Archive for the ‘Energy’ category

The Electricity Exchange

 


I was invited to Prague, to speak at a conference on electricity, along with other regional experts. Until recently, electricity was traded as part of equity, but now Europe, the US and even India have started trading it as a commodity. Technology, utility infrastructure and user sophistication are some of the drivers for the electricity market. Europe is the leading electricity initiative. Today, electric cars earn $1,000 a year as they are plugged back into electricity grids to assist grids as a buffer for peak time. Electricity is traded based on anticipated demand of the quarter ahead (Front Quarter), as 24 hour electricity benchmarks (The German Baseload), etc.

Climate, currency, consumption, catastrophes and Greece drive the business. Henning Gloystein, energy editor at Thomson Reuters, in his presentation, brought out the variables and their likely influences on the sector. How would the sector behave if the euro strengthened or weakened? He highlighted coal as a dark horse in the energy segment. Though the fossil fuel is underplayed in policies, it continues to suggest resilience, especially as energy becomes expensive. Another aspect was the stagnating nature of electricity, which was stuck up in a multi-year trading range…

This article was written for Business Standard

To read this article and for regular updates on behavioral finance subscribe to Orpheus Research Time Triads Update.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.


Natgas Grand Supercycle (1945 - 2010)

Natural Gas is moving up in a five wave structure since 1945. Commodities are known to have extended fifth wave structures, making the complete wave structure as a nine legged formation. A fall of Natural Gas below previous grand supercycle IV (circle) low of 1995 at 1.55 would negate all commodity secular bull and inflationary expectations. It would also suggest a drop in the global energy consumption.

This does not seem to be the case now….

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

This article is written for Association of Technical Market Analysts.


Alpha Global - The Pair Grid

A technician always has a challenge of coverage. We are trained for speed to spot opportunities. One can look at BSE 30 components, but looking through BSE500 or say RUSSELL 3000 chart by chart is a tough task. The information is growing exponentially like everything else and systems are needed to know where to look.

Orpheus Performance cycles are a novel way to manage a large universe of coverage that works on the idea of mathematical time and cyclical performance. The worst performers should outperform and best performers should underperform.

Today we have matched the best with the worst in the pair grid. The horizontal menu is the top performers and the vertical components are the worst assets. Alpha Global covers 120 assets. This includes commodities, currencies, DOW 30 components, Global Equity Indices and sector representations.

This feature is written for Association of Technical Market Analysts

Enjoy the latest Alpha Global.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Time Analytics research products.

Performance cycles (Rieki) is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. Rieki is a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Time is a social construct and we see time through the life and nature around us. Understanding time can not only give a unifying theory to research of a few thousand years, but also help us understand the world we live in. Time evolves, oscillates and continues. Time comes before everything, but we don’t see it. We just feel it. We believe what we see and this is why understanding what we don’t see is a challenge. Understanding time could bring more than a conventional thought down, it’s a revolution, which could rock the very foundation of economic thought or the geometric structures Euclid laid down in 300 BC. We are at the start of the journey, but if time is indeed the real mathematics, we could see high accuracy in time forecasts.

Stop loss and exits are activated at 4%

Coverage Global: Dow 30 components, Global Indices, ETF SPDRS, Commodities


Sugar, Carbon Rieki Structures

REUTERS RICS:  SUGA.L, CARB.L

Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 50. 1 is top relative performance and 50 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Vivek is a qualified Chartered Accountant (Institute of Chartered Accountants of India). Vivek is passionate about Technical Analysis, a self taught Elliott Wave Technician. He conducts technical analyis on a variety of financial instruments on his blog vivekoutlook.blogspot.com. He will be covering commodities for Orpheus Research.
Vivek has worked with BDO Consulting in Oman, as Business Consultant working on feasibility studies for expansion projects for companies. He has worked with Irevna – Division of CRISIL conducting fundamental analysis - sell side analysis - of Information technology companies.

Crude completing B or new leg up? Rieki suggests bottoming

WAVES.OIL is a perspective product published monthly. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTERS RICS: BRT-, WTM- , .XLE , CVX.N, XOM.N , IPNG , NG-P-CALPerformance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 50. 1 is top relative performance and 50 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Vivek is a qualified Chartered Accountant (Institute of Chartered Accountants of India). Vivek is passionate about Technical Analysis, a self taught Elliott Wave Technician. He conducts technical analyis on a variety of financial instruments on his blog vivekoutlook.blogspot.com. He will be covering commodities for Orpheus Research. Vivek has worked with BDO Consulting in Oman, as Business Consultant working on feasibility studies for expansion projects for companies. He has worked with Irevna – Division of CRISIL conducting fundamental analysis - sell side analysis - of Information technology companies.

Crude - The leg down

Trif Rares, the contibuting columnist for the Waves Energy. Rares got interested in forex trading and followed it up with an early interest in technical analysis. While practicing technicals he covered many other global assets and found similar patterns and formations across global assets. This is when he moved to Elliott Wave analysis. Now he specializes in energy assets. Rares graduated in finance and followed it up with post graduate studies in management. He combines Elliot Wave with classical technical analysis tools. He correctly depicted the May 2010 top in Oil and is forecasting a large multi year bottom in natural gas. You can follow up his work on Ticks Global and Orpheus Energy Research reports.

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL


Brent key reversal suggests a minor bounce

Trif Rares, the contibuting columnist for the Waves Energy. Rares got interested in forex trading and followed it up with an early interest in technical analysis. While practicing technicals he covered many other global assets and found similar patterns and formations across global assets. This is when he moved to Elliott Wave analysis. Now he specializes in energy assets. Rares graduated in finance and followed it up with post graduate studies in management. He combines Elliot Wave with classical technical analysis tools. He correctly depicted the May 2010 top in Oil and is forecasting a large multi year bottom in natural gas. You can follow up his work on Ticks Global and Orpheus Energy Research reports.

Orpheus Columnists

To access member’s area or Orpheus estore click here.

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

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Oil at 300 - Can or Can’t

More than focusing whether Oil at 300 can’t happen, the society should prepare for a scenario “what if it can happen?”

I made a technical and time cycle case for Oil’s last dip to 60 before it heads to 300, suggesting that the commodity cycle is 30 years long and considering commodities worldwide bottomed around 2000, a continued upside of commodities including Oil till 2015 is a possibility. My observations were also in context of a previous forecast, “The Oil rocket” published globally on 12 May 2008 both on print and the world wide web. In that feature I suggested that after Oil falls to sub 70 levels (from then extremes at 125), it should head above 300.

In May 2008, Oil was so much on market’s mind that I got mails regarding Oil hijacking retirement plans and top brokers soliciting buying call options. That was then in May 2008. Oil dropped to 39 and the second part of the forecast started to unfold from Dec 2008. Now that market woke up to the reality that pension plans got disrupted by sovereign risk rather than Oil, brokers might have another strategy on Oil. In the new context defending a May 2008 forecast is not easy. The technical reasons I gave had little penetration as the web community bombarded the forecast. So I will stick to plain speak to address the queries of the non believing majority.

The story that above 125 dollar a barrel renewables get attractive quoted 50 dollars as the inflexion point a few months back. The question here is how can you quantify that 300 can’t happen before renewables are embraced by the society? Thinking green does not just need Oil prices to go up, it needs an extreme pain when electricity bills start to matter. And that may not happen till the society pays multiple times of what it pays for Oil today. It might be only then that we the investors might really care about the global warming and have a desire to save the world. It will be only then we might think of switching of the LED of our computer screen and teach our children about energy conservation.

Thinking that an article appearing in media regarding Oil 300 is an attempt to scare the society and make money is a naive self concocted conspiracy theory. Institutions don’t make money like this and if only society was that easy to scare. There have been speculators in war times. People don’t stop speculating in war times, what scare are we speaking about here, when all that matters to us as a society is to make a bit more profit.

Another reason sighted against OIL 300 is the US energy self sufficiency. Who judges the time till US becomes energy self sufficient? It took more than a few weeks to plug the Oil leak. Estimating time is hard. And a lot can happen till efficiencies come in. Regarding death of Oil at 300, one should speak to Theodore Modis (Futurologist). Assets don’t die they just become unpopular. How can you quantify when Oil become unpopular? And why can’t it go to 300 before it starts to get unpopular? In an old time Oil 40 “scared” everybody, and then the scare shifted to “Oil 100″. Why can’t it go to “Oil 300 scare”? Oil 300 is just a small aspect in the larger picture.

Oil 300 evokes more ideas about some life style discomfort than about its impact on the society. Only a few might understand that Oil 300 could happen owing to a war like situation? But why and when should a war happen? These are more uncomfortable questions a society may not want to ask or address. If you read cycles literature there are studies on war cycles too.

Another idea against Oil 300 is that it can’t happen because of demand and supply. Demand and supply is an illusion. Gold does not just move based on demand and supply of gold. It also moves in anticipation of markets across time frames, shorter to larger. Gold also moves up in greed and fear. How do you quantify what’s driving gold, greed of fear? Behavioral finance suggests markets don’t know how to subtract and add. A majority assigns narrow intervals when it comes to targets. So how can we measure demand and supply? And how is Oil different from gold anyway?

The real debate is to think what if Oil 300 was probable. Rather than focusing on Oil 300 can’t happen. Credit crisis can’t happen. Bankruptcies can’t happen. Emerging markets correcting 60% can’t happen. Multi decade rise in interest rates can’t happen. Food prices rise can’t happen. Inflation can’t happen. Oil 300 or Gold 3000 can’t happen. Illusions and contesting forecasts are easy, studying 3000 years of interest rate history, studying inflation cycles, proving cyclicality as a mathematical science and separating the probable from the possible very tough.

Enjoy the latest Waves.OIL 

Trif Rares, the contibuting columnist for the Waves Energy. Rares got interested in forex trading and followed it up with an early interest in technical analysis. While practicing technicals he covered many other global assets and found similar patterns and formations across global assets. This is when he moved to Elliott Wave analysis. Now he specializes in energy assets. Rares graduated in finance and followed it up with post graduate studies in management. He combines Elliot Wave with classical technical analysis tools. He correctly depicted the May 2010 top in Oil and is forecasting a large multi year bottom in natural gas. You can follow up his work on Ticks Global and Orpheus Energy Research reports.

Orpheus Columnists

To access member’s area or Orpheus estore click here.

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


The Oil Algorithm

On one side we have computer algorithms, which are blamed for Dow 1000 point move, all the panic in volatility and the 10 dollar move on oil etc. On the other side we have the hands on Elliott approach, which does not need high number crunching computers. Orpheus has been covering Oil for since early 2005.

In May 2008 (oil made a high of 133) we wrote “The Oil Rocket”. We said “Nothing can rise exponentially, even if it’s OIL. The asset’s exponential rise is more an indication of an ending trend and not vice versa. The OIL rocket can never become a satellite, no asset can. And the almost ninety degree inclination to new highs is destined to collapse. Few Wall Street brokers looked at this as a great time to solicit mass mailing lists for OIL CALL options. Well we don’t subscribe to the OIL end era yet, but if the best broker suggests buying CALLS with such confidence, we definitely don’t know something he knows or something everybody knows. At this stage what we can see is a sentiment euphoria which is hard to sustain. The five legged fractal structure both starting 1999 till 2008 and the smaller five legged sub structure starting in 2007 seems complete. We don’t see OIL above $ 125 and it’s time for PUT and not a CALL. Oil should push to sub dollar 70 levels.”

While we talked about 70 dollars Oil while it was at all time highs, we also mentioned that after the fall the move up to 300 should begin. In the feature “Oil 2012” carried on 15 Aug 2008 we said. “Oil is headed to 300 and higher till 2015.”

Oil fell to sub 40 in Dec 2008. In our 18 Dec feature on WTM vs. Brent we said “Above 40 reversal on OIL does give us a good turn around case. And we continue to look higher on OIL.” 26 Jan 2009, in “Oil ready to reverse” we said “50 is a psychological level and a push back up to 50 is an intermediate reversal. A move up on OIL could push OIL up in higher territory near 70.” Oil move up till Jun 2009. In Aug 2009 “Gasoline Futures” we said, “Oil is completing a flat and after a dip down should push up to new highs”. Successive reports on Oil on 28 Oct, 20 Oct mentioned “Prices should continue to push higher till 90”. Dips around 75 levels were pointed out as corrections. 16 Nov 2009 we said “ The sub minor correction should end soon and push higher to 85-90 levels”.

On 23 Nov 2009 update we mentioned that a termination pattern ending diagonal was in. On 14 Dec we said “another attempt at 80-90 prices before turning lower or is the top already in.” 10 Jan 2010 we talked about potential oil topping with targets back to 60. 9 Feb, “Chevron tops at 80” was released. 17 Mar 2010 we said “Oil was completing wave B up after which the C wave down should begin” 14 Apr “Oil remains topping”. 28 Apr “Intermediate reversal is here”. 02 May Oil topped at 86 in our anticipated resistance zone 85-90 and pushed lower in one week 10 dollars lower to 75.

The current ongoing move on Oil should move to anticipated targets till 60. As ending diagonal formations generally retrace completely. This should be our last and best opportunity to buy Oil for a move up till 2015. Oil 300 remains our preferred view. What this means for economics? What this means for society? What this means for inflation is again not too hard to understand. You really don’t need an algorithm for this.

For regular updates on Oil and other energy assets subscribe to Orpheus Energy Research. Enjoy the latest WAVES.OIL

Trif Rares, the contibuting columnist for the Waves Energy. Rares got interested in forex trading and followed it up with an early interest in technical analysis. While practicing technicals he covered many other global assets and found similar patterns and formations across global assets. This is when he moved to Elliott Wave analysis. Now he specializes in energy assets. Rares graduated in finance and followed it up with post graduate studies in management.  He combines Elliot Wave with classical technical analysis tools.  He correctly depicted the May 2010 top in Oil and is forecasting a large multi year bottom in natural gas. You can follow up his work on Ticks Global and Orpheus Energy Research reports.

Orpheus Columnists

To access member’s area or Orpheus estore click here.

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


WAVES.OIL - Intermediate reversal is here

To access member’s area or Orpheus estore click here.

WAVES.OIL is a perspective product published once a week. The report covers BRENT, WTM, XLE (Energy SPDR), top energy stocks, Natural Gas and related FUTURES. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators. REUTERS RICS: BRT-, WTM-, .XLE , CVX.N, XOM.N, IPNG, NG-P-CAL

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA