down to 55/60Oil has been in a crash as well and still no end is insight. The current drop should have found a temp low at 70 and we can expect a brief rally up to 85/7 before we enter the final leg. By wave length, it should be 57 down from 110, hence 53. Keep in mind that we are still in liquidation mode -all that hype for the energy sector (calls for 200 and even 250 oil). The index funds and Hedge Funds having to rush through the bottle-neck. The crash is so indiscriminating that Heating Oil and Gasoline crashed by the same magnitude. Hence, the crack spread is at lows and Valero dropped sharply as well. In the 4th quarter, we will get some seasonal effects though.
Sunday, October 19, 2008
The Oil crash - 'easy' money rushing out
down to 55/60Oil has been in a crash as well and still no end is insight. The current drop should have found a temp low at 70 and we can expect a brief rally up to 85/7 before we enter the final leg. By wave length, it should be 57 down from 110, hence 53. Keep in mind that we are still in liquidation mode -all that hype for the energy sector (calls for 200 and even 250 oil). The index funds and Hedge Funds having to rush through the bottle-neck. The crash is so indiscriminating that Heating Oil and Gasoline crashed by the same magnitude. Hence, the crack spread is at lows and Valero dropped sharply as well. In the 4th quarter, we will get some seasonal effects though.
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