They can cut production, but if the economies are just tanking are people going to be willing to pay 70 dollars a barrel? Couple of year ago people could with the easy money. That era is long gone now. I don't think they can do it now. We can have a jump in oil but a long term uptrend will not be likely IMO.
My point was the cuts won't drive up price if the oil producing countries don't obey the cuts. They'd rather undercut each other while continuing to drive prices down.
Just discovered some technically interesting things: I scaled back the ES chart to a 6 month time frame and redrew the downtrend line (that I have talked about previously). Then I zoomed back in to a 60 day time frame and ... Looks like we're still out of the danger zone. A break above resistance at 887 would be very bullish in my view. Likewise, falling below 850 would be a danger sign. But that's not why I posted this chart. The reason I posted it was what happened today. Futures hit resistance (887) in premarket, and then the market sold off in reaction. But the market bounced *precisely* when it reached the downtrend line at 858. So far it looks like market equilibrium is holding well (whipsaws aside), and a modest amount of good news could be sufficient to send things significantly higher. Of course, good news is hard to find these days... Another major item of consideration is the Euro, which has broken well out of its bottom pattern and is currently testing resistance at around 1.37. The momentum is showing a little overbought at the moment. How this resolves could be key to where the markets go in the coming days, as well as the direction of crude and commodities. The question here though is ... is this evidence of the market pricing in a possible rate cut, or will a rate cut trigger a breakthrough?
The first three stories I read today: 1. Consumer prices fall by 1.7% 2. GS posts $2.1 billion loss 3. Housing starts drop to 18.9% Couple that with the $50 billion hedge fund fraud, I just suspect alot of sellers on the market. Or course we're green so go figure.
I don't think those are news items significant enough to move the market -- they're not really unexpected. However, I would not be surprised at all to see the market sell off after the Fed rate announcement today.
Technical analysis is addictive sometimes. I'm seeing what looks like a picture perfect double bottom on the SPX 30 min ... again, if we break out above 887 things could be rather bullish. So far though, the market doesn't seem to have the willpower to do so, so I remain skeptical.
if you see a bad number come out this month just expect that the market has already priced it in. the fed is the wildcard today. i hope we rally cause i want to be short.
