By Nadeem Walayat of marketoracle.co.uk My forecast conclusions are for the oil price bear market to have made its final bottom BY early February 2016 and embark on a bull market that will target a trend towards a late year high of $60…This oil price trend and the stock market’s oversold state are also converging towards a stock market bottom…for 2016 in a time window that probably runs for another 2-3 weeks. [Here are the specifics.] My forecast conclusion is for the crude oil price to trade within three distinct trading ranges for 2016: $20 to $40, $35 to $50 and $62 to $40. Furthermore the trend pattern imposed onto the t...
The urge to store oil is irresistible. Lots of folks responded to our last column “Oil’s Slump: Boon Or Bust For Refiners?” with questions. While many opinions were jockeyed on the fate of refiners’ stocks, some readers wondered why so much oil was being stockpiled in the first place. Well, first and foremost, because it’s a money maker. And not just for refiners. For arbitrageurs, too. A “cash-and-carry” trade in oil can, sometimes, provide a return better than high yield bonds and lottery tickets. The trade relies on the contango – the positive curve — in oil futures pricing. When spot oil trades at $32 a barrel wh...
It seems we may have bottomed in the oil market, and a lot of shorts are starting to get nervous considering their large short trading book right now. Can you say short squeeze? Video Length: 00:16:47...
What is the stock market’s current psychology and what is the one indicator that best capsulizes it? Perhaps no yardstick best measures the stock market’s mood than the CBOE Volatility Index or VIX (Chicago Options:^VIX). Also known as the “fear index,” the VIX represents the expected volatility (up or down) in S&P 500 stocks (NYSEARCA:SPY) over the upcoming 30 days. When fear is up, the VIX is up and when the VIX is down, the market is less fearful. (Audio) How do stock prices compare to history? It’s impossible to invest directly in the VIX index, which leaves traders with a few choices: VIX exchange-traded products (ETPs) ...
Normally, we think of frontiers as boundaries that mark and often regulate our passage from one realm to another. In finance, though, the one frontier worth mentioning – the Efficient Frontier – isn’t a place through which we pass. It’s a destination, supposedly the only place we should want to be. Whatever traveling we do is back and forth along the frontier with the aim of picking a one spot at which we’ll settle down (and move to a new one later on if or when our preferences change). NOTE: This post focuses on Wealthfront because its web site provides for the greatest level of insight as to how it works. Bear in mind, though, t...
Cintas (CTAS) is one of the highest scoring dividend stocks in our database for Dividend Safety (98) and Dividend Growth (99). The company has proven to be an extremely durable business with roots dating back nearly 90 years, and it has rewarded its shareholders with higher dividend payments for 32 consecutive years. This is really one of the most consistent sales and earnings growers around, and it operates in a very slow-changing industry where it maintains leading market share. At the right price, we would certainly considering owning CTAS in our Top 20 Dividend Stocks portfolio. Business Overview CTAS started out as a laundry service for...
As a picture is worth a 1000 words, we let the chart speak. Biotechnology peaked last July. The IBB ETF, representing the sector, has dropped from around 400 points to 263 (last close) in a bit more than half a year. That is a drop of some 34%. The problem right now is that biotech is breaking through major support, indicated in red on the chart. If that support level does not hold (a very likely scenario), then we see the next support level between 200 and 220 points, which would mark a decline of almost 50%. We aren’t there yet, but the chart really looks scary. This not the time to take positions; it is a time to be patient and let the m...
The low price of silver has finally claimed is first victim. Endeavour Silver (EXK) announced that it will cut silver production by 25% in 2016. The company has three mines working in Mexico and will produce 7.2 million oz (Moz) of silver in 2015. However, Endeavour plans to shut down production of one of their mines by the end of 2016 and put it on care and maintenance. According to Endeavour Silver’s press release: Endeavour’s mine plans for 2016 are focused on minimizing all-in sustaining costs and improving after-tax free cash flow rather than metal output. Silver production is expected to be in the range of 4.9-5.3 million oz, gold...
World financial markets appear to be in a panic, partly over events in China, and partly over the plunge in oil prices. I will claim no expertise on the former, although people I respect who do write on China seem to think the country is not facing an economic meltdown. This leaves lower oil prices as the main source of worry. There are some bad stories with lower oil prices. Developing countries that are heavily dependent on oil exports will be badly hit. Also, much of the debt issued by energy companies is likely to go bad. This may have some ripple effects in the financial markets, but is unlikely to set off any general collapses. Also, th...
On Wednesday Jan 27th I wrote an article that gave you a picture perfect trade setup. The trade is on sugar or the SGG sugar ETF. As of this writing sugar is now over 10% in our favor from the original entry and trading at short term support. This is a critical level to lock in partial profits and move your stop in the money for the balance of the trade to be safe. I just want to keep following up with this trade as many followers are in this trade with me. Daily Chart of Sugar As you can see in the chart below sugar price formation has turned bearish. With price breaking through support we have seen a beautiful wave of stops being triggered...