Slipping into the Futures

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First off, be sure to read the prior post if you didn’t already, since it covers a variety of improvements here on good ol’ Slope of Hope.

I’ve made no secret of my long-term bearishness on crude oil and the energy sector in general. Manipulation of markets comes in all forms, but crude is special, in that its price is artificially elevated by a successful global cartel. Crude is about $35/bbl right now, where economic reality should be placing it at, oh, say, about $10/bbl. Thus, there is a persistent tension between natural market price and synthetic cartel-sanctioned price. Observe how this strain is getting severe in the form of this absolutely gorgeous rounded top.

As I’m typing this, shortly before the opening of equities, crude is down nearly 5%, and far more importantly, it is slipping under support. The way these things always go – – and it’s almost laughably predictable – – is at some point, some member of the cartel can’t take the pain anymore, and they start to cheat. That starts a snowball effect, and before you know it, crude is actually zipping toward its organic market price instead of the fiction that OPEC and others have dreamed up.

My favorite chart to make this point is the long-term continuous futures contract. Hey, you tell me – – look like it’s revving up for a fantastic bull market to triple digits, or is it as doomed as doomed can be? I’m voting doomed.

It seems almost impossible to believe, but there are only four trading days left until the (hopefully………) election results are upon us. I’m 146% committed with 60 positions, and I suspect the only place I’ll be getting crazy-aggressive is in my virtual trading account.