RE:RE:Octane its not about market sentimentBottom line: Biden needs to fill the SPR asap for some reason, but painted himself into a corner when he said he wouldn't buy oil for the SPR until $70. Otherwise they would have already been buying it.
Biden said he wants $70 oil to refill the SPR, and dammit he's going to get what he wants no matter what it takes.
riski wrote: The volume on the WTI contract is way above normal since this downward volatility started in the past two weeks indicating a sudden influx of selling pressure. If I had to guess, Biden and the dems have decided that they need to refill the SPR sooner rather than later due to either a) fear of republican subterfuge after they take over the house in January to make them look bad for draining it or b) a threat they have identified with international intelligence making a lack of energy security a major problem for USA and potentially embarrassing for Biden if whatever event unfolds.
So much of what we are seeing is political. There is SO much riding on the price of oil. The entire fortunes of nations and political regimes including the USA. They are compelled to play the game to keep the ship righted regardless of what the physical market is doing.
But eventually economics has to trump poltiics. The buying pressure will simply become too great to suppress.
Patience my friends.
GambinoB wrote: Some people might understand but the majority of trading today is just algos running scripts. Banks, hedge funds, some pros, rarely retail run these mostly unattended now.
So a bit of history since no one answered my question (show the lack of knowledge of the so called traders here)
About 10+ years ago there was a collapse where the paper market for mortgages could not be supported by the physical market. Fannie Mae and Freddie Mac were at the centre of a collapse. Banks, government drove bailouts and of course the tax payer paid the price. This was an instance where the algos bid up the value based on programming logic
Fast forward to today. Algos and programs are driving a blind trade between financial and physical. Thia time in the opposite direction. Banks, funds, hedges blindly shorting the financial paper market based on "code"....i could talk for years about the pros and cons of that "code" anyhow just like that period here you have the reverse
There will be a massive bailout and government will come to the rescue again of banks, hedges,/funds....tax payers will pay the price again
The difference is we will see that fannie and freddie in reverse..instead of algos bidding up value....now algos are shorting down value....all system driven (so no "person" at the top pushing buttons)
In 2023 we will see a reverse explosion.
My logic cant be denied....any logical TA person knows algos are driven by code. Good TA's also know that can lead to an asset/paper disconnect. They also know (the smart ones) that the end results can be explosive.
Just like mortgage paper plummented in value the reverse can be true
Oil paper can skyrocket
Sadly in the end tax payers will pay....and long-term investors in oil and gas will make bank
Call it the reverse big short
Happy times coming
Warren Buffet knows this feel free to ask.