Option Investor
Printer friendly version
Jeff Bailey : 11/18/2007 11:05:14 PM

Click around on that 10:37:50 link. "Oil imports" (US #1, Japan #2, Germany #3, France #4, Italy #5) and "Usage per person by country" (US #1, Canada #2, Finland #3, Belgium #4, Australia #5). "Oil Producers" (Saudi Arabia #1, Russia #2, US #3, Iran #4, China #5) and the figures a bit surprising.

Can begin to understand the GDP impact on US when oil rises, or falls. From what I've read, HIGHER oil price actually a slight positive impact on US's GDP.

Jeff Bailey : 11/18/2007 10:47:24 PM

Hmmm ... just the "Top 5" account for roughly 30 million bbl/day.

Dollar weighting would be about 54.5%. Yuan about 17.1%. Yen about 14.7%. Euro about 7.2%. Ruble about 6.5%.

Jeff Bailey : 11/18/2007 10:37:50 PM

Oil Consumption By Country ... US is #1, China #2, Japan #3, Germany #4 (euro), Russia #5. Link

Jeff Bailey : 11/18/2007 10:34:49 PM

Interesting read.

Going back to the gold standard? Or the euro?

Ah, but that is just another problem isn't it?

Is OPEC really concerned with the dollar's decline having oil prices rise?

Switch to the euro? Wouldn't oil prices fall?

Does OPEC want a different currency, or does Iran and Venezuela?

The "weighting" idea makes some sense.

I'd weight it by what country, or group of countries (those that share a currency) USES the most oil.

Maybe reweight the basket every 5-years?

What that might actually do is bring about CHANGE as to DEMAND for the fossil fuel.

Jeff Bailey : 11/18/2007 10:21:44 PM

OPEC Interested in Non-Dollar Currency ... AP Story Link

Keene Little : 11/18/2007 10:09:51 PM

The 60-min charts for the four indices look very similar. If the bulls can do something this week we could see a relatively strong rally (shown in dark red on the charts) which would have me looking for a 50% or 62% retracement of the Oct-Nov decline (or to the downtrend lines from October). If the rally eventually rises higher than the 62% retracement levels then it could turn even more bullish (as shown in green).

But the more immediately bearish possibility, shown in pink on each chart, calls for only a small rally Monday morning and then a turn back down and head for new lows. This scenario deserves to be watched closely since it could take a lot of bulls by surprise and turn into some hard selling. The DOW has its downtrend line from Oct 31st very close--just above 13200 which matches where the bounce off last Thursday's low would have two equal legs up (13203): Link

The downtrend for SPX is higher, closer to 1469 currently, so there's more upside potential for that one: Link . One reason I'm considering the more bearish possibility (pink) as high potential is due to the pattern of the bounce off last Thursday's low, as shown on this 5-min ES (S&P 500 emini futures): Link

The whole price pattern from last Thursday is quite volatile and corrective (3-wave moves) until the move up from Friday afternoon. That last move up (labeled as wave-C) needs to be a 5-wave move and needs one more move up to complete the 5th wave. That would then complete an A-B-C bounce off Thursday's low. This is where it gets interesting--two equal legs up (wave-A = wave-C) is at 1468 (futures price here) and then within wave-C the 5th wave = the 1st wave at the same 1468. When I see this kind of Fib correlation with what I consider a clear EW pattern I pay attention.

This 5-min chart says a brief rally Monday morning will finish the 3-wave correction to the Tuesday-Thursday decline and then price will tip back over and head for a new low. It could be setting up a 3rd of a 3rd wave down in the move down from Oct 31st. That possibility says the selling could get very strong. It'll be the first place I'll try a short play and see if it works out.

NDX and RUT have the same possibilities as the other two indices and using the RUT chart as the next example, two equal legs up from Friday morning's low gives us 774.67 for an upside target on Monday. This is a little above the broken uptrend line from August 2004 (which acted as resistance for Friday morning's bounce) and could set up the next steep selloff (pink). If it manages to keep rallying then upside targets for the others could be a better guide for where to next. Link

The bulls can hope for a big gap up on Monday morning that keeps going but unless the rally can gain some speed keep an eye out for an early failure. Any rally above NDX 2063 (two equal legs up from Friday morning) would have me watching for the other upside target (such as 2120) shown on its chart: Link

Keene Little : 11/18/2007 10:04:22 PM

Monday's pivot tables: Link and Link

OI Technical Staff : 11/18/2007 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Market Monitor Archives