Oil probably still has another couple of weeks before a cycle bottom, but once that low forms there’s a good chance that will mark a final 3 year cycle low.

20 thoughts on “MARKET WRAP JAN. 12

  1. mm

    Do fundementals matter when it comes to a CRB bottom? If so, can we agree that maybe this time is different in that oil fundementals are shot? Saudi not letting up, US production still high, Iran coming on, alternative energies etc etc

    Why should oil bottom now if these factors continue to put pressure on the downside?

    1. Gary Post author

      I heard all the same excuses at the bottom in 2007 and 2012.

      The fact is the world is still using more oil every year and the oversupply is only about a million barrels. Any supply decrease could work off the glut pretty quickly.

      At these three year cycle lows usually the fundamentals are already reversing but sentiment is so bearish that people don’t recognize the change.

  2. Stevie

    Xom up on a big oil down day. There’s been a lot of divergence like this over the past few weeks.

  3. tulip

    I CAN HEAR YOU….WHOA!!!!!! loud and clear…
    As an aside your friend over at Ker announced through his host…
    that he’d just realized that someone was almost as bright as he was
    as a technician…. chartster…. ya learn something new every day…
    Thanks Gary

  4. David Silver

    As you’ve witnessed when the market turns down so does crude in concert or some pros say crude is dictating the trend.
    IF crude 30 is the bottom then so be the US market.
    As you are aware there is NO way this bear market is over, no way.
    Crude tops out @ 32.10 (tranche #2)
    Just found out from my refreshed brokerage that 40% of my long crude tranche did not sell (hedge on a flat close) position??

    1. Al

      Pretty decent analysis of oil Gary. The BBC ran the ‘Just how low can oil prices go?’ story yesterday, so I would think we are near the final low. It was the same when bitcoin reached $1400 and they had it splashed all over their (cough) ‘buisness news segments’ asking the opposite. I knew the top was close. usually when you see the media stories the cycle has 3 months or less however, I would say weeks in this case as you have.

    2. Will

      Yup, no way this is bear market top for the year…but i reckon it’s over for now, my time-frame is for the month at most…

  5. Will

    Strong Chinese data, import, export, trade balance, all beats consensus’ expectation!
    Further sell-off? don’t think so.

  6. David Silver

    Shanghai closes down 2.42%
    US futures off their highs
    Everyone thinks we’ve bottomed here and now
    Enjoy the show boyz

  7. Jacob

    Oh I hope your right David. I’m thinking after years of BTFD, this time does not turn out so good, seems to much going on for a hard rally as per usual. Though, I’ve seen it all to many times to be confident

  8. AlexP

    James Moffett, I am long stocks 20% only via SLP and 17% double short gold via etf DZZ (most likely I will cover the short though tomorrow or on Friday).

    I would have bought stocks to the brim yesterday at the close (as I had intended until Friday) unless I had received evidence that we are still entrenched in a bear market.

    Now even though I expect SPX to go at about 2100 in this bear market rally, I stay out of it except for the stock that I bought last Wednesday and on Friday – SLP – which I intend to dump when I see the bear rally losing stamina.

    On the other hand, shorting gold makes an excellent trade:
    – cover it later this week as I’ve said
    – watching gold grow into its DCH until late next week or so and
    – then re-shorting it at a larger weight than the current 17%

    1. AlexP

      …in plain words, it is against my trading strategy to go heavy weight in stocks during a bear market rally, regardless of how enticing that rally looks.

  9. David Silver

    Jacob & Alex:
    Futures back UP
    50 fib marks the S&P to 1991.23
    50 fib marks crude to 34.06 (ABOVE 32.10 and just shy of 34.26)
    Candles look hella bullish for S&P and INDU and semi bullish for COMP and neutral bullish for RUT
    4am wake up crude call (ofcourse if I stayed the course this past AM, I would’ve been a genius?)
    At least I got a crude long hedge @ 40% thus equating to 60% bearish) position
    Alex you NAILED the gold short (I honestly was going to do 1 tranche on gold miner short myself but dumb me got spooked with the gap open)!

  10. David Silver

    Interesting times:
    US futures shrugged off Shanghai performance
    2 straight bizarre end of day rallies (PPT manufactired)
    The ENTIRE media is crying wolf!
    Thinking got run with it @ the open
    Countertrend friend
    Damn damn damn

    1. Jacob

      Holey shit David, what happened. I’m in Australia, and just woke to the carnage. This time is different……. Awsome

  11. AlexP

    yes, David, shorting miners today would be pretty late even though they can still go down a lot before hitting their DCL most likely tomorrow.

    as to gold, if it retraces to 1090, there is a room for a reward-risk-wise short on gold itself

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