Which Way Wednesday – Finally Fed Up?

It’s a Fed day today!

That, of course, means MORE FREE MONEY and the markets are giddy with anticipation ahead of the meeting – especially since we had more poor housing data yesterday and that’s exactly the kind of bad news that is good news as it keeps the Fed in easy-money mode a little longer.  

As you may have guessed, we shorted oil this morning. The July contract (/CLN4) expires on Friday and, as you can see from the chart, we continue to find great profits in the sell-off that we predicted would come last week. We went over some Futures Trading Tips in yesterday’s live Webinar as well as the new, bullish positions we’ve added to our Long-Term Portfolio. Much as we rail against what we firmly believe will ultimately be a disastrous policy – you simply can’t fight the Fed and we’re not trying to – it’s much more profitable to go with the flow. 

Going with the flow is exactly what we’re doing with our oil trades as they STILL have 103M barrels worth of FAKE orders open for July delivery (actually, about 20M will actually be delivered so “only” 80M are fake at the moment) and that is down from the 172M FAKE orders that were open on Friday morning (the sell-off that we predicted would come last week).  

 

The total open interest (745,000 contracts) has not changed much since since Friday (712,000 contracts) – all they are doing is rolling the July Fake Orders to August, Sept and Oct Fake Orders to keep up the illusion of demand.  This despite the fact that US Commercial Crude Supplies are at an ALL TIME HIGH 399.4Mb and, if you think Iraq supply concerns are to blame – you are wrong there too as a report released YESTERDAY shows 2.8Mb of oil being exported in July – that’s UP 11% from this year’s average.  

It’s a scam and we know it’s a scam and we can make money playing off the fact that we know it’s a scam because we know all their tricks.  As I noted last week, we prefer the Robin Hood side of the trade – taking advantage of the greed of the manipulators rather than the foolish retail traders who stand in their way but we’re not completely disinclined to play the upside, when the play is obvious.