Friday 27 March 2015

Oil soars on middle eastern conflict

Whilst there was further renewed weakness in the equity market, there was strong upside for Oil prices. WTIC settled higher by $2.46 (5.0%) @ $51.43. If $41.24 was a key short term low, then first retrace upside is the $60/67 zone. The underlying issue of over-supply though.. remains entirely unaddressed.


WTIC, weekly



WTIC, monthly



Summary

First things... first.

The issue - at least to me, remains one of over-supply. Yes... short term 'war gains' could continue for weeks.. even a few months, but until the valves at individual oil wells are physically turned OFF... the inventories will continue to build.

At some point this late spring/summer, storage will be maxed out.. and then it will be a fire sale.

Right now I'd actually be looking to short oil... somewhere in the 60/75 zone, esp' once we're into June/July.
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As for equities...

sp'weekly7


The sp'500 is close to breaking the rising trend from the Oct' low. If the March'11th low of 2039 low fails to hold - as I believe it will, then next key support is the 200dma around 2010. If that fails... then a test of the giant 2k threshold. Ultimate 'best case' for the doomer bears would be sp'1960/40 zone... but for now... that remains a mere hope.
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Looking ahead

Friday with see the final revision for Q4 GDP, corp' profits, and consumer sentiment.

*it is notable that the Yellen will be speaking at 3.45pm tomorrow... at a San' fran' fed conference.
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Mrs Brown says that in London...

 ...everyone is different, but that means.. anyone can fit it in. I think she must be right, because although I don't look like anyone else, I really do feel at home. I will never be like other people, but thats alright.... because I'm a bear. A bear called... Paddington.


Goodnight from London