Wheeee, what a ride!
We’re into our bonus sell-off now as we spent the not-so-merry month of May grinding down to our predicted “Must Hold” levels and, guess what – the markets didn’t hold them! That’s OK, of course – we didn’t call them “Will Hold” leveles – they were called “Must Hold” levels because they had to hold if we were to make any bullish trades at the bottom of the channel.
They did not hold so now we know that the channel is going to be wider than 5%. Now, I will tell you that 7.5% channels are a rarity so we will be surprised, at this point, if we don’t take a trip down to 10% (see Tuesday’s S&P chart for the bigger picture). On Tuesday I said it was “12,200 or bust” and the Dow made a nice run but failed and now we busted all the way back to 12,000 but oil is continuing to defy gravity – or at least pretending to.
Many more Billions were made playing our oil futures shorts yesterday. We’re still following the plan from last Wednesday to break the back of the speculators and it’s getting pretty expensive for them as we continue to short the NYMEX futures, now using the $101.60 mark as our on/off line for short plays.
The key is to get out above the line but pile on at the line and ride it short with reasonable stops. Yesterday we hit it for a ride down to $100.50 (before having to stop out) and then then this morning to $100.75 and now again they have the nerve (7:30) to run it up to $101.60. They can do that in the futures because very few of the 288,000 remaining contracts are in play but a $1 move on 288,000 NYMEX contracts is $288,000 and, on our futures contracts, it’s $5 per penny move per contract so $500 per dollar per contract! You can see why we have itchy trigger fingers on these trades…
Keep in mind, as I have been telling you for quite some time, that the CROOKS (allegedly, just indictments so far) at the NYMEX are running a scam and they have NO INTENTION WHATSOEVER of accepting deliver of even 1/10th of the 367M barrels they had as open contracts last week. In fact, yesterday they traded…
