Tuesday, January 6, 2015

WTI Crude falls below $50


Ouch, Oil just peeked under the $50 level.

I predict this is going to be a very tough area of fighting because I am sure there are TONS of stops hiding around here that never thought oil would drop this low. A bounce is definitely in the cards.

However, I am inclined to believe that we are going to have big volatility and sideways action for a while.

Even we do bounce, it all means nothing to me. I still think Oil can stay lower for longer. Until the hedges come off, which takes time, this is a totally speculative market. And if we do stay lower for longer, there is going to be a lot of pain in the US market.

Well, just how bad is this $50 oil for the US Shale industry? Well, take a look yourself.


I am resisting like hell to catch a falling knife of all the oil and oil-related companies. I just keep telling myself that as each day goes by and more hedges come off, we're closer to real price discovery of supply and demand in the system.

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