Down goes the Dow

Expect airline fuel surcharges to rise, with the airlines claiming they paid for their fuel in advance when the oil price was at it's peak. Expect another one immediately when oil prices start to rise again.

coach d wrote:

Given present supply and demand characteristics, oil in the $40 range is entirely plausible. It may not stay down there for all that long (in the grand scheme of things).

This is basically what I'm thinking. My sense is oil (the futures, but I'm not so sure about the companies) will be a buy soon, but not yet--see recent IEA data about that. The market has touched rising support and technicals are oversold (but the AAII sentiment index had 45% bulls and 22% bears last week).

FED rallies are often reversed the next day, so we'll see about the market tomorrow. I see a buying opportunity assuming this week's lows hold.

http://www.schwab.com/public/schwab/nn/articles/Market-Snapshot-As-bull-market-continues-can-economic-growth-be-sustained

here's what I don't get about using fundamentals to explain this oil crash.

Fundamentally, I don't see how you can see oil worth what - $110 3 months ago and $40 today. That makes no sense - the world economy is trundling on -there's no crash, no slowage in economic output.

But oil has fallen by nearly 50% already and you two think fundamentally it could go fall another 20%.

How could the market get that so massively wrong? How did it either artificially elevate oil prices above $100 for years or how did it not see this crash coming? It doesn't pass the bs test for me.

Seems to me this is 20% from the strong USD (which is new) and 80% speculators - when anything gets going in one direction these days, it keeps going in that direction for a painful time.

I bet oil is back unto the $80s in a couple months.

Technical Analysis Sucks wrote:

Well, given the massive drop today, we will see if his prediction of a relatively quick bounce-back will be vindicated.

Today, the Dow gained back 288 of the 528 points it lost in the previous 3 days. We will have to see what tomorrow and Friday bring before passing judgment one way or the other.

Technically it looks like it could get into the $40s. There is a supply glut. Saudi Arabia is not going to cut production. More oil from other OPEC countries is coming on line. Nobody is going to cut production to maintain market share instead.

The global and even US economy is not as strong as you think. You see this in copper, yields, the velocity of money, other leading indicators, even oil itself. Europe is headed for a recession. Russia is a disaster. Japan is stumbling along. China has a real estate bubble. All auxiliary countries won't escape the carnage. Plus, the dollar could continue to catch a bid as more money seeks "safety."

I realize that many Fed up days are fully reversed within a couple of days, but I covered all of my shorts this am fearing Fed BS. And what did we get? A Fed that's not in such a hurry to raise rates after all. Wow, shocking. As I said, I fear a fluff, Santa Claus rally, and I think today's statement may be a prelude to more stimulus. However, a couple of light volume up days, and I may get short again.

I am still holding energy companies, playing an oversold, short-covering bounce. I won't hold them long. Oil is going lower into 2015 in my opinion. The only thing that changes this scenario is a black swan geopolitical event.

Coach D, Liz Ann Sonders has been talking about escape velocity for quite awhile now. She might be right, eventually.

Everyone is right, eventually.

Lastly, I really don't see why today's Fedspeak should've ignited a rally in the market. If anything they blinked, which undermines their credibility. But, if nothing else, it tells the market they are far from pulling the rug out.

Sagarin wrote:

Lastly, I really don't see why today's Fedspeak should've ignited a rally in the market. If anything they blinked, which undermines their credibility. But, if nothing else, it tells the market they are far from pulling the rug out.

right, and when you have a vix at 25, the tinder was very dry and a match even in the room could light it on fire.

and the sales on oil - unbelievable amounts of shorting, I'm sure - they made their money and only needed a hint to start covering their shorts and taking profits.

oil stocks were up 4 to 5% today - massive rally, and these are big stocks - they need a lot of money to move them.

Oil prices were "encouraged" downward for political reasons (read: Russia). When Putin cracks, they'll head back up.

Meanwhile money pours into the U.S. thanks to a strong dollar and weak economies elsewhere. The bull market will not be ending any time soon.

Big Dog Investments wrote:

Oil prices were "encouraged" downward for political reasons (read: Russia). When Putin cracks, they'll head back up.

Meanwhile money pours into the U.S. thanks to a strong dollar and weak economies elsewhere. The bull market will not be ending any time soon.

I agree - Saudi is trying to break 1) russians 2) iranians and 3) frackers

there are reports out of europe that putin has blinked in ukraine, will withdraw in return for easing of sanctions. But the problem is crimea - that ain't going back.

frackers are in big trouble/

no idea about iran.

I too see higher oil prices in the spring.

Sagarin wrote:

I realize that many Fed up days are fully reversed within a couple of days, but I covered all of my shorts this am fearing Fed BS. And what did we get? A Fed that's not in such a hurry to raise rates after all. Wow, shocking. As I said, I fear a fluff, Santa Claus rally, and I think today's statement may be a prelude to more stimulus. However, a couple of light volume up days, and I may get short again.

I am still holding energy companies, playing an oversold, short-covering bounce. I won't hold them long. Oil is going lower into 2015 in my opinion. The only thing that changes this scenario is a black swan geopolitical event.

nice trade Sagarin - outstanding timing

Huah, gentlemen.

US now up 3.5% already from its Tuesday lows.

those hedgies just can't get anything right - I actually feel for them - getting whipsawed regularly.

remember the high vix and relatively stronger small caps vs. large caps that I keep talking about? that I say has been a somewhat reliable buy sign? So far it worked pretty well.

But ja anything can happen...

Technical Analysis Sucks wrote:

Technical Analysis Sucks wrote:

Well, given the massive drop today, we will see if his prediction of a relatively quick bounce-back will be vindicated.

Today, the Dow gained back 288 of the 528 points it lost in the previous 3 days. We will have to see what tomorrow and Friday bring before passing judgment one way or the other.

As of now the Dow is up around 240 today.

If this holds, Mas is looking like a fvcking prophet, and the rest of you are looking like idiots. That guy is probably cleaning up on these swings.

I always had confidence. I'm not sure we'll see Dow 18,000 for a while though.

I'm not talking about confidence, I'm talking about when he specifically said that governance was now aimed at maintaining the markets.

Things go south, and what do you know, here comes the fed, and they shoot right back up. He was so totally right. Just wait until a bigger drop happens, then they will announce another QE. Is it good to be along for this ride? I hope so, all I have is a small 401k.

Technical Analysis Sucks wrote:

I'm not talking about confidence, I'm talking about when he specifically said that governance was now aimed at maintaining the markets.

Things go south, and what do you know, here comes the fed, and they shoot right back up. He was so totally right. Just wait until a bigger drop happens, then they will announce another QE. Is it good to be along for this ride? I hope so, all I have is a small 401k.

Cool beans, Mas. Anything else you'd like to share concerning your brilliance?

Technical Analysis Sucks wrote:

Technical Analysis Sucks wrote:

Today, the Dow gained back 288 of the 528 points it lost in the previous 3 days. We will have to see what tomorrow and Friday bring before passing judgment one way or the other.

As of now the Dow is up around 240 today.

If this holds, Mas is looking like a fvcking prophet, and the rest of you are looking like idiots. That guy is probably cleaning up on these swings.

geez mas - just come back to the fold - we want you back.

but a question - exactly what would have to happen for your predictions to be wrong? you've predicted everything from lift off melt up to catastrophic disaster for western civilization.

whatever happens - you've got it covered.

This bears repeating. The Dow is now up almost 300 on the day.

I wish Maserati would return, I want to hear what the thinks of the bond market, if anything.

good lord I hate the conspiracy theory of stock market returns.

to believe it you have to be so convinced that a cabal of people in dark suits are pulling strings...if not literally, almost so. it's crazy and stupid.

hey - grow up. The world is disorderly and things happen without old men in suits doing them. Deal with it.

do you people so little in control of your lives that you simply MUST believe in a cabal?

4.5% up from the lows on Tuesday

that, mr sagarin, is why shorting is so dangerous in a liquid world, eh?

holy goats the shorts had their heads handed to them

and can you imagine the wealth destroyed in options this week? with the vix falling 32% in two days?

stunning

...and the buy and holders slept through it.

The thrills they are missing...