Posted by dodgerdog on 17th of Feb 2009 at 11:49 pm
The timing for a low comes in this week BUT you need to see
symmetry improve on the near term charts (taking out short term
swings) before getting in front of a falling knife. Timing is
only something to watch but it needs price action to support.
Oil will not go up while the markets are tanking and vice
versa.
You will need to see either (a) beginnings of recovery or (b)
weakness in the dollar before crude starts to recover. We are not
seeing either. With the massive treasury supply being lined up over
the next weeks and months we could see a dollar decline, but the
weakness of all the other currencies (esp EUR/JPY/GBP) is likely to
keep the dollar high.
The only potential bright spot I can see is
Canadian-dollar-denominated crude. CAD has not been tanking against
the USD as much as everything else and Canada is a net producer. It
is possible that we could see some divergences in this area and the
way to play it would be the MASSIVELY beaten down CAD double oil
ETF HOU.TO (and its bearish sister HOD.TO). Right now it's catching
a falling knife but if I could see HOU.TO becoming a buy.
You could also look at UGA, the unleaded gas ETF, which has been
showing great strength and could be a multiple-bagger into the
summer.
Posted by canadianguy on 17th of Feb 2009 at 11:10 pm
hou.to is a nightmare because of the contango. right now the
march contract is trading around $35, it will expire on friday this
week. then next week we will be into the april contract. Right now
I think april is trading at $40ish. when this becomes the front
month contract, it will inevitably go down to support on the spot
price at $33-35. This is a decline of about 15%, on a double etf
that is 30%. HOU.TO was $10 in december when oil was the exact same
price - it has lost 50% on the contango effect. (it is $4.36
now)
In some ways buying HOD.TO (The opposite, like
dig/dug) is a guaranteed way to make money until/unless the
contango goes away or the front month stops falling from $40 in its
first day to $33-35 by the end of the contract. HOD was below
$20 the last week of December when the December contract
expired at around these prices, and with very little decline
in crude it has doubled.
You're right -- I hadn't been taking into account contango
(which is hitting USO too). I have a paper trade on HOU.TO dating
back weeks and week which is in massive profit and have been
waiting for a chance to actually get into a real trade (using
HOD.TO as a proxy for a short). But maybe I should just go
ahead.
DXO, etc.
Posted by califman4u on 13th of Feb 2009 at 12:43 pm
Matt:
What does oil look like to you right now? It seems that 2.34 is a support point for DXO. If it breaks that, what would be the next support level?
Possible timing low comes in
Posted by dodgerdog on 13th of Feb 2009 at 01:01 pm
Possible timing low comes in next week for QM (crude futures) which are up nicely today while USO and DXO are down.
Any more thoughts / info
Posted by doctormike on 17th of Feb 2009 at 10:40 pm
Any more thoughts / info on the possible timing low for crude...? The Oil ETFs are looking pretty tempting.
DocM
USO has support at 21.44
Posted by dodgerdog on 17th of Feb 2009 at 11:51 pm
USO has support at 21.44 and 20.92 so make note of these levels.
The timing for a low
Posted by dodgerdog on 17th of Feb 2009 at 11:49 pm
The timing for a low comes in this week BUT you need to see symmetry improve on the near term charts (taking out short term swings) before getting in front of a falling knife. Timing is only something to watch but it needs price action to support.
Oil will not go up
Posted by unsane on 17th of Feb 2009 at 10:55 pm
Oil will not go up while the markets are tanking and vice versa.
You will need to see either (a) beginnings of recovery or (b) weakness in the dollar before crude starts to recover. We are not seeing either. With the massive treasury supply being lined up over the next weeks and months we could see a dollar decline, but the weakness of all the other currencies (esp EUR/JPY/GBP) is likely to keep the dollar high.
The only potential bright spot I can see is Canadian-dollar-denominated crude. CAD has not been tanking against the USD as much as everything else and Canada is a net producer. It is possible that we could see some divergences in this area and the way to play it would be the MASSIVELY beaten down CAD double oil ETF HOU.TO (and its bearish sister HOD.TO). Right now it's catching a falling knife but if I could see HOU.TO becoming a buy.
You could also look at UGA, the unleaded gas ETF, which has been showing great strength and could be a multiple-bagger into the summer.
hou.to is a nightmare because
Posted by canadianguy on 17th of Feb 2009 at 11:10 pm
hou.to is a nightmare because of the contango. right now the march contract is trading around $35, it will expire on friday this week. then next week we will be into the april contract. Right now I think april is trading at $40ish. when this becomes the front month contract, it will inevitably go down to support on the spot price at $33-35. This is a decline of about 15%, on a double etf that is 30%. HOU.TO was $10 in december when oil was the exact same price - it has lost 50% on the contango effect. (it is $4.36 now)
In some ways buying HOD.TO (The opposite, like dig/dug) is a guaranteed way to make money until/unless the contango goes away or the front month stops falling from $40 in its first day to $33-35 by the end of the contract. HOD was below $20 the last week of December when the December contract expired at around these prices, and with very little decline in crude it has doubled.
You're right -- I hadn't
Posted by unsane on 17th of Feb 2009 at 11:37 pm
You're right -- I hadn't been taking into account contango (which is hitting USO too). I have a paper trade on HOU.TO dating back weeks and week which is in massive profit and have been waiting for a chance to actually get into a real trade (using HOD.TO as a proxy for a short). But maybe I should just go ahead.
2.05 to 2.10 area
Posted by cspirit on 13th of Feb 2009 at 12:52 pm
2.05 to 2.10 area
There is a timing low
Posted by matt on 13th of Feb 2009 at 12:49 pm
There is a timing low for crude next week I think,