Why $110? Because that is the target price that my market forecasting system uses......which works pretty well, the math for it being borrowed from the science of ballistics (a good bit of finance actually comes from physics-the prominent Black-Scholes model for example)
Now were one inclined to take a position that profits from the fall of oil, they would have to be advised that doing so is at this writing is a highly aggressive position as at this time, the market trend is still positive.....however, that trade at this moment in time is infinitely wiser than one oriented upwards.
Why do I bring this up now? In response to some of the recent market action, dropping 20 some points in the space of a day's trading.
There have been diaries written which have been very disdainful of the assertion that speculation has been driving the price of oil up through the ceiling, backing up their contentions with a lot of shiny slick chart's and graphs, and what appears to me to be a bunch of cherrypicked data.
Those diaries about a complex subject that a lot of people don't know much about (economics and security market finance) have received a heavy level of unquestioning support as they go along with general leftist inclinations (peak oil), come in from a friendly (no names being mentioned), and the previously mentioned cherrypicked facts, shiny charts, etc. Now there is in one case an issue of a previous correct forecasting but I'll get to that in a moment.
What I am describing above is distinctly WINGNUTTY behavior.....one can substitute above in my parenthesis something to the effect of (scary Muslims), ("Islamofascism") (Rush Limbaugh), (complex geopolitical issues)....and of course the cherrypicked facts and so forth stay the same.......as did another point, dismissing the "speculation-yes" crowd as "tin-foil hats" ("stupid libs").....it's very interesting that the individuals knowing most probably very little about economics and securities markets (complex geopolitics)felt qualified to characterize dissenting views as a bunch of crackpots.
Again, why do I bring this up now....I'd been waiting for a day like this that I knew was going to come (see some of my preceding comments)......seeing the price drop like a bowling ball in a swimming pool, is highly indicative of the market price being held up high by a great big pile of bullshit. If there were actual FUNDAMENTAL demand (people who want to buy oil to USE oil), there would be buying pressure between the top of the market and the point where it dropped off, which would cause a "speedbump", putting up a little fight on the way down to the bottom of the swimming pool. If there are people who ACTUALLY are willing to buy oil to use oil at $148 a barrel or whatever, then there should be MORE at $147, and even more at 146, 145..........all the way down to $128 or whatever where the market stopped.
A couple other things. I mentioned above credibility being assigned to one individual in particular who correctly forecast market direction and in stages, magnitude. Here's the thing....it is VERY possible in financial markets to be right for the wrong reason. For example, innumerable people have purchased stock in Wallgreens, Loews, Menards, various gambling companies.....for a rationale something like "Yea, everytime I go by there the place is packed, and I hear that they are opening up new stores all across the country"......they purchase the stock, and sometime later when it's "up" (after possibly sitting flat for awhile, or being down), smugly pat themselves on the back for being "right"........here's the thing...in reality, the market was already WELL aware of the given securities revenue, and company growth rate, and that wall all priced into the market well before our unsuspecting stock picker bought in....in actuality what probably happened is that the overall market picked up steam, and possibly the retailing/gambling/whatever sector moved into favor......I can document what I'm saying with fancy academic research like the efficient market hypothesis by the way......but getting back on track again, "right for the wrong reason"......markets can really only do 3 things...go up, go down and stay flat, and if you are making semi-educated guesses IN STAGES, your odds of being "right" are still pretty decent.
Let me conclude by saying that I am NOT disputing peak oil, the need to conserve et. all.....TRUST me, I want to take a bazooka to every penis compensating fuck (or his pretentious trophy wife) I see driving a hummer, F250 or Suburban......but assuming that the price of something is right because the "Market Fairy" set it there is the kind of thought that belongs over on redstate......was the market "right" at the point it decided that no money making internet companies were worth $300 a share?
So let's leave the wingnuttery to the wingnuts!
V V
PS I do by the way suspect collusion in the market, with various factions of good ol boys in the GOP, oil industry, financial services industry working together......not equipped however to investigate and prove this contention.