The Lonely Trader

Watchlists for the weeklies…and, Warren Buffett is an Asshole! #SP500 #SPY #ES_F #SPX

In Watchlists on September 13, 2015 at 19:05

Note: Some of these instruments do not trade in weekly options.

A few more opportunities this week than last to catch some range contractions. The broader market seems indecisive, given prevailing macro events. What I can’t understand is the dissonance between the odds of a rate hike and what media are reporting. The chance of a hike was at a bit less than 30% (as of the Friday close), yet there are headlines everywhere about traders and investors being nervous over a rate hike. One article I read on Friday quoted an analyst’s supposition that Yellen and Co. could re-introduce QE, framing the narrative as an authoritative monetary policy option. Bloomberg click-bait. Unbelievable, really. In any case, if the Fed doesn’t raise rates now, the election may delay action longer than most currently expect.

Still fuming over an interview in which Warren Buffett said we could ship unskilled people off to Afghanistan. That really got to me. Here is an American icon perpetuating the myth that military folk are stupid and unskilled today…and in a casual sort of way suggesting that we can send them off to die because the market doesn’t value them as much as other folk. Of course if you ask him, he will say that wasn’t what he meant — but that is the f*ing reality and he needs to be held accountable for it.

He clearly has no clue about the real economic system that supports his own livelihood. None at all. I’m sure he feels justified in his own mind. There are *some* unskilled people everywhere and someone has to wash the dishes and trim the hedge. Having said that, most service members who deploy are actually above average, effectively trained, and technically skilled — because a technologically advanced military requires it. (Further evidence that Buffett is completely out of touch with reality.) This distracts from my real point, however. Morally, Buffett is a black hole. And so is the media. Nobody is talking about it. Nothing was taken out of context. This privileged, arrogant a*hole, with his “awe shucks I’m just a humble man from Nebraska” patois, actually said it. Don’t be fooled. He’s a crypto-fascist — the sort of feller that Marines like to take out back and beat the s*it out of.

Listen for yourself. About seven minutes and twenty seconds in. The Bloomberg interviewer didn’t even flinch. Seems all the Twitter trading and finance gurus agree, which is why they aren’t saying anything. Screw these elitist jerks. These people are not Americans. They do not deserve the free society that supports their businesses, much less an all-volunteer, professional military that defends them from Tyranny. This is not my country anymore. If you can stomach it, watch the interview here:

As for the markets — going to wait until Monday and possibly Tuesday, per the usual, to see what opportunities present themselves. The SPX and Crude charts are still valid in my opinion.

EquitiesEquities 9-13-2015 8-44-18 AM

ETFs 9-13-2015 8-44-34 AM

Watchlists for the weeklies

In Watchlists on September 8, 2015 at 18:40

Note: Some of these instruments do not trade in weekly options.

Notice that almost the entire market had an inside week last week. This is very uncommon. Ranges in a few notables have already expanded as of Tuesday evening. I’ll be picking my spots carefully tomorrow AM.

Equities20150908 Equities

ETFs20150908 ETFs

Looking at the floor in crude oil #CL_F #BRN #USO

In Chartwork on September 7, 2015 at 19:05

Crude oil is making the rounds in the Twitterverse. I’ve pretty much given up on GS estimates. Raymond James has been dreadfully wrong the past couple of years. Looking for other analysts to track — not to blindly follow guidance, but to help me think about the problem of directional bias. Rystad has so far proven fairly prescient with its analysis and provides good explanations of how and why.

So far, I’ve been disappointed with the IEA — they seem more like a chop shop now than in the past. EIA just revises their projections down with markets. I’m not sure their projections are anything but some sort of regression analysis of historical prices, rather than a multifaceted model that accounts for the myriad of major drivers of price per barrel. And then there is OPEC…. One day I really need to dig deep into modeling crude oil prices. I probably wouldn’t do much worse than OPEC.

Enough with the throad clearing.

Crude oil is at a mid-point in the current range. This is not the place for someone like me to take a position or swing trade. I’d rather wait for price to come to a key level that offers a good risk profile.

According to Rystad, the production floor for Brent is $30. They have a number of reasons for positing this figure. That puts my floor for WTI at $26. BRN prices below $50 are unsustainable for producers going into 2016, which is equivalent to about $45 for WTI. In 2016, Rystad is saying producers need prices above $70 for BRN, which is about $65 for WTI. (The spread varies, but I’m using $5.00 as a guesstimate.) Seems like a reasonable hypothesis. We are essentially at the projected average price for 2015 WTI according to the EIA ($44.62). Pretty close to my derived number ($45) for what is unsustainable on a long term basis for producers (according to Rystad).

CL 9-7-2015 9-23-38 PM

Looking out three months, the probabilities for the price of WTI to be above $50 is 16% (Oct), 46% (Nov) and 62% (Dec). I would like to see price fall to $36.50 and buy for $50. Price could very well hit $35 or $55 from where the market current sits. If it drops, I’ll be ready with a resting limit order. I’ll adjust as conditions change. If price drops to $26, I will take a much bigger risk — I doubt it will drop that far, but anything is possible in this market.


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