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« Oil Dances the Contango Around the Basis | Main | Bottom Fishing »

Friday, July 04, 2008

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Voice of Reason

I love the smell of crazy people in the afternoon!

It never fails. The people get crazy and the plunge comes.

Dr. Alan Fu is a breath of fresh air.

Welcome bobby. Be careful of some of the big kids. They swear a lot and act nutty but they are harmless.

bobby

Gee thanks, Mister. The people get crazy and the plunge comes sure seems like "scientific, well reasoned advice" to borrow a phrase from Dr. Fu.

I can't wait till the future when my grandkids will study Sociobomonics and really learn how the world works.

Isn't it exciting that these Eliott Wave things are making us all so rich? Can't wait to use some of that Socionomitry I been learnin'.

bobby

Upstart

Guys and gals, how about short-term wave analysis here? I think wave D of a triangle (DOW) ended at today's low. Final decline imminent now. Dr. Fu is soooooo right about the Fibo-numbers. Fibo-magnet for yearly bottom is nearby. But not this week.

yelnick

Skiwaver, you laid out how this is working! Maybe the spread *should* get arbitraged away, but the increase in the long-only funds has inexorably pushed prices up. Also consider in your thinking what happens if the whole oil curve keeps increasing. The basis may be about the same but the price is rising so the roll works (you roll forward into new positions that ever increase). This will continue to work as long as the suspension of disbelief continues; then it drops hard, like every parabolic market.

This whole thread on oil and the contango dance shows how the 'fundamentals' can confuse whereas TA (technical analysis) is clear: the chart is parabolic, hence driven by something beyond supply/demand.

min

“Dr. Alan Fu”

Looks like you blew your cover and gave yourself away as the biggest ignoramus of all, possibly rivaled only by Prechter himself. Socionomics is tainted and tainted badly by a similar style of thinking, as you possess.

"It is pure and true, like physics, biochemistry, and computer science", you say, but you overlook that these other sciences are provable any day of the week and are consistent every time. Socionomics, although like I said before has some merits, has no such qualities.

"It is not open to human conjecture or bias or misapprehension" you claim, yet I have actually witnessed Prechter's people attempting to predict the next bear market leg down since 2003. Two times EWI did this right on their own message board. Wrong both times. The fact is those guys can’t seem to hit the side of a mountain with a shotgun at 100 feet. If some day a useful subject can be evolved that reliably predicts human behavior, it certainly won’t be Prechter doing it. The very fact that he’s a psychologist already puts him at a grave disadvantage.

“ It is one of the immutable, natural laws of the universe, provable by simple mathematics and moving in precise, mathematically, scientifically elegant fashion.” Nice (but glib) theory that may be true, but that definitely eludes Prechter’s cognitive powers.

“Socionomics is the immutable, natural law of man's behavior as elucidated by the genius of one man who had the bravery and wisdom to give words to it. There was darkness and then Prechter did something strange and wonderful and miraculous: He turned on the light!” You definitely must be Prechter’s mama sticking up for his well meaning, but delusional, ego-centric little boy.

Obviously you can’t reason very well but hopefully it is because you are having a bad trip and do not exhibit this behavior chronically. The name you chose for yourself actually is quite appropriate as you really seem to be F’ed Up in the head.

So Robert, If you are getting desperate and trying to lure people to your website of mis-information you are going to have to learn to reason in such a way that actually makes sense and produces results in the real world. Everyone on this web site has at least 20 I.Q. points on you. You smell bad dude.


KRG

Yelnick/ RP/SW :

(1) If the funds or speculators avoid near months and keep dealing only in forward months, they can avoid the "delivery" loop altogether. Can this can explain the contango (beyond the carry costs)

(2) The arbitragers would work at reducing the contango over time; but this may be happening through spot price being bid up rather than by futures price coming down?

Y : What is your count on Oil. Earlier you expected topping out at 160+ range. Do you think 145 range is a good enough turning point?

yelnick

KRG - good questions, and an answer to john walker's comment.

(1) the funds never take delivery and never suffer the carrying costs. they roll forward before delivery.

(2) yes, usually contango happens when the spot drops, and so the traders prefer backwardation; but in this case the spot is going up, as are the future delivery contracts

I had bought into the original count which put a cap at $131/bbl, but when we blew by that the count morphed to allow an extended 5th wave. It could end anywhere since such blow-off extensions are a bit out of pattern; but based on fib relationships it should go to $160-189/bbl according to Prechter. I have no reason to second guess that.

I don't think we have topped, nor will top until something shakes the psychology such as China clamping down post Olympics or the US getting serious about energy.

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