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by Ashraf Laidi
Posted: Nov 19, 2009 21:57
Comments: 315
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This thread was started in response to the Article:

Oil Weakness May Intensify

Oil sluggishness may risk turning into a faster selloff, especially as the fuel fails to gain on recent USD losses.
 
nzvik
Auckland, New Zealand
Posts: 225
15 years ago
Nov 26, 2009 18:31
Asad,

If oil is at 77 or 76, then the market believes that is the right price for the time being. Your theory around weaker economies in general is not trade able for me in the short to medium term. Then one would have been short the S&P for the last 6 months
Its all relative - are we better off than 12 months back - of course things are in better shape, and I can't judge whether the current economy merits oil at 77 or 65 or 95 or 130 - and as a trader I don't really care.
Ashraf - the FTSE drop could be the start of our cyclical month end correction - as money goes off the table bfore the NFP

good luck

Ashraf Laidi
London, UK
Posts: 0
15 years ago
Nov 26, 2009 16:49
All questions about SNB mustve been addressed by today's IMT on SNB and CHF. if you are not susbscribed to the IMTs then you could be behind the curve in some trades.

it did take SNB a while to intervene. we could see more aggresive action as they need to lift the support.


As for oil, the question is whether it will break 75.30s on Friday. LOOK AT THE FTSE-100 CHART TODAY.

Ashraf
asad
London, UK
Posted Anonymously
15 years ago
Nov 26, 2009 11:59
NZ,

There's MORE to recovery than just consumption! The crisis has rendered economies weak for years to come. Take the US, e.g. - debt levels 100% of GDP. Do you realise that the country could (technically) default in years to come? (Ofcourse, because it's the US of A...it won't). And that's why the USD's getting hammered - future expectations (& not just due to interest rate tweaking).

I agree that consumption will go up during the forthcoming holidays...but that'll be a mere blip! Seriously, ask yourself - not just for profiting - if the current economy merits oil at 77...


Asad
nzvik
Auckland, New Zealand
Posts: 225
15 years ago
Nov 26, 2009 1:17
Asad

As per Ashraf's chart - this is normal - it is still playing in the range. If you want to play oil - u must play it both ways, just tighten your stops when price is close to range tops and bottoms.

I am just waiting for it break out of this range - will follow it whichever direction it goes.

And fundamentally - I don't think world economies are getting hammered. In fact - most are recovering nicely and oil consumption will simply go up - more so in the coming holiday season.

Good Luck.
asad
London, UK
Posted Anonymously
15 years ago
Nov 26, 2009 0:49
Ashraf,

"this could breakl below 75 expecially after the oil data at 15:30 GMT"

Took you by surprise, didn't it? Even me. There's something EXTREMELY fishy - shady - going on. If you knew me, Im the first one to throw conspiracy theories out of the window...but s/thing v/ strange is going on.

I don't know if the data is being manipulated or the oil price! Consumer confidence, retail data, manufacturing data, housing data - e/thing's coming out gloomy...but oil's UP THERE! Why?

I agree that weaker USD increases appetite for oil (because oil is priced in USD blah blah blah...)...but think! Common sense...even if USD were to go down 10% from here...you wouldn't just keep buying oil, would you? Why keep pumping money into oil when the world economies are getting hammered...when oil consumption isn't there!

Gold...I understand...but oil? Why?


Asad
Rob
New York, United States
Posts: 305
15 years ago
Nov 26, 2009 0:33
Ashraf - to add to Conan the Contrarian's comment - if the SNB does intervene, would the CHF rise against all currencies? Or have they targeted their efforts against specific ones at specific times.
Conan the Contrarian
Posted Anonymously
15 years ago
Nov 26, 2009 0:20
Ashraf, what do you think of the possibility of another SNB intervention, now that CHF has ripped through parity with USD? I think you mentioned they've already done it several times this year, so I would imagine now would be an even better time to correct the currency, what with its highest level in many months and thin holiday liquidity.
alive
New Jersey, United States
Posts: 5
15 years ago
Nov 25, 2009 18:27
Ashraf,
What are your thoughts of USD/CAD with oil falling below $75.
thanks
Ashraf Laidi
London, UK
Posts: 0
15 years ago
Nov 25, 2009 18:15
Rob, interestingly, EURCHF stopped being closely correlated with equities in 2009 but i suspect the argument in favour of CHF is similar to that of JPY as both currencies are consisered to be far away from the subprime and bank sector volatility. Look how CHFJPY is mainly a horizontal.

Ashraf
Rob
New York, United States
Posts: 305
15 years ago
Nov 25, 2009 17:30
Hi Ashraf,

Not the most exciting question, but here goes anyway. The dynamics of EUR/CHF?? I really can't figure them out. I would think that it would go up with risk appetite, but it seems to go down. Am I missing something? Is it that people pull money out of EUR/USD and then put it into EUR/CHF with falling appetite? And vice versa with rising appetite. I would just suspect the low-yielding CHF to down with rising appetite. I know it's not something to be concerned with, considering the SNB's key levels. Anyhow thought I'd ask.