Goldtent TA Paradise

Whatever You’re Trading , You are trading Oil !

1. YYZ says:

   February 25, 2016 - 1:55 am at 1:55 am

   A couple other observations:

   Political stress among producers.
   Saudi is the key player which can profitabely sustain production at these prices. As months pass cracks in their solidarity with other loss-producers are likely to appear, not to mention possible expansion of the nearby Syrian conflict. Alternatively an event or shock could also take the pressure off prices resulting in oil-up mkt-down (sabotage of storage facilities/tankers in the gulf). The threats to Saudi’s policy are great in my opinion.

   Secondly, as a believer in mean reversion of the value of world $ vs. world energy, I’ve observed that the gold/oil ratio which is already at an all time level (45 – stretched even more than the great depression), thus oil is either dirt cheap or gold s/b at $500 – from my study of the GOR chart in most cases of extreme mean reversion it is OIL that has the biggest move not Gold (barring Central Bank crisis’ of course). If PM bulls are correct – the current oil price is at or near a breaking point (even if a spiking fall WITH the market, I’d anticipate a big rebound). Since my investment horizon is over 18 months, aside from miners, I’m also looking at energy entry points.