottom here because of this indicator. The stochastic indicator is only good at picking bottoms in a Bull Market (in which we are not). Exit short positions only if some other indicator tells you to.

Swing Index Indicator:

Conventional Interpretation: The swing index has crossed zero, identifying this bar as a short term pivot point.

Additional Analysis: No additional interpretation.

Important: This commentary is designed solely as a training tool for the understanding of technical analysis of the financial markets. It is not designed to provide any investment or other professional advice.

Note: The above analysis is computer generated from mathematical formulae, and is provided for educational purposes only. Neither the above, nor any information on this site is intended as a trade recommendation.

from futures trading charts dot com

also read a great article on the oil drum dot com

one great point is that things tend to swing in exaggerated directions

cant help but think there is a great opp here

the trick is knowing when to get in (and out)

[Gary A]

You thought $100 was a great place to get in. You'll have to excuse me but I think my guesses are at least as good or better than yours.

[Naam]

You thought $100 was a great place to get in. You'll have to excuse me but I think my guesses are at least as good or better than yours.

and that goes for my dog too

[Gary A]

You thought $100 was a great place to get in. You'll have to excuse me but I think my guesses are at least as good or better than yours.

and that goes for my dog too

Your dog probably has more money than I do. At one time I imagined myself to be an astute investor. As of today. I am down 60.86 percent. The only thing I have learned is that the stock market is no place for a little guy. Fortunately the only people getting hurt from me being naive is my kids. They are going to inherit a LOT less than planned.

To look at the bright side of it, I have lost nothing YET. It will get better or it will get worse. If it gets worse I still won't miss any meals. If it gets better, what's the difference?

[kimmy]

I have broker guru kind of guy, works only with speeders and options and made 230% since January 2008. Buying selling long or short in a few days up to a couple of weeks. He bought oil long last Friday stop/loss 30 usd a barrel, and T-bond short, another bubble waiting to burst?? Anyone a comment on the T-bond short investment?

Edited December 6, 2008 by kimmy

[lannarebirth]

I have broker guru kind of guy, works only with speeders and options and made 230% since January 2008. Buying selling long or short in a few days up to a couple of weeks. He bought oil long last Friday stop/loss 30 usd a barrel, and T-bond short, another bubble waiting to burst?? Anyone a comment on the T-bond short investment?

A couple of comments. What is a speeder? Also, your broker bought oil last friday as it traded between 54-56 $USD/bbl (presumably QM futures) and has a stop loss at 30? My question is, what, is he nuts or something? Yes T-Bonds are in a bubble. Smart traders go short when the bubble bursts rather than trying to guess when that may be. Chok Dee

edit: I can't let this go, as oil has fallen 25% in one week since this "gurus" entry, presumably in leveraged derivative instruments. Stop loss another 20% lower, while time premium slips away as well. That's insane man.

Edited December 6, 2008 by lannarebirth

[Briggsy]

last year when oil fell to 60 a barrel

(I had only seen such a dramatic decline once in many years around 97-98 i think)

i told everyone i know to invest in oil

i had no idea the payoff would come so soon

now that its around 100

i cant help but think its a good time to get in

futures and options to leverage your money

3 years out or more if possible

index or dividend paying funds for more protection

your thoughts

thanks and juk dee (god luck)

Good job I never listened to you.

yes buy oil now, lots of it!

no, get out, short sell oil, run for the hills!

That's a sensible forecaster. I like his style.

The problem is not the oil production, but a lack of refining capacity. Rather strange when you consider Iran. An exporter of Crude but an importer of petrol.

However BBC News World has just said that OPEC will cut production at the next OPEC meeting. They are targetting a price of 75US$ per barrel.

OPEC are unable to control the world oil price as they don't even have half the world's supply and there too busy shafting one another. $75 quote from the Saudis is more of a starting negotiating position. They can't and won't get it in the next few months.

I have broker guru kind of guy, works only with speeders and options and made 230% since January 2008. Buying selling long or short in a few days up to a couple of weeks. He bought oil long last Friday stop/loss 30 usd a barrel, and T-bond short, another bubble waiting to burst?? Anyone a comment on the T-bond short investment?

You are addicted to jargon. Probably talking out of yer arse. Sounds like your 'broker guru kind of guy' lost a load on going long on oil, particularly if in leveraged funds.

[Mosha]

OPEC meets this week, a reduction in production is expected to try to force up the price.

[EvilDrSomkid]

I don't know about you guys, but its OK for me to pay only 25baht per liter for bensin 95. In July it was 40+.

Other than that, I have no idea what oil will do, but I do know this. After the global crisis eases and people want more fuel, the bbl price will go up again, big time. The question is when, of course.

I would guess that the (US) market will wait for Obama's policies and then draw their conclusions.

I am in the downstream gas business. Our company has warned that many clients are putting project awards on hold or cancelling them. However, the world will still want refined products and plastics for years to come.

The investment capital for new or revamped refineries and furnaces will only be easily available to those companies who have cash. Heavy borrowing is out for a while.

[Kf6vci]

Check out the CL crude futures being higher for every month and year, up to 2016.

No doubt there will be a supply shortage coming with countless projects like new refineries etc. on ice.

Some suppliers need $ 70 to break even. go figure. Get a long contract to sleep at night.

Disclosure: I am long on crude

[VegasVic]

Check out the CL crude futures being higher for every month and year, up to 2016.

No doubt there will be a supply shortage coming with countless projects like new refineries etc. on ice.

Some suppliers need $ 70 to break even. go figure. Get a long contract to sleep at night.

Disclosure: I am long on crude

I feel sorry for you then! Oil will touch $35/bbl by Christmass and will likely remain in the $30-$50/bbl trading range for the foreseeable future. As for 2016, well lets get past December 12th 2012 first, then I might conjecture about 2016

[VegasVic]

Check out the CL crude futures being higher for every month and year, up to 2016.

No doubt there will be a supply shortage coming with countless projects like new refineries etc. on ice.

Some suppliers need $ 70 to break even. go figure. Get a long contract to sleep at night.

Disclosure: I am long on crude

I feel sorry for you then! Oil will touch $35/bbl by Christmass and will likely remain in the $30-$50/bbl trading range for the foreseeable future. As for 2016, well lets get past December 12th 2012 first, then I might conjecture about 2016

Correction: Should read December 21st 2012

[kimmy]

I have broker guru kind of guy, works only with speeders and options and made 230% since January 2008. Buying selling long or short in a few days up to a couple of weeks. He bought oil long last Friday stop/loss 30 usd a barrel, and T-bond short, another bubble waiting to burst?? Anyone a comment on the T-bond short investment?

You are addicted to jargon. Probably talking out of yer arse. Sounds like your 'broker guru kind of guy' lost a load on going long on oil, particularly if in leveraged funds.

Sure, bought Friday oil long turbos, speeders, or how it called where are from. It involves a high part of financing b the bank, you can win a lot and loose a lot. It's automatically terminated when oil drops below a certain point. Closed the long position, believe it or not 61% result. T-bonds still around the same.

Long position closed today

[kimmy]

I have broker guru kind of guy, works only with speeders and options and made 230% since January 2008. Buying selling long or short in a few days up to a couple of weeks. He bought oil long last Friday stop/loss 30 usd a barrel, and T-bond short, another bubble waiting to burst?? Anyone a comment on the T-bond short investment?

A couple of comments. What is a speeder? Also, your broker bought oil last friday as it traded between 54-56 $USD/bbl (presumably QM futures) and has a stop loss at 30? My question is, what, is he nuts or something? Yes T-Bonds are in a bubble. Smart traders go short when the bubble bursts rather than trying to guess when that may be. Chok Dee

edit: I can't let this go, as oil has fallen 25% in one week since this "gurus" entry, presumably in leveraged derivative instruments. Stop loss another 20% lower, while time premium slips away as well. That's insane man.

It's a game lannarebrith, you invest with money you don't have, like a margine account from your broker, but more extreem. If you invest 1 dollar the bank loans another 2, 5 or 10, the drawback in this product is if the bond, commodity, stock, index or whatever you invest in drops or surges to a certain point you loose your invested dollar. The bank never looses. But your resullt on your invested dollar can be a lot.

Like said I am member of a guru kind service, tells when to buy and sell, and who made 400% in the last 3 years, 230 % since January. He knows what he is doing and some of my own.

Currently closed the oil long, still on silver long since 3 weeks and since 3 days on Dow short. It shifts quickly, long and short in a few days to weeks. The T-bond short I really expect some good results.

I was on oil short on his advice when it was 136 (July??) went up quickly to 143, but I had my stop loss on 142. Lost a lot! Win or loose, not much different from the casino

Edited December 11, 2008 by kimmy