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Little pop up into the London/Frankfurt close and now back into the overnight/morning price range. If anybody is running a 15 minute chart we are close to repeating the big ugly red bar at Friday's close. Not that it means anything, but the pattern, admittedly in miniature of escalator up elevator down is not really that bullish in my opinion. Now the small caps, they are more like it, elevator up, elevator down in nice solid 4 point runs.
Still waiting for Netflix tonight to make something happen here in the summer doldrums.
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All my ranting and raving about how the 28 year old Ivy League history magers running other people's money are the dumb money in the oil market has a small amount of validity. John Kemp at Reuter's explaing how after three consecutive losing trades the hedge funds are getting investor push back on continuing exposure to the oil markets. https://t.co/dFD8haqkcy
He shows how their unwinding of relatively record level short positions has not moved prices very much because there are lots of sellers. My guess is of course (from my weekend rant) shale drillers who got greedy and didn't sell into the spring rallies getting pressure to cover next year's interest payments as well user industry hedging programs that are trying to ratchet down their positions. I don't know the GAAP rules on airline hedging costs but if there is a way you can bury buying at the top in the current quarter and take the low price replacement cost to next year's bottom line then they would certainly be doing that to manage one of their largest operating expenses. Bottom line, for whatever reason, lots of holders of oil contracts (or creators of same) see prices going lower in the future but not hedge funds.
The shorts getting out reduces the odds of my thesis that inventory surprises in August September driven by reduce shipments from the middle east plus hurricane shut in's in the Gulf of Mexico would lead to short sharp rallies. Without hedge fund short covering that will mean just the usual half day or less algo driven pop.
Trades with cats wrote:All my ranting and raving about how the 28 year old Ivy League history magers running other people's money are the dumb money in the oil market has a small amount of validity.
(Um. History majors. )
But.. better history majors than English majors or drama majors. At least they're familiar with studying history-- and much market behavior (on the macro level) repeats.
"Those who do not study history are doomed to repeat it." - Santayana
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Daniel, Pasta Boss posted an interview with a 28 year old Hedge Fund manager a while ago. He was 28 and running a lot of money. He had started at Bridgewater, also known as 'Big Ray is all in cause the Fed has my back' and gone on to leveraged success. He preferred to hire Ivy League history majors like himself because they were more capable of seeing opposing views at the same time. Many moons ago when I was an undergrad I took first term marketing. The Professor had an ice rink and he had hired a very bright liberal arts grad to run it. It was a disaster. So the idea of people with no real knowledge of the dismal science who's only experience has been trading in this long running bull market running highly leveraged Hedge Funds strikes me as a very bad idea long term and the 28 year old history major as a great shorthand way of saying it.
So far a confirmed top and stop. Waiting for price action to show this wasn't a Fed inspired short covering rally. If it was then we spend weeks doing the drop and then test the high thing once again. Being just a week or so out from FAANG reporting, with N kicking it off tonight at the close I am going to quote the master "need to see more bars".