Oil & Dr Copper

The one position in my current portfolio that is losing money is the crude oil position. Is this a concern? No not really my view is simple, oil is not going to zero at least not for the foreseeable future. There is natural demand for oil it isn’t a product like an iPhone or Twitter. Oil carries a lot of geopolitical inputs into its market price and therefore is prone to over reactions and excessive volatility.

Now I love trading market extremes, this has been my catchphrase for more than a decade. Knowing that oil has a bottom gives me confidence to take on this trade. I haven’t done an exhaustive analysis of how far from its mean and a host of other technical indicators to do this trade. For me it is simply heavily oversold and for me following all the news in the media this is a classic example of what my book calls a “market complex”. Can it get even more oversold, hell yes but that will present even a better buy opportunity. For now I am probably going to keep my powder dry. I have a healthy lead on my benchmark and don’t see any reason to be aggressive.


I thought I would also just highlight the price weakness in copper, as many call it Dr Copper for its qualities in forecasting economic conditions. Copper in the longer term chart show perennial weakness since 2012 and today it is in freefall.

Dr Copper

copper 15 min

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