Monday, August 8, 2016

Oil Weekly: Totally Lucky Calling The Top. Now What?

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*We still see oil in a downtrend.
*We see supply getting worse.
*As long as oil remains in a downtrend we're staying bearish.

We were "totally lucky" enough to call the top July 11th. We saw oil turn from an uptrend to a downtrend. The news followed thereafter. We think the news could get worse in the near term.
Here's the oil chart. We continue to still see it in a downtrend. Until it breaks the downtrend we're staying bearish.
Oil price (above) is far from forming an uptrend. It's still in a downtrend. Until it breaks that downtrend, we don't see reason to get bullish.
OPEC Meeting Maybe "Pushed Up" To September
It looks like OPEC is getting nervous. There is a scheduled OPEC meeting November 30th. That's too far out for some smaller players who are struggling. Several nations are calling for an audible meeting September 26th.
Our gut says OPEC members are going to let production rip into that meeting. If there is a production freeze, a cut will hurt everyone's struggling economy shorter term until oil bounces. To plan ahead they better get all the production they can now.
We think that will cycle production higher in the near term pushing prices lower.
Even if OPEC comes to a consensus, they may need Russia to agree. Russia is the world's third largest oil producer. Russia has been raising production and looks to increase for years to come.
Russia has been a main reason OPEC has had to compete and drop prices. If Russia is not part of a production consensus, that would mean the US and Russia (2 of the top 3 world producers) would still push production supply higher.
That could cause a lack of OPEC consensus.

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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