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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: towerdog who wrote (51636)	2/11/2022 4:45:14 PM
From: Sun Tzu	Read Replies (2) \| Respond to of 97204

Towerdog, I never recommended shorting oil. I simply said the trade was overcrowded and I that there are better places to be engaged. And at that time I called the absolute top. Then Putin decided to place a 100k soldiers at the Ukraine's doorstep and the prices started going up. That was not a predictable event. And anyways one can always get back in when the trend changes. In fact I grabbed some ERX myself later on. With 20/20 hindsight, I wish I had held on to them. I got out way too early, so we are in the same boat. That said, without an invasion of Ukraine, the current oil trade is not sustainable. I put up a chart on my board showing just how insanely one sided the oil futures trade has been. It is like a dot-com bubble. In fact every commodity is now in backwardation - meaning that the futures market believes the prices will be lower in the future than they are now. Oil is just the worst of them. As I see it, one of two things will happen: (1) Putin takes his troops home, in which case the oil price will drop. Or (2) Putin invades Ukraine, in which case oil will spike up and then nosedive. Oil demand in the industrial world will not surpass pre-pandemic levels. EV and remote work from home will permanently reduce the demand in the industrial world. This leaves only the developing world as the engine for demand. With the anticipated slowdown in the global economy, oil is more likely to go down than keep going up. And if perchance Putin attacks Ukraine, then oil will spike up. Russia will be cut off from SWIFT. And then China will gorge on Russian oil, leading to a net drop for Brent and WTI in the rest of the world. This is of course not a certainty, but I find it more likely than perpetually higher oil till the end of the year. As always with trading, timing is everything.