Lyfespan
Active member
The rally in oil has been almost all short covering.
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and this...
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I bet that a few more shorts will cover until the farcical OPEC/non-OPEC meeting that is supposed to happen next month. Once everyone realizes that Iran and a few others are going to want to increase production before freezing (ie. all others will not freeze production as this equals lost market share).
At this point or right before this meeting I would expect short interest to increase again and prices to fall. Probably back to $26 or less since this rally had no new buyers, just shorts covering for profits. According to the Commodities Futures Trading Commission this is the biggest short squeeze EVER. The fundamental problem of crashing global aggregate demand hasn't been solved.
I also expect that the S&P to stay range bound between ~1890-2100. When it comes time for the Fed to raise rates the algo's will have pushed the SP down to corner the Fed. The Fed won't raise and SP will rally. Wash rinse repeat with the sporadic jawboning by Bullard and other Fed officials that will contradict whatever Yellen is saying to add to the confusion.
I bet this continues until after the elections and the next President will be the bag holder. Or if the oil default cycle of highly leveraged energy companies begins we'll probably see negative rates and helicopter money all over the place.
so how should a noob investor play this to make a lil money?