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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Umunhum who wrote (11633)	4/10/2004 8:44:33 PM
From: ForYourEyesOnly	Read Replies (1) of 110194

Hello uhmuhnum, "With Hubbert's Peak just around the corner, a dollar crisis on the horizon, and very limited excess capacity I believe oil should be priced with forwardization not backwardization." Think carefully about what backwardation and contango mean in terms of inventory levels, supply, demand, and traders' desire to take delivery vs. their desire to make delivery. You will find the answer there if you look carefully (hint: backwardation is a sign of low inventory levels). "I am trying to formulate an investment strategy to buy 50 contracts of oil. I believe that there is only $3 to $4 dollars on the down side and $20 to $40 on the upside." Have enough margin on hand to handle a drop of the maximum conceivable magnitude. WTI @ $20 or less, just in case.......if you are not ready for what Mr. Market can hand out, he will take all of your money and distribute it to others. Good luck,

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