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Msg  343548 of 353326  at  8/4/2021 4:00:07 PM  by

romm


Overview and random thoughts

When people say "the easy money was made", I'm thinking they are lucky, but I'm a bad investor as I never saw easy money in my accounts. Every $1000 was earned by hard work.
 
Those who follow my EIA report assessments over the years may remember that I was rarely pessimistic on EIA reports...and rarely bearish. I always find silver linings even in weak from the surface reports.
 
Today's report was not an exception, but it added some uncertainty to already 2 other bearish events this morning:
 
 - very weak job creation reported by ADP - 330K private jobs in July vs. 653K expected
- Delta outbreak in China 
 
The weak job creation is worrisome, we will see the BLS report on Friday for confirmation that also includes government jobs. If confirmed, we may have seen the inflation peak in June or July (that was the Robry's insight).
Bonds were spiking up in recent days while yields plunged to record lows. 
 
I'm still in the opinion of the Fed to start tapering very soon despite slowing inflation because I see the Fed's QE action as matching budget deficit figures that are in  decline rather than inflation.  
 
The Delta outbreak in China is an excuse for taking profits in my opinion. Overall new cases are so low that are below almost any US State, and fully controlled by CCP.
 
But the EIA report on the top of other two events was too much to ignore for the energy market. 
As I was posting during the day -  I see signs of "not enough tightness" in oil market, high demand seasonality is masking normalized demand. Excluding seasonality the picture is not so clear.
 
Failing Iran's negotiations is positive, but OPEC+ 400K bpd monthly additions on autopilot are worrisome. Demand may not rise to fast.
For example OPEC+ will add 1.2 mm bpd in October from July figure.
Seasonality will remove ~2 mm bpd from demand.
So the pandemic demand recovery must rise by 3.2 mm bpd to compensate for both.
It is too optimistic I worry., OPEC+ would be better off just waiting for 3 more months before adding more. But they are never patient.
 
Of course they can change any minute and I hope they will. 
 
I'm typically in the cautions mood in the August-October season. This time - no exception. I didn't buy anything this morning and last few days. In fact I was lightening up slowly trading positions and have finished the job this morning, some at a loss.
 
I want to regroup trading positions and to assess the general and oil markets before implementing a strategy.  We may have 3 months.
 
I'm in no way see it as the end of the bull market, more like as a blip like several general market blips in 2020 recovery rise. 
 
I haven't touched any LT position.
I also reallocated large cash amounts to my energy accounts from virtually 100% cash position in all other sectors as I see no value there especially in front of the Fed tapering, but more opportunity in energy in the next 3 months.
I will be looking to add new names on declines if happens.
 
Will see how it pays out. GLTA
romm 
 


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Msg # Subject Author Recs Date Posted
343631 Re: Overview and random thoughts old_doodle_bugger 1 8/5/2021 12:45:16 AM


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