Is the stock market going to tank?

[Bromontana]

found this comment relevant, it drives at what I was trying to articulate earlier.

I keep seeing these "little picture" analyses, but the reality is the world has a 2% oversupply problem with a 50% price response that is going to result in a 20% supply reduction, followed by a 300% price response. We needed to act to stabilize prices in the $80-$90 range to balance supply/demand. This crash in prices is just going to result in a price spike that will surprise almost everybody, and the prices are going to stay high a lot longer then they were low.

blog entry it came from, looking at some of the logistics behind ramping down US supply.

http://seekingalpha.com/article/2794...the-oil-market

[4matic]

http://seekingalpha.com/article/2794...the-oil-market

That's conventional supply/demand wisdom. Reality, imo, is the trillions of dollars in leveraged commodity derivatives is being unwound. Balanced supply and demand may happen at some point but has very little to do with current method of commodity pricing.

[Bromontana]

That's conventional supply/demand wisdom. Reality, imo, is the trillions of dollars in leveraged commodity derivatives is being unwound. Balanced supply and demand may happen at some point but has very little to do with current method of commodity pricing.

True. The better question might be around how the derivatives market will respond to a moderate reduction supply. You could see the exact opposite trade build up and take over. Just getting the sense that regardless of the cause or appropriateness of today's price, it's setting us up for a supply shortage and volatile updraft in the spot price.

[gravitylover]

So give me something that "should" double or at least do really well by the end of the first quarter. I got beat up the last few months...

[mcsquared]

So give me something that "should" double or at least do really well by the end of the first quarter. I got beat up the last few months...

Red. Or Black.

Or pick the over on how often Benny is going to remind us all that he is retired.

[Benny Profane]

Wah wah.

[mcsquared]

I'm good Benny. I got all that I need and much of what I want. I am just amused by how your schadenfreude pivots on a dime. You went from champion of the working class to angry old white man in about 24 hours.

[4matic]

You went from champion of the working class to angry old white man in about 24 hours.

And perma-bear to perma-bull on the same dime.

[4matic]

1.94% on the ten year treasury note. Big move today and the last week for that matter.

[Shredhead]

What are some nice energy stocks to pick up cheap?

I'm buy and hold with a long timeframe.

[4matic]

WTI $47.74, down another 5%. Ten Year note 1.90%

[MontuckyFried]

What are some nice energy stocks to pick up cheap?

I'm buy and hold with a long timeframe.

I'd say any of the big players. Lots of small time operators selling assets to larger, better positioned companies, which will set those guys up to do phenomenally once prices go back up. If I had the spare cash, I'd be having fun buying Royal Dutch Shell (RDS.A), Chevron (CVX), Exxon Mobil (XOM). Also, a smaller company that I think is making some VERY smart moves (and isn't scared in the slightest of today's prices) is Abraxas Petroleum Corp. (NASDAQ: AXAS). You can buy them dirt cheap (2.68 as of this moment), and they know what they're doing. I worked for them years ago, and throughout the years have always found them to do well overall as a company, and have always found their management to operate and proceed very intelligently. A rarity these days. I've heard rumors that Abraxas could be slated to reach $10 this year. Small potatoes compared to the big boys, sure, but at least they're cheap to get into and every indicator is looking good. My personal opinion is that they're positioning themselves to enter the big leagues within the next few years.

[Benny Profane]

I'm good Benny. I got all that I need and much of what I want. I am just amused by how your schadenfreude pivots on a dime. You went from champion of the working class to angry old white man in about 24 hours.

Wha, what? More like getting up at 5:30 every weekday to sorta bored.

It ain't 2008 anymore. Gotta adapt to the times.

[neufox47]

Still waiting to buy USO. Friend who steers most of my investments is telling me he likes SDS better (on Sunday night) and get ready for the crash...

[liv2ski]

SDS is like betting on Red or Black. I guess if the market starts to tank, you could buy it and close the position same day. I have been looking at stuff like Baker Hughes, Schlumberger, etc. And I bet if you bought USO today you would have a double in the next year or two.

[MontuckyFried]

Baker Hughes, Schlumberger, etc.

Again, personal opinions as I base my thoughts on my observations from inside the industry, but that being said, I would probably not invest in Baker Hughes as they are working on a merger with Halliburton and I believe them to be both way overvalued. However, I have faith that Schlumberger will do very well and has a lot of room to grow. That is once things all start to bounce back. I'm wondering if Halliburton is starting to regret making that nearly 35 billion dollar offer to BH right before the crash. Doh!

[4matic]

I sold some bonds today. Had a good run for last twelve months and have been overweight for 18 months (mistake). Re-deploy to cash for now. JNK still well off it's December lows so not ready for high yield yet. Close.. Treasury rates can still go a lot lower.

I don't think the jobs news matters this Friday but reaction will be the tell.

US Dollar breaking out to another new high in the last hour as I type this.

[huckbucket]

As long as we're sharing ... I got some OIL at 11 today. Two more moves to make before putting a bow on that holding.

[Bromontana]

It's like that part in Braveheart where they have to wait patiently for the King's douches to get all up in their grill before raising the spears. Steadyyyyy! Hold!!!!

[liv2ski]

^^^^ So you are going to tell us jongs when to jump in, right?

[Bromontana]

I'll be as transparent as possible. Nothing to do but learn by being open.

76% cash now
24% across suppliers PVA/OAS/PACD (positions are open because producers are off lows set in early December. If those lows are breached this 24% will go back to cash)

Overall I've lost 3% of capital in failed buys of $OIL when WTI was at $66 and then $56. That position plus the current supplier holdings have lost more like 6% of overall $ but I've hedged some losses using $SCO (2x crude short ETF). Very happy so far with limiting downside exposure as crude has tanked about $25/bbl since I started watching it closely.

Take a slow and measured approach. Most professional macro traders will miss the oil bottom, there's little sense in trying to predict it as an amateur. I have no clue if the bottom will be $47 or $17, just trying to be there when higher lows hold. Right now I'm positioned for $40 or $35 crude lows, but am ready to re-position for $17 lows by selling the existing supplier positions for modest losses.

[Benny Profane]

Well, ain't you got it all goin' on.




(Started watching the Wire again)

[4matic]

Junk bonds better hold their lows or hang on to your hat. Cash (or Treasury) is king:

US Monthly Inflation Rate on January 03, 2015*: -0.945%

http://statestreetglobalmarkets.com/...ch/pricestats/

[Bromontana]

Well, ain't you got it all goin' on.




(Started watching the Wire again)

Kima?

[4matic]

Emerging Markets etf (sym: EEM) monthly chart looks like crude oil four months ago. 10% immediate downside risk with potential to 35%.