The Crude Reality

By: Erik Swarts | Fri, Jun 24, 2011
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In the wake of the SPR news yesterday, it's hard to deny that the powers that be don't appear motivated to prick the speculative froth from the commodity bubble. We can debate the merits or shortcomings of these moves from the CME's increase in margin requirements in silver to the Saudi's motivation to flood the market with more crude - the simple truth is they have likely contributed to the path of least resistance in the short term.

Here is an updated chart from a few weeks back with one addition - I added oil because it is leading the way lower at this point. It seems like a foregone conclusion that silver - and by extension the respective currency pairs off of the us dollar will embark on their next leg lower.

 


Disclaimer: Position in UUP

I just joined Twitter. All my trades and occasional market musings are disclosed in real-time here.

 


 

Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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