I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Wed Jul 16, 2008 2:50 pm Post subject: Re: Another Record ($147.27)
AirlinePilot wrote:
Ok, smallpox, I get it! Now tell me when it goes below about 115-120$ please so I can buy a crapload more USO!
Most of the time charts and graphs with trendlines, averages, candles, etc, etc work fine, but when it comes to something like oil, and the market beginning to get a grip on the potential for supply to begin a decline, forever, those things just won't work anymore.
I see what your saying though. We should expect more volatility and the support, while trending higher, is still below where we are.
The real story is that 200DMA and being where it is should alone raise concerns.
I learned the hard way 2 years ago that the 200dma is a magnet after a big run up in almost anything.
When Gold went from $730 to $540 two years ago I lost a bunch on a leveraged gold position. I never thought in a million years we'd go down that far. Guess what was at $540? The 200dma!
Guess where gold just corrected to this last run? The 200 dma at $850 down from its high of $1030.......
Posted: Wed Jul 16, 2008 2:54 pm Post subject: Re: Another Record ($147.27)
Thanks for that explanation, SPG. I'll have to study up on this subject further, it seems. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Joined: Apr 13, 2005 Posts: 3149 Location: St.Louis, Mo
Posted: Wed Jul 16, 2008 4:47 pm Post subject: Re: Another Record ($147.27)
smallpoxgirl wrote:
emersonbiggins wrote:
In other words, why 200 dma? Why not 50 dma? What makes that relationship fundamental to the price of oil?
Prices of any traded thing move in more or less the same way...surge, retrace, surge, retrace. It's got to do with people's psychology, and also with the time lag of demand adjusting to supply. With anything that's traded, that same pattern happens in multiple different time scales simultaneously. It's sort of the same concept as fractals. If you look at a piece of a one year weekly chart, it ends up looking very similar to a 2month daily chart, or a one day chart with one minute increments.
So yeah. 50dma. That's more or less where the straight line is. You can see it repeatedly checking back to that line. On the longer time scale, uptrends also tend to check back with the 200dma.
It's just so hard to compare oil with anything else. We are in uncharted waters as we speak. Say oil does go down to around $100.00, then what ? Does demand kick back up ? Then what ? Prices start jumping back up ? It's like whack-a-mole. I have given up trying to predict what's going to happen with the prices. I am just waiting for a cat 4 to enter the GOM before I start caring again.
Joined: Apr 05, 2005 Posts: 2575 Location: South of Atlanta
Posted: Wed Jul 16, 2008 8:44 pm Post subject: Re: Another Record ($147.27)
chuck6877 wrote:
I learned the hard way 2 years ago that the 200dma is a magnet after a big run up in almost anything.
When Gold went from $730 to $540 two years ago I lost a bunch on a leveraged gold position. I never thought in a million years we'd go down that far. Guess what was at $540? The 200dma!
Guess where gold just corrected to this last run? The 200 dma at $850 down from its high of $1030.......
It happens for all the reasons SPG said.
Interesting observation but Gold is not Oil.
While I understand what your saying and tend to agree, I cannot move away from thinking that with oil its going to be....just...different. VERY DIFFERENT and very soon. It's going to leave the realm of the charts and psychology I believe for several reasons, all of which rest right here in these threads.
Thats what Im taking away from the talk here and over at The Oil Drum. At some point very soon, and it's not really predictable, all of this chart and psych stuff is going to go right out the window and I can see why.
Its quite the fix we are going to be in. Historically there just isnt any comparable event. Just my opinion, but its why I'll stay long oil for quite a while. I see the volatility and we are going to see wide swings I think in the price but those wave amplitudes just get bigger as the price rides upward.
Hope Im wrong for everyones sake, but I'll take the risk right now because most of the more level headed folks here have predicted things very well over the last two years now.
Posted: Wed Jul 16, 2008 11:27 pm Post subject: Re: Another Record ($147.27)
We're not in the "hyperinflationary-prices-denoted-in-scientific-notation" phase where "everyone-uses-log-scale-charts" yet, so yeah, traders (and the computer programs which mechanically follow the same algorithms) will still tend to follow TA, and charts, and trend lines, and 200 dma, 50dma, support, resistance, channels, MACD, RSI, Stoch, and, well, a whole lot more. The works.
Or, well, we could put it simply here, in case some people get confused by some (well, um, some??) of the technical talk. This advice comes to you courtesy of the legendary trader and speculator Jesse Livermore :
Posted: Thu Jul 17, 2008 7:36 am Post subject: Re: Another Record ($147.27)
AirlinePilot wrote:
Interesting observation but Gold is not Oil.
While I understand what your saying and tend to agree, I cannot move away from thinking that with oil its going to be....just...different. VERY DIFFERENT and very soon. It's going to leave the realm of the charts and psychology I believe for several reasons, all of which rest right here in these threads.
Thats what Im taking away from the talk here and over at The Oil Drum. At some point very soon, and it's not really predictable, all of this chart and psych stuff is going to go right out the window and I can see why.
Its quite the fix we are going to be in. Historically there just isnt any comparable event. Just my opinion, but its why I'll stay long oil for quite a while. I see the volatility and we are going to see wide swings I think in the price but those wave amplitudes just get bigger as the price rides upward.
Hope Im wrong for everyones sake, but I'll take the risk right now because most of the more level headed folks here have predicted things very well over the last two years now.
Everything is being done to keep energy as cheap as possible,
which means that all of the pent up demand will be to the upside.
but as the Top 19 No shorting list shows, TPTB
will change the rules in an instant to protect their positions.
Problem: Only Russia, China, and OPEC are lenders now to the US.
The EIA Inventory was fixed. The last straw. SPOR diversion, IMHO.
Posted: Thu Jul 17, 2008 10:34 am Post subject: Re: Another Record ($147.27)
It's testing the old support line as resistance. It held this time. Back down to $134 _________________ "So while you sit and whistle Dixie with your money and your power.
I can hear the flowers a-growin in the rubble of the towers.
I hear leaders quit their lying
I hear babies quit their crying.
I hear soldiers quit their dying, one and all." - OCMS
Posted: Thu Jul 17, 2008 11:52 am Post subject: Re: Another Record ($147.27)
Low so far today was 129.75 _________________ "So while you sit and whistle Dixie with your money and your power.
I can hear the flowers a-growin in the rubble of the towers.
I hear leaders quit their lying
I hear babies quit their crying.
I hear soldiers quit their dying, one and all." - OCMS
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