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PaceAdvantage
10-10-2014, 06:01 PM
After the cash markets close at 4pm eastern, the futures markets keep trading until 4:15. While there was a decent little rebound after the 4pm close, the last few minutes saw the futures fall back off a cliff and finish at the low of the day...should make Monday's opening very interesting...

I guess I need to start rethinking my theory in that other thread that the market isn't going to tank in October...although some will argue it's already tanked, it hasn't...

thaskalos
10-10-2014, 06:22 PM
Brace yourselves for a bear market of epic proportions.

lamboguy
10-10-2014, 06:26 PM
today was the first time that it broke a trend line since 2009, s+p should drop about 600 points from here and fast.

JustRalph
10-10-2014, 06:45 PM
Don't worry......Barry will save it

badcompany
10-10-2014, 07:57 PM
Yes, this week sucked big time. I got knocked back to where I was in July, but, a little perspective before you head for the ledge:

http://i95.photobucket.com/albums/l142/thinlizzy21/2DE2017C-3CC4-4B50-9D26-218141CFCC02_zpsewwxv8dw.png (http://s95.photobucket.com/user/thinlizzy21/media/2DE2017C-3CC4-4B50-9D26-218141CFCC02_zpsewwxv8dw.png.html)

badcompany
10-10-2014, 07:58 PM
today was the first time that it broke a trend line since 2009, s+p should drop about 600 points from here and fast.

What trend line are you talking about?

_______
10-10-2014, 10:33 PM
Some of the energy stocks I hold are already down better than 10% from July. If we see $75 WTI as some are predicting I expect they'll be down even more than that going forward.

Low oil prices are like an across the board tax cut for the middle class. Companies are (so far) coming out with upside surprises on earnings and improved forward guidance. Yeah, I know it's early. But Alcoa is a pretty good bell weather.

Valuations aren't cheap but the idea of a huge drop from these levels seems counterintuitive.

If this the start of an extended bear market it'll be the first one I've seen in what looks to be the beginning of a Goldilocks economy.

I'm taking my lumps and staying long.

ReplayRandall
10-10-2014, 10:55 PM
Don't worry......Barry will save it

It sure won't be his dog, Old Yellen.......:faint:

turninforhome10
10-11-2014, 04:33 AM
Will someone explain to me why it is good for wholesale inventory reports to be so high. on the one hand it is good that people are at work making these inventories, but no one is buying?
http://www.businessweek.com/ap/2014-10-09/ahead-of-the-bell-us-wholesale-inventories

Robert Goren
10-11-2014, 10:05 AM
The market is long overdo for a correction. I expect one of 10-15%. The good news is oil is down to $85 a barrel.

On side note; I have noticed the better the republicans are doing the polls, the worse the market does. Maybe investors are wising up to what the republican ideas do to the stock market.:rolleyes:

lamboguy
10-11-2014, 10:07 AM
What trend line are you talking about?you just drew it

badcompany
10-11-2014, 10:31 AM
you just drew it

That's the 200 day, in that chart it's 40 week ma.

It's broken that many times since then. In this chart it's represented as the 9 month sma:

http://i95.photobucket.com/albums/l142/thinlizzy21/1DAE4117-E253-4496-B4D4-DF6C4AB8B1A1_zpship4hoqi.png (http://s95.photobucket.com/user/thinlizzy21/media/1DAE4117-E253-4496-B4D4-DF6C4AB8B1A1_zpship4hoqi.png.html)

As an aside, moving averages have to be taken in context. When markets remain flat for an extended period, long term averages can be broken without much of a move. That's the case, now, when a 5% down move caused the 200sma to be broken. A typical down move for the 200 to be broken is 8-9%.

In fact, this why I suspected the 200 would be broken. It's a way for market makers to accumulate stock as many players use the 200 as a sell signal, and to do so without giving those on the sidelines a shot at getting in at a lower level.

If they want my long term holdings, they're gonna have to take the market down another 10%.

JustRalph
10-11-2014, 11:45 AM
The market is long overdo for a correction. I expect one of 10-15%. The good news is oil is down to $85 a barrel.

On side note; I have noticed the better the republicans are doing the polls, the worse the market does. Maybe investors are wising up to what the republican ideas do to the stock market.:rolleyes:

Good news unless you're paying 55 a barrel to get it out of the ground. At 79 a barrel, 30-40 % of fracking becomes a losing game. At 73 a barrel fracking stops in all but the most profitable areas.

In Odessa Tx they are shaking in their boots. But there also needs to be a correction in the employment market. Low oil prices will do that

_______
10-11-2014, 12:01 PM
Will someone explain to me why it is good for wholesale inventory reports to be so high. on the one hand it is good that people are at work making these inventories, but no one is buying?
http://www.businessweek.com/ap/2014-10-09/ahead-of-the-bell-us-wholesale-inventories

The answer to your question is in the link you posted. Inventory didn't go up because no one is buying. It went up because business's are playing catch up with demand. It indicates buisness optimism.

_______
10-11-2014, 12:26 PM
Good news unless you're paying 55 a barrel to get it out of the ground. At 79 a barrel, 30-40 % of fracking becomes a losing game. At 73 a barrel fracking stops in all but the most profitable areas.

In Odessa Tx they are shaking in their boots. But there also needs to be a correction in the employment market. Low oil prices will do that

The "average" cost of production for North American shale that I've seen is $65. I know there's a lot of concern over production at lower price levels as you can see it in the oil service sector, which makes sense.

Remarkable to my mind is that you also see it in the North American refiners. So long as the spread between WTI and Brent exists they should be profitable on the arbitrage regardless of WTI's price. People are tossing the baby out with the bath water.

JustRalph
10-11-2014, 01:16 PM
The "average" cost of production for North American shale that I've seen is $65. I know there's a lot of concern over production at lower price levels as you can see it in the oil service sector, which makes sense.

Remarkable to my mind is that you also see it in the North American refiners. So long as the spread between WTI and Brent exists they should be profitable on the arbitrage regardless of WTI's price. People are tossing the baby out with the bath water.

Heard an interview this morning with a oil field superintendent on local radio while taking wife to work. He says a barrel in Odessa costs $55 to get out of the ground. He went on to quote the numbers from my post above. He says lots of his workers are worried after watching fuel prices drop this week. He predicted gas below a $2.70 a gallon within 10-15 days here in Texas.

It's interesting to watch grocery prices go up, fuel prices come down, meat prices all sky high, restaurants are getting killed on food cost. Does one offset the other? The stock market is jittery. Tech stocks poised for a huge drop? Some say yes. Overdue?

My opine is that printing money destabilizes things. It takes months for the markets to react. More QE on the horizon? They say no......but how do you stop in this volatile environment?

badcompany
10-11-2014, 02:27 PM
CLR is the top player in the Bakken and the stock has had ~30% pullback. IMO, that's more than a "correction." That's a "New Normal."

http://i95.photobucket.com/albums/l142/thinlizzy21/8E08B9CC-521D-404B-A729-171A530E5638_zpsfzan2b2b.png (http://s95.photobucket.com/user/thinlizzy21/media/8E08B9CC-521D-404B-A729-171A530E5638_zpsfzan2b2b.png.html)

_______
10-11-2014, 02:42 PM
Heard an interview this morning with a oil field superintendent on local radio while taking wife to work. He says a barrel in Odessa costs $55 to get out of the ground. He went on to quote the numbers from my post above. He says lots of his workers are worried after watching fuel prices drop this week. He predicted gas below a $2.70 a gallon within 10-15 days here in Texas.

It's interesting to watch grocery prices go up, fuel prices come down, meat prices all sky high, restaurants are getting killed on food cost. Does one offset the other? The stock market is jittery. Tech stocks poised for a huge drop? Some say yes. Overdue?

My opine is that printing money destabilizes things. It takes months for the markets to react. More QE on the horizon? They say no......but how do you stop in this volatile environment?

http://www.businessinsider.com/crude-oil-cost-of-production-2014-5

Chart above from Morgan Stanley in May. The Permian basin is still pretty inexpensive compared to other North American oil fields.

badcompany
10-11-2014, 02:56 PM
http://www.businessinsider.com/crude-oil-cost-of-production-2014-5

Chart above from Morgan Stanley in May. The Permian basin is still pretty inexpensive compared to other North American oil fields.


One of the top players in the Permian. Not a pretty chart.

http://i95.photobucket.com/albums/l142/thinlizzy21/9D04E790-645F-43FC-9CAF-3F42AA75E4FA_zps58ntppsk.png (http://s95.photobucket.com/user/thinlizzy21/media/9D04E790-645F-43FC-9CAF-3F42AA75E4FA_zps58ntppsk.png.html)

_______
10-11-2014, 03:19 PM
One of the top players in the Permian. Not a pretty chart.

http://i95.photobucket.com/albums/l142/thinlizzy21/9D04E790-645F-43FC-9CAF-3F42AA75E4FA_zps58ntppsk.png (http://s95.photobucket.com/user/thinlizzy21/media/9D04E790-645F-43FC-9CAF-3F42AA75E4FA_zps58ntppsk.png.html)

The exploration and production companies are taking it on the nose. It doesn't help that Saudi Arabia and now Iran both announce they will cut prices to protect market share.

badcompany
10-13-2014, 02:38 PM
The exploration and production companies are taking it on the nose. It doesn't help that Saudi Arabia and now Iran both announce they will cut prices to protect market share.

That said, stepping back, PXD, is still up about 70% for the past two years. I'm sure all of us here would gladly accept that type of return, going forward.

I've found the only way I can get those return is by sitting tight when the going gets tough.

http://i95.photobucket.com/albums/l142/thinlizzy21/C2BA461F-7E75-4FB9-A735-33A72CC6162C_zpsyut8qt6c.png (http://s95.photobucket.com/user/thinlizzy21/media/C2BA461F-7E75-4FB9-A735-33A72CC6162C_zpsyut8qt6c.png.html)

_______
10-13-2014, 04:35 PM
There is an interesting dynamic going on within OPEC. The Saudi's are such a large share of the cartel that they can control the price of Brent by cutting back on production. They've been willing to do it in the past to protect junior partners who need a higher price to sustain their otherwise unsustainable economies (Venezuela in particular).

They now appear to be willing to let Venezuela drown to put a leash on American on shore production and as a warning shot across the bow of others that may be thinking of making the investment in fracking.

I agree that, in the long run, most of these companies will be fine. Oil isn't going away in our lifetime or our grandchildren's. And energy is the one sector where multiples actually look cheap. But it may be a painful few years if Saudi Arabia keeps the tap open for a sustained period.

I don't know what the fundamentals are on Pioneer but some of the more leveraged on shore E and P's may be sold cheap to larger firms with less debt if this goes on a few years.

I still like transport and oil services best. Off shore is ridiculously cheap right now. I bought ESV at 38 and will be glad to wait out the glut in floaters with a reasonably safe 8% dividend.

badcompany
10-13-2014, 05:01 PM
Good post, Don.

My question is what price do the Saudis need to sustain their own economy?

_______
10-13-2014, 05:17 PM
I don't know what other factors go into that equation but the cost of pumping a barrel of oil onshore in Saudi Arabia range from less then $10 to just under $40 depending on the field.

It's ridiculously profitable for everyone involved there even at $70.

One thing that would help domestic producers would be lifting the ban on exports of American oil. That would at least mitigate the spread between WTI and Brent. That could happen. I wouldn't bet on it but it's at least on the table for discussion.

Robert Goren
10-13-2014, 06:53 PM
I don't know what other factors go into that equation but the cost of pumping a barrel of oil onshore in Saudi Arabia range from less then $10 to just under $40 depending on the field.

It's ridiculously profitable for everyone involved there even at $70.

One thing that would help domestic producers would be lifting the ban on exports of American oil. That would at least mitigate the spread between WTI and Brent. That could happen. I wouldn't bet on it but it's at least on the table for discussion.Not until after the election. Nobody running for office would vote that. Not many would even after the election.

_______
10-13-2014, 07:16 PM
Not until after the election. Nobody running for office would vote that. Not many would even after the election.

The legislation passed in the 70's establishing the export ban explicitly gives the executive branch authority to rescind it. There have already been 2 shipments of light condensate authorized. A full lifting could be done with the stroke of a pen.

For a variety of reasons I won't bore you with, the Saudi actions in announcing price cuts with intent to protect market share should make it easier for the administration to go forward with a full lifting if they're inclined to do so.

In my opinion it would be good for consumers but there is plenty of opposition from domestic refiners who benefit from the current spread.

On the political front I could see it benefitting incumbent Democratic Senators in Louisiana and Alaska so I wouldn't put it happening before the election out of the question. Not that anything like that ever enters into these decisions...

badcompany
10-13-2014, 07:46 PM
Do you think the current dollar rally is a factor? While the price of oil is dropping, the dollars the Saudis are getting are worth more.

_______
10-13-2014, 08:13 PM
The conventional wisdom is that a strong dollar hurts all commodities. History seems to support that.

badcompany
10-13-2014, 08:24 PM
The conventional wisdom is that a strong dollar hurts all commodities. History seems to support that.

It makes sense.

The greater the demand for cash, the lesser the demand for things.

badcompany
10-20-2014, 06:37 PM
S&P has quietly snuck up 4% from the low. Is it a dead cat bounce or the start of another rally? Stay tuned.

highnote
10-21-2014, 05:25 PM
S&P has quietly snuck up 4% from the low. Is it a dead cat bounce or the start of another rally? Stay tuned.

I will go long tomorrow -- Wednesday. Next sell target is 1864, but that could change if S&P goes higher. Sell target is 4% below most recent high.

The buy target is 4% above most recent low.

I actually like to use the Value Line Index because the range is tighter and there are 1675 stocks that make up the value line index.

So I use the 4% model on both the sp and vl.

badcompany
10-21-2014, 06:11 PM
I picked up some SPY, last Thurs for a short term trade. Looking like a winner so far. Never sold any of my long term positions.

That said, I wouldn't say it's a slam dunk that we don't revisit the bottom for another shakeout. I had my best single day of the year, today. Usually, when that happens, bad times are around the corner. ;)

badcompany
10-21-2014, 06:19 PM
The "average" cost of production for North American shale that I've seen is $65. I know there's a lot of concern over production at lower price levels as you can see it in the oil service sector, which makes sense.

Remarkable to my mind is that you also see it in the North American refiners. So long as the spread between WTI and Brent exists they should be profitable on the arbitrage regardless of WTI's price. People are tossing the baby out with the bath water.

I'd be interested in the "median" cost. From my understanding, the highly profitable wells are confined to the "core" areas. So, it could be a situation where the big players are having overly large influence on the average, and $80 might be enough to contract the industry.

ReplayRandall
10-21-2014, 10:37 PM
I will go long tomorrow -- Wednesday. Next sell target is 1864, but that could change if S&P goes higher. Sell target is 4% below most recent high.


Unless you call going "long" a period of 5 trading days, you'll be selling quicker than you anticipate. The "Volatility Stakes", sponsored by the NYSE, starts tomorrow, post time 9:30 AM EST...M/L favorite- Entry#1-The Bears/#1A-The Shorts.......and remember to please play responsibly.

Tape Reader
10-21-2014, 11:00 PM
Unless you call going "long" a period of 5 trading days, you'll be selling quicker than you anticipate. The "Volatility Stakes", sponsored by the NYSE, starts tomorrow, post time 9:30 AM EST...M/L favorite- Entry#1-The Bears/#1A-The Shorts.......and remember to please play responsibly.

Cool post. Please splain.

ReplayRandall
10-21-2014, 11:11 PM
Cool post. Please splain.


On the undercard is the "Commodities Stakes", sponsored by OPEC.....M/L favorite is #1 Crude Oil, with #2 Gold Bricks the wise-guy horse........

Tape Reader
10-21-2014, 11:30 PM
On the undercard is the "Commodities Stakes", sponsored by OPEC.....M/L favorite is #1 Crude Oil, with #2 Gold Bricks the wise-guy horse........

Thank you. As a technician, I would refer to it as “possible resistance ahead.”

ReplayRandall
10-21-2014, 11:33 PM
Thank you. As a technician, I would refer to it as “possible resistance ahead.”


Perfectly stated......

lamboguy
10-22-2014, 02:14 AM
On the undercard is the "Commodities Stakes", sponsored by OPEC.....M/L favorite is #1 Crude Oil, with #2 Gold Bricks the wise-guy horse........big vote happening in Switzerland November 30. the referendum wants to
bring back all their gold that is stored in foreign countries and discontinue central bank gold sales. they also want the currency to be backed by a 20% gold holding. ,
poll came out yesterday with 45% of likely voters in favor of these measures. 40% against.

ReplayRandall
10-22-2014, 09:13 PM
big vote happening in Switzerland November 30. the referendum wants to
bring back all their gold that is stored in foreign countries and discontinue central bank gold sales. they also want the currency to be backed by a 20% gold holding. ,
poll came out yesterday with 45% of likely voters in favor of these measures. 40% against.


So Lambo, after reading the above Swiss referendum and its possible implications, roll the dice and tell me, what square do you think Gold will land on?

badcompany
10-23-2014, 05:52 AM
So Lambo, after reading the above Swiss referendum and its possible implications, roll the dice and tell me, what square do you think Gold will land on?

For Lambo, Gold knows but one way:

http://biblicon.org/14z672/wp-content/uploads/2014/04/UpUpcover.jpg

lamboguy
10-23-2014, 10:26 AM
So Lambo, after reading the above Swiss referendum and its possible implications, roll the dice and tell me, what square do you think Gold will land on?
the way gold works is that when you want to make a profit you have to sell the stuff for cash. i have been accumulating gold since 1999, never sold one ounce of it, i have hedged a few times and have caught almost a third of the decline off the top, i have taken most of that money and bought more gold with it. at this point in time, i am not hedging. there is a good case to be made that gold can fall to as low as $1050 per ounce. i am thinking more along the lines of $1120. from there it would have to get into a race above $1380 and we would be out of the 3 year old bear market. there is also a good case that gold won't move until the end of 2015 cycle wise.

for me i don't need the money, so i can wait it out. i strongly believe that we will see science fiction numbers in gold going forward.

thaskalos
10-23-2014, 03:19 PM
for me i don't need the money, so i can wait it out. i strongly believe that we will see science fiction numbers in gold going forward.
How can a horseplayer not need the money? Lambo...you must be doing something wrong.

_______
10-23-2014, 04:20 PM
Does anyone else feel like this V shaped recovery in equities is bad news short term?

We barely had a sell off to start with and now this? Still long but expecting another leg down soon. Think it will be a sign of a healthy market if we can get to 10% below August high this time.

badcompany
10-23-2014, 06:16 PM
Does anyone else feel like this V shaped recovery in equities is bad news short term?

We barely had a sell off to start with and now this? Still long but expecting another leg down soon. Think it will be a sign of a healthy market if we can get to 10% below August high this time.

I believe you are underestimating the magnitude of that sell off. We're talking about trillions in market cap, world wide.

Looking at the stock market as a merchandising operation, I can see two scenarios for a sharp 10% sell off followed by an almost instantaneous bounce back.

1. The sell off triggered massive margin calls among highly leveraged entities, namely hedge funds, freeing up huge amounts of stock, which market makers quickly ran up to force the funds to buy back at higher prices or sit out for fear of missing the boat and arriving just in time for another leg down.

2. The sell off incited massive short positions to be taken by hedge funds, causing market makers to initiate a powerful short squeeze, compelling hedge funds to cover at higher prices.

Which is more likely? I have to say #1, which is a bullish indicator The timeframe seems too short for Hedges to accumulate such large short positions, which would be a bearish indicator.

My current status:
Long stocks
Short Nat Gas
Patiently waiting for another opportunity to short Silver.

ReplayRandall
10-23-2014, 06:23 PM
My current status:
Long stocks
Short Nat Gas
Patiently waiting for another opportunity to short Silver.


Long stocks=Agree starting Nov. 5th(10% discount)
Short Nat Gas=Agree in moderation
Patiently waiting for another opportunity to short Silver=Not going to happen, as ascension will be a "controlled" climb.

_______
10-23-2014, 09:40 PM
You are probably right, Bad. I know there is nothing magical about a 10% pullback but it still feels to me like confirmation of a healthy market.

Short silver, huh?

Reminds me, RIP Nelson Bunker Hunt.

highnote
10-24-2014, 10:39 PM
I was about 80% in cash just before the mini crash. Then I put about 10% of my cash back in the market on the recent bump up. So I'm about 70% cash, 30% equities.

I probably should have bought a lot more equities, but I'm playing it safe. I figure it's better to miss some upside gains than to lose a lot if the market crashes.

There will be more days ahead to buy. I'll probably keep putting 10% into the market on every down day as I think the trend is still to the upside.

Burls
10-26-2014, 08:17 PM
I'm all in VTI right now.
I think we're going to see a new high, but as soon as the S&P hits 2050, I think it's time to get out.
VTI is at $101.15 right now
I've get an order in to sell it all at $106.

Tape Reader
10-26-2014, 08:45 PM
I'm all in VTI right now.
I think we're going to see a new high, but as soon as the S&P hits 2050, I think it's time to get out.
VTI is at $101.15 right now
I've get an order in to sell it all at $106.

You really mean $105, right?

Burls
10-26-2014, 09:30 PM
You really mean $105, right?
Actually, I had it at $105, then I changed it to $106.
I may change it back to $105.
I'm not saying the S&P will plummet the second it reaches 2050, but I just can't see much upside after that.

Tape Reader
10-26-2014, 09:40 PM
Actually, I had it at $105, then I changed it to $106.
I may change it back to $105.
I'm not saying the S&P will plummet the second it reaches 2050, but I just can't see much upside after that.

Seriously, I meant it as a joke. I wouldn’t advertise here what you really want to buy/sell something at. It could work against you.

Burls
10-27-2014, 12:52 AM
Seriously, I meant it as a joke. I wouldn’t advertise here what you really want to buy/sell something at. It could work against you.
Why not?
I think it's a pretty safe bet that no one on these boards can affect the entire market.

badcompany
10-28-2014, 08:33 PM
Two weeks ago, the idea that the market could end October up for the month was inconceivable. Now, you'd have to say it's a favorite to do so.

http://i95.photobucket.com/albums/l142/thinlizzy21/1b686ade119df9257375ffe878e56d4f_zps6ae3c85b.jpg

PaceAdvantage
10-29-2014, 12:39 AM
It's nutty how this market has been gapping and running lately. But the market exists to try men's souls... :lol:

Wonder what the FOMC will bring to the table tomorrow.

badcompany
10-31-2014, 07:37 PM
Long stocks=Agree starting Nov. 5th(10% discount)
Short Nat Gas=Agree in moderation
Patiently waiting for another opportunity to short Silver=Not going to happen, as ascension will be a "controlled" climb.

We'll see. Went short SLV @15.87

http://i95.photobucket.com/albums/l142/thinlizzy21/1b75d57770f5b78030ba69c68a6aff7b_zpse8bb024a.jpg

Burls
11-14-2014, 04:20 PM
I'm all in VTI right now.
I think we're going to see a new high, but as soon as the S&P hits 2050, I think it's time to get out.
VTI is at $101.15 right now
I've get an order in to sell it all at $106.
I got out of VTI today at $105.15.
I'm guessing there's just too many 'automatic-sells' in place for the S&P 500 to break 2050 right now.
I just can see any upside.

_______
11-14-2014, 06:13 PM
I got out of VTI today at $105.15.
I'm guessing there's just too many 'automatic-sells' in place for the S&P 500 to break 2050 right now.
I just can see any upside.

If you subscribe to the "biotech gives a leading indicator to the overall market" school, you made a great call.