Business Magazine

Thrilling Thursday – Deal Or No Deal?

Posted on the 10 October 2013 by Phil's Stock World @philstockworld

European markets are treating this like it's a good thing, with thier markets popping 1.5% this morning.  

Our own Futures are up about 1% and, fortunately, we already made some bullish adjustments as I had interpreted yesterday's Fed Minutes as bullish in Our Member Chat (also tweeted out in the afternoon), which led us to cash out some of our bearish winners (TSLA, NFLX).  

We did, however, keep our oil shorts as it looks to me like $101.50 will break after that horrific inventory report that netted a 10 MILLION BARREL BUILD!  As you can see from this Bespoke Chart, a build like this is almost unprecedented, representing 1.5 days of imports at our currently, ridiculously low rate of imports.  

Thrilling Thursday – Deal or No Deal?
The failure of the NYMEX Trading Cartel to be able to cut off enough of our supply of crude to offset the profound drop in demand is making it very hard to maintain the charade of the artificial shortage of oil.  Like a house of cards – as that narrative begins to crumble – so will the price of oil:

Although they are making good progress, there are still 222,000 FAKE orders for 222,000,000 barrels of oil that, as very obviously illustrated by yesterday's build, no one ACTUALLY wants to have delivered in November.  So  the traders must roll those contracts to December – so they can pretend there is demand there but, there's a problem – December is already stuffed with 322M barrels worth of FAKE orders.  

At the moment, only contracts for January and February of next year are fetching over $100 as this glut of oil shows no signs of abating (and gets worse with every electric car sold and every solar panel installed) and, if you can wait to have your 42-gallon drums of oil delivered until December of 2015, $87.47 is the going rate and, if you believe people will still be using oil at all in 2020 – $79.96 seems like a reasonable price and 779,000 barrels are on order already.  Surely if you believe oil will go over $102 again

You must login to see all of Phil's posts. To read the rest of this article now, along with Phil's live intra-day comments, live trading ideas, Phil's market calls, additional member comments, and other members-only features - Subscribe to Phil's Stock World by clicking here.
To signup for a free trial membership, click here.

Back to Featured Articles on Logo Paperblog