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QE can also be regarded as a fundamental, which is arguably driving stock markets higher (its the only asset CBs can inflate having already done bonds, property, tech stocks etc).
Central banks are now buying stocks, and some commodity markets have positive correlation to stock markets eg oil.
agree in part.....but thought the US govt cannot slow down QE as they wld go bust if they did, as noone else will buy their bonds. and how do they suppress interest rates without QE? the market will demand rate increase so as the bonds sell - which again will bankrupt the US cos of increased interest payments.
in addition, it is possible the Fed will 'diversify' into equities, if they are not already doing so, as per many other CBs.....
and if there is a stock ramp caused by CB buying (like perhaps now), then the +ve correlation of oil price to stocks should not be dismissed. no doubt you are aware of the basic relationship: stocks up = good economy = more demand for energy = high oil price. not sure how it wld react in a false 'good' economy though.
interested to hear others thoughts.
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a separate question, ron: when you look at seasonal variations over a number of years - do you look at seasonal variation of that contract you are looking to place a trade on? eg selling CL Jul Calls - you will look at the price of CLN futures contract historically (CLN 2012 / CLN 2011 / CLN 2010 etc etc)?
From what i have seen others posting charts on this thread they have only been for say the CL Dec futures contract over last 5/15 years. But i wld have thought this will ignore the issue of contango / backwardation, skewing any analysis of temporal variations. I need to think about this a bit more as getting confused.
I look at the individual month over the last 6 years. Like Jul CL. I have my own seasonal charts from the years since 2006 that show each year on the chart.
There are some charts where the 5 yr or 15 yr will show one thing but the individual months will show some years up some down and no trend. Also the 5 yr is influenced by the abnormal 2008 contract year.
Agree...I have nice bunch expiring worthless this week. Will be selling calls again soon. Might look at a diagonal spread just see how it works out. Will post the entry for that method when I do.
Just example strikes here but look at the minimum difference between the May 31 and June 14 strikes. If you were to write credit spreads on the 1680 and 1690 calls for May 31 options the credit is 1.80. For June 14 the credit is 2.10. Two more weeks of time only gives up another .30 in credit and only .20 for the spread on the puts.
Not worth an extra two weeks of time in my very humble opinion....