Hsbc Bk.26 Discussion Threads

[ochs] 12/11/2017 12:32

Thanks - the trend is certainly very much upwards at present, but I know from past experience things can change quickly, so will be keeping an eye.

[hpcg] 12/11/2017 02:20

Ochs - difficult to think of a worse time to go short! Oil setting a lovely flag, and if anything I expect to push to 70 sooner rather than later.

[phowdo] 26/9/2017 10:54

Possibly short-term overbought.
Maybe setting up for a $1-2 fall on inventory data.
But last week it tried multiple times to drop below $50 and failed.

Im long select oilers having rotated out of momentum stocks.

[hpcg] 26/9/2017 10:27

I wouldn't have said so, not structurally. There is no risk premium in the price, and little or no disruption currently. Turkey is about to cut Kurdistan off, which is a relatively minor disruption, except to GKP and GENL! There should be some sort or premium because of the PRK situation - wars are fuel hungry beasts. Iran has more or less offloaded its entire stored backlog, so if anything there might be under supply on the horizon.
From a instrument technicalities point of view Brent is firmly in backwardation now. The makes looking long much more attractive than being short because of the effects of contract roll.
BTW, at the moment I have no interest in the commodity itself from a trading perspective. I'm more interested in the supply structure and what it means to the producers and the service industry.

[my retirement fund] 26/9/2017 10:08

Anyone tempted yet?

[phowdo] 18/9/2017 09:54

Just looking for a fall back to $49 area on WTI.

[my retirement fund] 18/9/2017 09:46

Thanks hpcg. Well it looks like oil is taking a good think about another leg up short term. You would be fairly brave to be taking to large a short position right now.

[hpcg] 15/9/2017 10:53

That depends on the oil price, the availability of debt finance and the availability of equity finance. Debt has finally worked it out and the markets are closed. Equity is the last to understand anything and so the likes of EOG (Enron Oil and Gas), Continental and Pioneer resources have equity values which will never be recovered. However the industry has constantly forward sold when the oil price gets high enough. It is why backwardation is so important for a higher oil price.

Having said all that there is a price where it makes money, and the oil price has been driven down by shale production, so no, I expect slower growth, to no growth to slow decline, and a slowly rising, though much more volatile oil price.

Also to note, just about the last pre-price drop sanction fields are coming online this last quarter, for example Catcher. I expect Opec and Russia to fill the gap moderating prices, but shale can always be quickest to react thereafter. So the further down the line this goes the more risky a sell the spike approach gets. This is not to say it can't be a good trade this time, but the profit margin has been getting lower.

Also look at the chart structure. The chart has made a series of lower highs through the course of this year. But whilst in the first half it made lower lows too, since then it has made higher lows. It is now very close to the last high, so even in the worst case the lower high will be marginal. Buying the dip is starting to look the more reliable strategy.

Edit - to be clear, buying the dip in oil, not buying the dip in this instrument. In addition, if the market does go into backwardation , then long instruments will benefit from positive roll over, and negative ones will lose. Market still in slight contango, but at spot the strip is really quite flat.

[my retirement fund] 15/9/2017 10:11

Are you saying you ate expecting a rapid decline in US shall production then ?

[my retirement fund] 15/9/2017 09:47

I suspect there may ne one final push upwards forcing a few shorts to close. There must be a lot with 5 to 10 percent triggers above 50 dollars which if triggered could prompt a blow out spike to 55 dollars.Good luck.

[ochs] 15/9/2017 07:06

Yes, I bought a few of these yday.

[phowdo] 14/9/2017 15:24

crude looking a bit frothy again.

[my retirement fund] 30/8/2017 14:42

May get a few on next spike up

[my retirement fund] 01/8/2017 16:01

I seem to be able to trade at will with AJ Bell. Its very volatile though with the price often moving several times over a 15 second trading window.

[phowdo] 01/8/2017 15:57

Nice timing MRF!
Was short crude today too as it was the perfect setup this morning.
Dont use 5OIS anymore though as I was having to leave limit orders with my broker that sometimes didn't get filled when they should and the spread is a bit wide.

[ochs] 01/8/2017 08:24

Could well be a good shout.

[my retirement fund] 01/8/2017 07:25

Taking a position again here

[hpcg] 02/12/2016 11:21

I don't think so. I would not be short oil here. The 200 ma is heading up so the trend is gradually upwards. If it breaks above 52 then momentum buying will be immense; see what happened at the end of Feb earlier this year with the break above 33 pushing up to 41. I would think more people are looking at reloading longs after this profit taking. I can only see downside to 46 or so even if there is no break out, so risk reward looks poor on the short side. So time to watch right now IMO. An over extended break out to sell once it rolled over would be a move to 60 or above in the next month. I am by no means predicting this to happen, but to profit from a short you need the vast majority of spec money to be long.

[hlp_4u] 02/12/2016 11:02

Is the over extension in place?

[hpcg] 20/9/2016 13:04

phowdo - pretty much with you on that. I have Feb 2017 down for a low, though not lower than 2016, as a lot of contracts were forward sold / bought when they were sufficiently above spot to guarantee a profit. One needs to look at the candles for reversal signals after strong moves one or another are halted. This is especially the case on the downside. No need for a position here or in 5OIL until there is an over extension.

[phowdo] 20/9/2016 12:54

Buy here when its low £30s and crude high $40s.
Sell in the high £40s when WTI is lower $40s.
Repeat.

Unless OPEC actually freeze production then I cant see high $50s for CL until at least spring next year. Their chatter does impact the price though so I wouldnt be short from these levels until their meeting is done next week.

[ochs] 14/9/2016 17:13

It is certainly volatile at present. Big drop just as UK market closing today.