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[sludgehound]

Why Oil Could Be Primed For A Huge Short Squeeze

http://finance.yahoo.com/news/why-oil-could-primed-huge-202117096.html

My take on this below, then bit of the short piece at link above.
Decade long graph is mega bearish once again. TSO had strong day! Unusual for leaders like it and XLE to be upish and ETNs just flat. If/when ETNs kick in with their 3X values it's party on.
Hey ain't that darn ROSG drugger a royal asspain! Played it years back just before R/S that quickly ran to $20+ before rapid drop back. That was on heels of getting coverage for one of its rare orphan drugs. Now that was a hell of a squeeze day after day.
Around that time I read a trader point out that very rarely will such a low ball drugger ever resume such action at a later date. One & done. These often just get bought out, fold, quit or bk. Been that way here since that blast up. OXGN been sorta that way too.
Funny how some stocks get stuck in groove like SIRI PLX.
Maybe time for oil to get some late summer believers. UWTI DWTI my hope chest lately. First time I've seen these charts lately. Hadn't realize quite the extent of this decline. Mexico trade deal may have impact. And PBS did a piece of how East Africa sits on a pile of crude, but of course good luck getting access in that war torn area.
US quietly pulled out Patriot missiles from Turkey to have in reserve should N. Korea or Iran get super antsy. Oil hasn't had a major reason for monster squeeze for a while now so lot of bull build up there. Bulls won't tip hand until something breaks, then train is gone.

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The current ratio of 1.6 represents the lowest net long exposure to oil since September of 2010. With this much institutional money currently shorting oil, it’s no wonder that the United States Oil Fund ETF (NYSE: USO) is down 32.2 percent in the past three months. However, any uptick in prices in coming weeks could trigger a major short covering scramble that could send prices surging.

Recent History
After peaking at over 14 in summer of 2014, the hedge fund long-short ratio nosedived when oil prices collapsed. In early March, the ratio dipped below 2.0 for the first time since 2010, but that didn’t last long. Within three months of hitting that multi-year low, the ratio had bounced above 4.0, and the price of WTI had surged 21.5 percent.

Now, a little more than two months later, the ratio has recently hit fresh multi-year lows.

Will History Repeat Itself?
The last time the hedge fund long-short ratio was as low as 1.6 was in early September, 2010. In the six months from September 1, 2010 to March 1, 2011, the price of WTI surged 34.7 percent.

With this much bearish sentiment and positioning in the oil markets right now among institutional investors, it would likely not take much of a catalyst to trigger another short squeeze in oil prices like the one that occurred earlier this year.