Posts Tagged ‘OIL SPECULATION’

Financial Friday – EU Stress Tests and US Debt Mess

$WTIC WEEKLYFirst, the good news:

We did it again at the NYMEX, calling the crooks out in yesterday’s morning post and followed up with my Alert to Members, which was posted over at Seeking Alpha and on our Facebook and Twitter pages but not on StockTwits (more on this debacle later) so those guys missed out on yet another Billion Dollar opportunity (which I predicted we would get on the 9th) as we once again called a huge move in oil with my 9:50 Alert to Members saying:  

Europe is down half a point and we are up half a point so something is bound to give.  We’re not quite getting to $99 in oil so we have to be patient and wait for a break below $98.50 to re-short the futures (/CL).  On USO puts, roll up or DD on Aug and I’ll be liking the TOMORROW $39 puts at .50 on the assumption we get a bit of a sell-off after the nat gas inventories at 10:30 (as they tend to hold up hope until then).  

At the time, we had 185,000 NYMEX contracts to work with so plenty for everyone and, as per our June 1st plan to break the NYMEX speculators by using their own crooked game against them (because God knows the government does nothing) this is a PSW trade idea we share with everybody.  And why not – they gang up together to screw the American people – it’s only fair if the American people return the favor by calling their bluff! 

We called their bluff right on schedule at the 10:30 Natural Gas inventory announcement and as you can see from this intraday chart of our beloved /CL Oil Futures, it was a slam dunk for our futures players as well as our option traders, who picked up 250% ($500 turns into $1,750) in just 4 hours!  That’s a nice day’s work, don’t you think?  

Even a (yawn!) stock trader could have done well as USO plunged from $38.70 to $37.20 (4%) right on our schedule but we were after bigger fish as those 185,000 NYMEX contracts took a $647,000,000 hit so plenty of profits on our side to share for all of our readers and THAT is how you punish the speculators – with the only thing they do care about in this World – Money!…
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Thursday Thump – Yucky Euro and the Oil Slick

$WTIC WEEKLYGood golly what a mess!  

I hate to say I told you so but…  Oh wait, no, I’m actually loving this…  I TOLD YOU SO!  Look at July 2008 and look at June 2011.  Now, look at July 2008 and look at June 2011.  Now, look at where oil USUALLY trades.  Is it over $100 or under $80?  You don’t want to go back further because then the case could be made for under $60.

Wages have not gone up (adjusted for inflation, since 1973), home prices have not gone up (since 1985), stocks have not gone up (since 2006) – just oil and gold and silver and other stuff that greedy rich bastards like to hoard in hopes of making themselves even richer – even though it comes at the expense of EVERYONE ELSE IN THE WORLD.  

One of the protesters in Greece had a sign that said Prime Minister George Papandreou was "Goldman Sach’s employee of the month" – now THAT’s a good insult!  At least it indicates that the Greek people UNDERSTAND how they are being screwed over while it’s the Americans who are bending over and taking it from the Banksters without complaint.  

I’m not going to get into it again but WHO pays that extra $30 a barrel for oil?  The bottom 99.9%, that’s who.  Sure The Donald also pays $4 a gallon when he gasses up the limo and he also pays double to heat his gigantic homes but a full tank in the limo is $120 while the prix fixe at Masa is $450 per person for Donald’s lunch so I doubt he’s as worried as you are about a tank of gas.  The American people are having $1.5Bn PER DAY extracted from their wallets at $4 per gallon, which is $547Bn a year and Globally that’s $2Tn spent on gasoline alone.  All that money is/was disposable income that is being directed AWAY from other parts of the economy. 

Add in the heating oil, natural gas, oil products (rubber etc.) and all the pass-through energy costs from manufactures and we’re up to about $5Tn, nearly 10% of the global economy going up in flames to enrich perhaps 1,000 oil men (and some of those men fund terrorism with their profits) and the speculators who shove the prices higher.  THEY ARE DESTROYING THE WORLD!  And it shouldn’t be the people…
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Thrilling Thursday – Can We Make Another Billion Today?

Wheeeee!  

$1,129,860,000!  That’s how much money was made shorting 376,620 NYMEX contracts at $103 yesterday, as we planned!  Congratulations to those of you who got your share playing along with us and, to the manipulators who got stuck with the bill – screw you bastards, we have your number and we’re going to ring it now!  I called a cash-out at the $100 line in Member Chat as 2.9% was more of a drop than we expected in one day and we will re-load on the bounce as we cross back below the $100.50 line – as discussed in this morning’s Member Chat - assuming the Dollar has bottomed out at 74.35.

This isn’t complicated people – what’s the 2.5% line off of $103?  $100.425.  That’s where we’ll look for oil to consolidate but below that line we’ll be comfortable with our shorts again, looking for those next legs down to $98.88 (down 4%) and then $97.85, where we will once again look for a 20% retrace to $98.88 and then a nice short there when it fails.  So come on – you can play along at home – don’t miss out on making the next $1.129Bn!  

Meanwhile, what’s a 20% bounce off a $3 drop? 60 cents, right?  Where did oil bounce to in the futures?  $100.60?  This is not rocket science folks…  We teach these little tips to our Members every day at Philstockworld.  Sure you may find it disturbing that the chart we drew up (above) in early April is hit almost to the penny on the NYSE yesterday (2 months later) as it halted right on our red line – but that just shows us that Bots are running this market (as we keep telling you) and it also means that we can rely on our ranges and that makes it EASY to make good trading decisions.  

Also in Member Chat last night, I reviewed 8 short put ideas (bullish) that can net us over $3,000 in 15 days if we get a bounce and hold our "Must Hold" levels.  This is the nice thing about hedging – we make money on the way up OR on the way down and, when we are trading in a range – like we hopefully will this summer – then we make money both ways on a regular basis!  Let the market manipulators play their…
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So You Want to Be an Oil Speculator?

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So You Want to Be an Oil Speculator?

By Ari J. Officer, courtesy of TIME

oil speculators, TIME 

You don’t need a huge pot of bailout money to trade oil these days. Just don’t expect to make the big bucks without one.

In the past year oil has traded above $120 per barrel and below $50 per barrel, generating plenty of buzz (even within government agencies like the Commodity Futures Trading Commission) about oil speculators and their mysterious ways of making mounds of money. (Read "Why There Should Be More Oil Speculation, Not Less.")

So who are these traders who cryptically buy and sell oil contracts for pure profit, without supplying it or using it? Most people immediately think they’re hedge funds but forget about the investment banks. Then again, you don’t have to be a hedge fund or an investment bank to be an oil speculator. Be forewarned, though: trading oil futures is not like trading stocks and bonds. It’s not for the ordinary investor. It’s a wild ride. If you’re willing to take the risk, here’s how you might go about it:

First, you’ll need money. How much? Let’s say you want to trade one contract of crude oil on the New York Mercantile Exchange (NYMEX). Since you’re not a member of the exchange, and no one will really trust your new oil venture, you’re going to need to start with at least $10,000 in your margin account (similar to a brokerage account, but it lets you leverage your bets to the hilt) as collateral to comfortably trade one contract. That might sound like a lot for just one contract, but a single contract on NYMEX represents 1,000 barrels of crude oil: if the price moves $10 per barrel, you just had a swing of $10,000 in your account, which means you’ve either doubled your money or lost your shirt, your dreams wiped out in mere minutes. And you thought casinos had all the action!

Next, you need to find a broker and clearinghouse to connect you with the markets to trade and also act as insurance to the exchange that you will cover any potential losses. (Read "Borders of Sudan’s Oil-Rich Region Shrink.")

Finally, are you ready to monitor the oil market 24/7 — to be peeking at your monitor even while…
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CHART OF THE DAY: OIL SPECULATION

CHART OF THE DAY: OIL SPECULATION

Courtesy of The Pragmatic Capitalist

This note from The Economist explains much of the recent rise in oil prices:

THE oil market is behaving like a bucking bronco again, and politicians are once more blaming speculators for careening prices. It is difficult to assemble a definitive explanation for the rally: a weak dollar helps oil prices, but evidence for improving supply and demand remains thin. Positions held on NYMEX, the New York commodities exchange, have indeed soared. In 2008 America’s Commodity Futures Trading Commission (CFTC), which regulates NYMEX, examined how the changing positions of hedge funds affect prices. It found correlation, not causation, but its investigations were hampered by the fact that it could not examine intra-day trades. Nor could it monitor certain derivatives, such as those traded via London’s InterContinental Exchange (ICE), in which Wall Street dealers are particularly prominent. But in a sign of things to come in the oil market, on June 12th the CFTC said it had launched a public investigation to see whether the biggest natural-gas contract traded on ICE was moving prices around in the more regulated futures markets.

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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