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If Oil Gets Smacked Down, Equities Will Run
- Thread starter ByLoSellHi
- Start date
Quote from ByLoSellHi:
Those long non-oil stocks (I'm talking direct as possible; I'm not even referring to refiners, which will shoot to the moon if oil falters), should be absolutely cheering for a total break down in crude.
At this point, a shoring up of the USD and a collapse in crude oil prices (brent and WTI) will absolutely open the floodgates to new cash into the equity markets.
You're right today
Oil and gold getting killed and stock surging
but oil and gold will keep going higher
The markets might cheer oil going down a couple bucks for a couple days, but over the long term a couple bucks isn't going to help. Even if oil drops 10 bucks i could still see gas prices going up in the long term. The refineries and gas stations are running pretty thin margins right now.
The dollar is going to have to make significant gains for a real correction. That ain't going to happen unless the fed starts raising rates which seems pretty unlikely or maybe the euro community lowers their rates which also seems unlikely.
The dollar is going to have to make significant gains for a real correction. That ain't going to happen unless the fed starts raising rates which seems pretty unlikely or maybe the euro community lowers their rates which also seems unlikely.
Quote from S2007S:
Even though the markets running higher today I added on some new inverse positions.
You mean just like back on April 2nd when you told everyone here on ET that you bought TWM at $76, SKF at $101, EEV at $76, and the DUG at $37?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=123616&perpage=6&highlight=dug&pagenumber=2
Looks like those were ALL total losers with a draw down in the 30% neighborhood.
And now you are adding more???
:eek:
there is just more demand from countries like India and mostly China.
plus you have depleting oil reserves.
less supply and more demand plus stronger currencies...you have perfect storm...and low interest rates.
What is the FED thinking.....
plus you have depleting oil reserves.
less supply and more demand plus stronger currencies...you have perfect storm...and low interest rates.
What is the FED thinking.....
Quote from dandxg:
One of the reason that both oil and the stock market have gone up is a cheap $USD. Thank you Geenspan and Bernake. If you were to take a look at the run up in the stock market in the last few years it has a clear inverse relationship to the greenback. The same for oil and ever other USD denominated commodity which is every one that I am aware of. And no its not the only reason but just one of the them, regarding oil that is.
Stocks surged today?
It looks like stks caved in half of their gains despite a $4 drop in oil and extreme buying in financial stks. We are at an interesting point with oil where demand is way down here but still going strong elsewhere, where etf's and speculators have the advantage. Where governments are delaying taxes and stopping subsidies it's all very interesting indeed. With corporate earnings in the dumps and pre announcement period upcoming oil's retreat to $120 will not change anything in the big picture. I wouldn't make equity decisions off oil now or assume we will rally hard because oil retreats. ~stoney
It looks like stks caved in half of their gains despite a $4 drop in oil and extreme buying in financial stks. We are at an interesting point with oil where demand is way down here but still going strong elsewhere, where etf's and speculators have the advantage. Where governments are delaying taxes and stopping subsidies it's all very interesting indeed. With corporate earnings in the dumps and pre announcement period upcoming oil's retreat to $120 will not change anything in the big picture. I wouldn't make equity decisions off oil now or assume we will rally hard because oil retreats. ~stoney
these funds must be long equities
anyways most traders at elite trader don't give a damn about market opinions or positions from hedge funds or even investors.
i mean if you are daytrading and trading for days, these things or fundamnetals don't matter.
anyways most traders at elite trader don't give a damn about market opinions or positions from hedge funds or even investors.
i mean if you are daytrading and trading for days, these things or fundamnetals don't matter.
Quote from stonedinvestor:
Stocks surged today?
It looks like stks caved in half of their gains despite a $4 drop in oil and extreme buying in financial stks. We are at an interesting point with oil where demand is way down here but still going strong elsewhere, where etf's and speculators have the advantage. Where governments are delaying taxes and stopping subsidies it's all very interesting indeed. With corporate earnings in the dumps and pre announcement period upcoming oil's retreat to $120 will not change anything in the big picture. I wouldn't make equity decisions off oil now or assume we will rally hard because oil retreats. ~stoney
Quote from ByLoSellHi:
The problem, as I see it, is that people buy computers, furniture, automobiles and, especially, houses, every several years or longer.
But gasoline, heating oil, natural gas, flour, vegetables, beef, rice, chicken, consumer staples, and everything else that has surged recently, they buy everyday.
I think you are right about those items that are nonsubstitutable or difficult to stop using. The good part is that the nation had a nice time consuming some of those goods that are priced high now at the low prices in the past from Walmart, Target, and Costco. Prices seem to average out in the long run.
Maybe the reality is that prices were artificially too low before, and recently just spiked up to catch up. Can there be an obesity epidemic if food prices are too low?
What's actually happening is that folks who invest in oil futures do not have take possession of the actual barrels. In the gold market this has always been the stumbling block and why people buy the mining equity because they do not want to store a bunch of gold. Well the Senate is working towards changing the rules so speculators will now have to actually take physical delivery of the oil! This should be great news in the long run for oil companies stocks as they will find new buyers and in the short run Oil will immediately fall to $80. It's a cool idea and i hope it goes through. Lets see these Harvard quants from Goldman actually rolling a few barrels into a warehouse if they REALLY feel so strongly about their " peak " oil scenario... lol. ~ stoney
Now that the stocks and oil are down -40% or more, all analysts are calling for deflation.
Oil $50 and below is probably more bullish for stocks and the economy in general. The more it panic sells lower the better. It is like free money being injected into the economy.
I think this will help stabilize the economy until the next round of unemployment.
Oil $50 and below is probably more bullish for stocks and the economy in general. The more it panic sells lower the better. It is like free money being injected into the economy.
I think this will help stabilize the economy until the next round of unemployment.
Quote from dividend:
Maybe the US could see deflation. That means price of everything on average goes down.
House price down.
Interest on loan down.
Computer price down (8 core CPUs for the price of 1 core)?
LCD price down (two for the price of 1?)
Cell phone price down (unlimited everything for $50? 4 year contracts?)
In a recession consumers have less money. To convince them to buy, producers need to lower prices and try to sell more quantity.
Oil price can go to $200 but who cares. I will just drive (A) slower and (B) less miles.
PS everyone is talking about oil price... It is so bubblicious.