Thu 8 May 2008
If Oil Is At $123 Now, What Will It Be When A Hurricane Hits?
Posted by RichSlick under Financial Safety, MMO
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Hurricane seasons is coming up and if one happens to blow through the Gulf of Mexico disrupting shipping, refineries, and production rigs during the summer what do you think the price of oil will hit? If oil hits $150/bb this summer what will that do to the Dow?
I’m dreaming of dancing dollars and the sweet cha-ching of the register…..
Don’t say you weren’t warned……..
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May 8th, 2008 at 9:56 am
So what WILL $150/barrel oil do to the Dow? Or is that the big unknown? Sorry, financial newbie here…
May 8th, 2008 at 10:03 am
If we weren’t living in bizarro world, the Dow should drop below 12,000 down to say 11,600 or lower….perhaps hover around 11,000.
But whenever something horrible happens stocks seem to rally so the Dow may jump to 14,000 on “good news” the economy is so “robust” and oil demand so high….
In either event, it’s important to set yourself up to profit either way: DDM and DXD can’t be beat!
May 8th, 2008 at 10:22 am
Won’t DDM and DXD cancel each other out? Or are you talking about your multi-dimensional matrix profit theory to exploit the small arbitrage opportunities? Are you still planning on writing more about that? I’d be really interested (who wouldn’t?).
May 8th, 2008 at 12:33 pm
I’m Long DDM and sell calls short.
I’m Long DXD and sell calls short.
They don’t cancel each other out because markets move either up or down, buy low sell high and get insurance/premiums with calls.
May 8th, 2008 at 2:11 pm
I hope you’ll bear with me, I still don’t quite understand. Are you long on both DDM and DXD at the same time? Or are you choosing your spots and only in DDM or only in DXD as you see fit?
May 8th, 2008 at 3:46 pm
I purchased DDM at a certain point and DXD at a different point. By selling calls, I’ve been averaging my way to lower entry points either way.
Quite honestly, shorting for long periods of time doesn’t work too well as I experiment with my arbitrage matrix theory but we’ll see over the summer and higher oil to see the final results. My time window was 120 to 180 days with this little theory.