201807.12
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COT Black: Futures Curve Twisting

There is an interesting, ongoing academic debate about what shape the crude oil futures curve “should” take. Quite naturally, it seems backwardation is the market baseline. Most people, I think, presume otherwise because of their familiarity with commodities like gold. Backwardation in that market implies a physical shortage. Unlike that precious metal, crude oil is…

201712.07
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COT Black: Bad News For Jerome, Swap Dealers Seem Really Convinced

US domestic stocks of crude oil continue to be quite high and now the futures curve is only a few pennies in the front month contract from being fully backwardated again. Contango is gone, which suggests that oil market is in sight of achieving some measure of balance. That anticipated equilibrium, however, is registering at…

201612.09
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Is There A Lid On ‘Reflation?’

There has to this point been one key element missing from “reflation.” Or maybe it hasn’t been missing, it just hasn’t been consistent with what I would consider that term to mean. The WTI price remains quite range-bound even though there is at the moment only wind at its back. OPEC had just pledged less…

201607.19
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Baseline Tendencies

With no clear direction from any of the Asian influences, it isn’t surprising to see more listlessness in everything from stocks to bonds. The Dow was up, the NASDAQ down, and the S&P 500 somewhere in between. The 10-year UST that had looked primed for receding back into the 1.60’s (for yield) bounced back to…

201607.13
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(Un)Welcome Back ‘Dollar’

On June 3, the May payroll report was released shocking convention by its “unexpected” weakness. It was, and so far remains, the worst headline number since 2009. Because the suggestion of a far weaker labor market than policymakers have been claiming undermined their whole economic narrative, “markets” immediately reversed course and bid as if there…

201601.11 2

Reading Curves and Finding Only the Death of Money

When analyzing the full and true nature of the dissonance between the idea of continued recovery and the financial markets’ scenario for something much worse you realize that this is not a new occurrence. In curve after curve, negativity has been building for years. Financial curves are important because they tell us the health of…

201504.30
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Crude Economics Looks To The Back End

So far, yesterday’s FOMC has not re-ignited the dreaded “rising dollar.” In fact, there hasn’t been much reaction at all as far as funding markets go. Even oil prices remain near their recent highs, with spot WTI as high as $59.40 so far this morning. That is, again, far more a reflection of this latest…

201504.20
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Getting October 15 Right, Even to Crude

It is becoming settled wisdom that the most dangerous aspects of any current financial contours are due almost entirely to some version of HFT or electronic trading. That is undoubtedly true, as far as it might relate to one aspect, but to claim that computers are the single biggest source, let along only source, of…