‘Small losses and sinking ships’

05 August 2015 - 12:25 pm


CRUDE MCX-Crucial Update

05 August 2015 - 12:17 pm


Now at 2961 level.

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A positive surprise from Russia, whose service sector grew at the fastest pace in 20 months in July, in contrast to a pinched performance by the manufacturing sector.

The Purchasing Managers’ Index covering services rose to 51.6 in July, above the 50 level that indicates expansion, and above last month’s reading as well as expectations. But job losses, which have been gathering pace for 25 consecutive months, remain a thorn in the side, while inflation is also rumbling manufacturers.

The composite reading, covering services and manufacturing together, stands at 50.9, with manufacturing still in contraction, as data group Markit – which puts together the well respected PMI surveys - revealed earlier this week.

Markit said of the services data today:

The Russian service sector returned to modest growth during July, with activity rising on the back of the strongest gain in new business for over a year-and-a-half. Still, excess capacity remained a problem, with companies again comfortably able to make inroads into their work outstanding despite cutting jobs for a seventeenth month in succession.

Paul Smith, a Markit economist, said:

The Russian service sector helped to drive some marginal growth of the economy at the start of the third quarter of 2015.

However, companies continue to sit on excess capacity following a difficult start to the year and this continues to lead to job losses. For this situation to be reversed, we need to see activity growth sustained over a prolonged period.

The full services report from Markit is here.

A slight fade at the close sees USDJPY unfazed

  • +93.70
  • open20490.15
  • high 20715.48
  • low 20469.87
  • USDJPY 124.40

It may be the great magic trick of the management consulting world: No matter how complex the situation and how iffy the outcomes may appear to be, just draw a two-by-two box for your client. Define what options to write on the x and y axes – and then the client can decide.

Of course, a good consultant will carefully pre-shape the answer options, so that the answer the client will arrive at is more or less given. Best of all, the magic trick works, whether it concerns a pure business situation or a matter of public policy.

The top option always ends up in the top right of that box, the worst in the lower left. In between, in the top left and bottom right corners, you have the choice between two middle options.

The problem with it all is that, neat as these boxes are, in the real world you will know which box you landed in only after landing in it. Even if you go well prepared with the help of trip advisor or other services you might end up in a place in the box where you didn’t want to end up.

The same holds true for German chancellor Angela Merkel. She clearly hoped not to end up in the lower left box when she embarked on the mission to save the euro. “The euro is our common fate, and Europe is our common future” might well be her biggest mistake in her 10-year reign of Germany – and some would say of Europe. >> Read More


Yesterday it was ADANI ENTERPRISE……………………………………………



If you agree with me that not a lot changes in the markets you won’t mind that I site an old study and will see the benefit of this little reminder of mine.

In 1974 Blair Stewart completes a study of 8,922 brokerage customer accounts.

The following mistakes are found:

1) Speculators showed a clear tendency to cut profits short, while letting their losses run.

2) Speculators were more likely to be long than short, even though prices generally declined during the 9 years of the study.

3) Longs bought on weakness, and shorts sold on strength, indicating they were price-level rather than price-movement traders.

If you are currently struggling in your trading you might like to consider these three well repeated mistakes and develop a plan that you can follow so as not to fall foul of them.

6 Myths Driving Oil Prices Down

05 August 2015 - 10:30 am

1. Iran Agreement to flood market. FALSE. OPEC has even stated that the natural 1.0 to 1.5 million barrels per day (MB/D) rise in demand in 2016 will more than offset any production rises in Iran which, contrary to earlier reports, won’t come on line until early 2016. In addition, China will open up refining to third party, non-state-owned refineries which will reportedly add another 600,000 B/D in demand in 2016.

2. Iran floating storage will flood market. FALSE. As initially reported in the media, it was Iranian oil floating in storage but it now turns out to be low grade condensate as stated by PIRA on Bloomberg a few weeks back and then supported by tankers attempting to move inventory to Asia. Later media reports corrected earlier ones that the storage is in fact condensate while failing to report on its grade.

3. U.S. production resilient. FALSE. The latest EIA data refutes this as does data via EPS calls at Whiting Petroleum (WLL) & Hess Corporation (HES). Yes, some are increasing production such as Concho resources (CXO), but in the Bakken both companies confirm that 2H15 production will decline due to lower rigs and depletion. HES raised production for the year as a result of 1H15 production being higher than expected by some 5 percent. All in all, next week should see further production drops.

4. U.S. Inventory resilient. FALSE. EIA data would have fallen last week by some 4MB as it did this week ex import surges and continues to be overstated by “adjustments” made to production that amount to millions of barrels in daily production.

5. Cushing inventory fears revived. FALSE…see above.

6. OPEC supply will continue. The Saudis, as OPEC’s largest producer and largest contributor to growth in 2015, have already stated that they will reduce output by 200,000-300,000 by summers end. Yes true, OPEC as an entity won’t formally announce a cut but isn’t it misleading to report this?


An Australian court on Wednesday revoked the government’s environmental approval for one of the world’s biggest coal mines under construction in the Australian outback by Indian conglomerate Adani Mining.

Environmentalists hailed the ruling against the controversial Carmichael mine as another setback for the project, estimated to cost up to $16 billion, which they say threatens two vulnerable species and will endanger the Great Barrier Reef.

Adani, which recently suspended work in a number of areas on the mine as it awaits government approvals, attributed the ruling to a “technical legal error” and said it was confident the matter would be rectified.

The Federal court ruled that the environmental approval granted to Adani in July 2014 by Australian Environment Minister Greg Hunt’s office failed to include conditions to protect the yakka skink and ornamental snake.

The Environment Department said Hunt would reconsider his approval in six to eight weeks, after taking into account an assessment of the impact on the two species.

The challenge was launched by Mackay Conservation Group in January. >> Read More

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Technically Yours,
Team ASR,
Baroda, India.