When I made the call for the low in OIL ,I also called for a retest if that which is the regular ideal scenario by the way ( I just thought it would come rather in FEB. Important though for a prolonged upside after the first thrust up was a close above 50 which did not happen. Well as we have confirmed by today's close the low we are now on our way to first 60 and 75/80 thereafter but that's a matter of plenty time as we are still in month 7 down but in 2 weeks will enter 8 which could do the trick also in the time perspective. As stocks are not finished yet we can also expect some side ways zigzags before we close above 50 on a weekly pattern which will kick off more upside potential. So its a patience game but the forward curve in oil does reflect that already and everybody who can get hold of tankers buys spot and sells forwards to lock in the arbitrage profit which kind of keeps some future supply overload but I still assume the kick off of the humongous aid programs will help to absorb that. Its also a political situation as Putin got all the Jelzin oligarchs down on their knees and as long as Oil stays low he can push forward his asset regathering program that's why Russia might be interested for oil to stay down until he got his agenda done. Nevertheless I stick to my guns buy weakness in Oil as it has some room to the upside this year.
Friday, January 23, 2009
OIL tech update - low confirmed
When I made the call for the low in OIL ,I also called for a retest if that which is the regular ideal scenario by the way ( I just thought it would come rather in FEB. Important though for a prolonged upside after the first thrust up was a close above 50 which did not happen. Well as we have confirmed by today's close the low we are now on our way to first 60 and 75/80 thereafter but that's a matter of plenty time as we are still in month 7 down but in 2 weeks will enter 8 which could do the trick also in the time perspective. As stocks are not finished yet we can also expect some side ways zigzags before we close above 50 on a weekly pattern which will kick off more upside potential. So its a patience game but the forward curve in oil does reflect that already and everybody who can get hold of tankers buys spot and sells forwards to lock in the arbitrage profit which kind of keeps some future supply overload but I still assume the kick off of the humongous aid programs will help to absorb that. Its also a political situation as Putin got all the Jelzin oligarchs down on their knees and as long as Oil stays low he can push forward his asset regathering program that's why Russia might be interested for oil to stay down until he got his agenda done. Nevertheless I stick to my guns buy weakness in Oil as it has some room to the upside this year.
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