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by Ashraf Laidi
Posted: Aug 22, 2009 3:37
Comments: 852
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This thread was started in response to the Article:

VIX, Oil, BRICS & Sterling's Sell-Appeal

BRICS equity indices fail at key fib retracements, VIX and oil near major trend lines and sterling's sell-appeal hasn't looked this good in a while.
 
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asad
London, UK
Posted Anonymously
15 years ago
Nov 20, 2009 0:24
Ashraf,

It was nice to read about your (bearish) outlook in today's article. It's encouraging to know that at least SOMEONE agrees w/ my views. And God, WHAT a someone!

It's pretty discouraging at times when everyone is saying that oil is bullish...and me alone...like an idiot is talking about fundamentals. Even if I know I'm right...I start doubting myself (but inner side, I know what I'm talking about).

Thanks for the passive encouragement. :) Again, oil has a higher probability of 75 than 85...


Asad
speculator
Posted Anonymously
15 years ago
Nov 19, 2009 16:50
xaron when i speak positive about the dollar i mean over time frames of at least a couple of quarters not in day/week trading timescales. i still remain bullish now more than ever. the dollar is very cheap
Xaron
Munich, Germany
Posts: 528
15 years ago
Nov 19, 2009 14:17
spec, no offense, but as far as I know you've been long in the Dollar for a few months now? Is that correct?
speculator
Posted Anonymously
15 years ago
Nov 19, 2009 14:00
my recommendation to short cable the other day at 1.68 was a winner if anyone listened.
Gunjack
UK
Posted Anonymously
15 years ago
Nov 19, 2009 12:25
@Asad I guess everyone has their own trading style/ideas and if you truly believe in your theory on Oil and can afford it, go short, on a long enough time horizon every single theory is valid and can be proven correct. But the idea that Oil or any other financial instrument for that matter "should" do what seems logical to 1 person or what is taught in economic textbooks is flawed in reality. Our markets are hugely imperfect, information asymmetry exists everywhere...The big houses on the street engage in this on a daily basis...GS call it "providing Colour" to their clients!?!?
nzvik
Auckland, New Zealand
Posts: 225
15 years ago
Nov 19, 2009 1:07
Asad

If you start holding very strong views about where oil "should" be, you will miss trades which will make you money. If you are looking to hold trades for 3 to 6 months - then your fundamental theories may hold good.

I agree with Gunjack views. The supply demand logic is too simple. I could take a long term fundamental view that hybrid cars will have a 50% share therefore oil should be at $20 ?
I don't really care what the supply / demand situation is and what the fundamental logic behind the current price is - there are too many dynamics at play with crude and I am not good enuf to analyse them to death. My only interest is if I can trade it.
I am unsure at this stage where crude will go - as there seems to be some decoupling with USD weakness.
But in the short term if I had to take a view - then it would be bullish.

as a trader words like "should" normally land one in trouble, if you are an economist then it is a different game altogether

Good Luck
asad
London, UK
Posted Anonymously
15 years ago
Nov 18, 2009 22:45
Gunjack,

You'll be surprised that demand/supply DOES and IS still playing a part. If not, then why is NG not following oil's direction?

Look, following the trend and making money is one thing...but understanding WHY this is happening is surely another ball game!

I've been saying over the weeks (even months!) that oil as an asset is priced incorrectly. At best, it should be around late 60s...in early 70s owing to weakness of the USD...& in NO WAY at the current levels!


Asad
Gunjack
UK
Posted Anonymously
15 years ago
Nov 18, 2009 22:23
@Asad IMO buying is taking place due to the 2 factors I mentioned in my earlier post. I'm afraid to say I find the whole Oil oversupply/demand theory too simplistic. Oil, like every other market is inter-connected and therefore affected by a multitude of factors (USD, Dow etc). I am not here saying Oil will rise or Fall as I'm not a commodity strategist...But looking at the price action and listening to the chatter at the commodity brokerage houses I am bullish short/med term.
asad
London, UK
Posted Anonymously
15 years ago
Nov 18, 2009 21:32
Gunjack,

"firstly buying is being funded buy an enormous carry trade against the USD."

Why is the buying taking place? And why would it CONTNUE to take place at 80/b? Think. :)


Asad


P.S. Anything not demand-driven must definitely be superfluous...
Gunjack
London, UK
Posts: 1184
15 years ago
Nov 18, 2009 21:13
Just wanted to add my two cents on the Oil debate for what it's worth....Like the previous poster Asad I was contemplating the oversupply which in theory should be dampening prices.
But in my mind there are a few drivers of the current price - firstly buying is being funded buy an enormous carry trade against the USD. Secondly; the enormous amount of stimulus injected by central banks has created a liquidity bubble forcing investors into a buying frenzy. IMHO a combination of these scenarios are driving prices
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