"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Monday, October 27, 2014

Crude Oil Weakness Continuing

Two weeks ago during the trading session, crude oil briefly dipped below the $80/barrel level. It did not stay there long however. This morning, crude has revisited the sub $80 level. This is something that we should monitor closely.

We will want to see how this market closes today as it has not had a close below $80 since 2012.


Weak crude prices, while generally good for the consumer ( cheaper energy costs ) and some business interests ( transportation related), are a sign of sluggish economic growth generating insufficient demand to keep up with available supply.

Equity markets are lower as I type these comments as well with the Yen higher and the bonds higher. More safe haven plays are in vogue at this point. Deflationary pressures are back once more on the minds of traders it would seem.

Gold is getting tugged between being a safe haven and the general trend lower across the commodity spectrum.

Macro trades are on display once again.

10 comments:

  1. 77 was seen across the blurb_osphere as the first target for bubblin crude oil CL, the june 2012 low... but wait we're back above 80.01 so might be a peak bottom on lower volume and spring back into the range!

    commodities made a 5 yr low overnite as sugar got hit on brazil election, but looks a bit differently now as dip buyers are hitting most all asset classes on the weak DX.
    http://www.bloomberg.com/news/2014-10-27/commodities-drop-to-five-year-low-led-by-sugar-to-coffee.html

    USDA daily export reporting: China buys 4.4 mln & "unknown destinations" buys 4.1 mln bu of US current-year soybeans

    Export shipments for week ending Oct 23 (mln bu); corn 27.7, grain sorghum 6.5, soybeans 80.7 (BIG) wheat 7.8.

    looks like corn and wheat are shortable as close to last week high as they can get up to, beans are widow makers! crop progress tonite may lead to turn around tuesday, whispers of corn at 50% (not 46%) and beans 69%.

    cheers!

    ReplyDelete
  2. of the 7 ag commodities w/ outside reversals Friday 1 up/ 6 down), none have sustained Friday's price trend (yet) today

    dec meal hits +3% and above 200-day MA blurbs.

    US(ZB) the 30 yr long bond futs on continuation has the 142-00 round number peak we're now above it. talk is bond trading has been quite low since the 9 pt volatility day, nobody in the market.

    the 50-day in play: NDX low o day the 50dma touch, SPX not gettn thru 50dma for 2nd session, and VIX refuses to touch it's 50dma.

    ReplyDelete
  3. Looks like there is some serious support for WTI around the 80 mark…

    I am curious Trader Dan, do you believe if we close above 80 that we are adding credibility to a bottom or do you think we will test the sub 80 levels once again?

    Thank you for all the work you put in to this blog - it is immensely helpful and informative!

    ReplyDelete
  4. With oil being where it is the last couple of weeks gold has been holding actually going up during this same time which is encouraging.
    Well for me anyways.

    ReplyDelete
    Replies
    1. Kindly remind you that gold still bearish

      Delete
    2. LOL - this guy is quite a comedian

      Delete
  5. Hi Dan , heard anything about Red Kite , holding 50% of LME copper ? why would they do that if supply is obviously all over the place ? another amaranth ?

    ReplyDelete
    Replies
    1. being the story all over the tape ? what are the implications ? do you expect a smack down in the copper price in order to get rid of these guys ? seems like an easy pray , wouldn't you think ?

      Delete
    2. also , wouldn't you think this is a wide spread practice at the moment ? I thought this information was confidential anyway ....

      Delete
  6. I would like to remind Bob, that if he is reading this, then he should consider getting off the computer and spending more time with his family.

    ReplyDelete

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