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Last week I wrote about a bullish sign in the crude oil (CL) market as the commodity is trading in significant contango. Today, there is another overly bullish signal coming to pass – Goldman Sachs (GS) is calling for lower oil prices! Sure we all remember their notorious $200 call in the summer of 2008. And what about their $35 call the following January? GS loves to talk up their book and if they are looking to buy oil, what better way to create some liquidity in the contracts than to tell the world the price is going lower?
Somehow, someway their calls are still given face time in the media. When is the media going to quit being so complicit in GS schemes? I assume they do it to garner “access” but shouldn’t the likes of Bloomberg at least pretend to care about their viewership?
The following is a link for a video on Bloomberg where a guy named Isaac Arnsdorf, who appears to have graduated college yesterday and still can’t afford a comb, discusses why GS is suddenly bearish on the price of Texas Tea.
Why Goldman Sachs is slashing its crude oil forecast
On cue, crude oil experienced a nice reversal day today, opening lower and closing up and high in the daily range. What market technicians may refer to as a Hammer Candlestick. It is a market such as this when I wish I could ignore my trading algo and just buy the commodity but I’ll have to be patient.
For full disclosure, two of my strategies have a paired trade in CL and USO with a slightly long bias towards the CL position.