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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.
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
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
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
"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...
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