Thursday, September 3, 2015

How to Beat This Market’s “Three Cs” of Risk

How to Beat This Market’s “Three Cs” of Risk



This is an outstanding article by Tom Gentile about why the stock market is so volatile now.  China is one reason for market instability because their country is going through their "irrational exuberance" period like we did in 2000 during the dot.com bust.  All stock market tops will eventually decline.



Low commodity prices are a second reason for volatility.  Copper and oil are used for economic expansions, and we have low demand for these commodities now.  We must adjust to a slowing world economy.  A third reason for market problems is that currencies are being devalued.  So, we need to be looking at the NYSE McClellan Oscillator ($NYMO) to note when it is best to be short or long.  Short the market when $NYMO is positive and go long when $NYMO is -80 or worse.  Then, sell as soon as you have made a profit because it won't last.

  

Wednesday, September 2, 2015

Hold Me Tight? Natural Gas Supply/Demand Balance Keeps Prices in a Tight Range | RBN Energy

Hold Me Tight? Natural Gas Supply/Demand Balance Keeps Prices in a Tight Range | RBN Energy



Here is an excellent article on the state of natural gas.  The supply-demand equation has remained balanced, and that is why natural gas futures stocks like UGAZ and UNG have gone nowhere this summer and are currently going down.  We are actually using more natural gas than 2014 due to electrical power plants consuming more natural gas.  The transition from coal to nat-gas is for real.    



The RBN Energy website contains other interesting articles about oil and natural gas also.  Articles are on the website for the Henry Hub, the Rockies Express Pipeline (REX), LNG exports, and natural gas going to Mexico as well as many other articles.   RBN should be one of your favorite bookmarks for the energy sector.



  

Four Stocks Insiders Bought During Last Week’s Market Tumult - TheStreet

Four Stocks Insiders Bought During Last Week’s Market Tumult - TheStreet



This is a great article on stocks that insiders are buying now.  I especially like Sun Edison (SUNE), and I am planning to buy shares this morning.  Solar stocks are bound to rise again because solar is the wave of the future, and they are getting closer to being competitive with oil and natural gas.  I also like SEDJ, and I own it.


Tuesday, September 1, 2015

3 reasons this stock sell-off could keep going

3 reasons this stock sell-off could keep going



This is a very important article on why stocks may keep falling.  Even worse, while we may not enter a recession, it may take two to six months to recover from the current damage according to Ari Wald of Oppenheimer.  Bear markets can also occur without a recession, and the recovery will take even longer if stocks fall by more than 20%. 



So, a person could possibly short the rallies and make money since we will probably fall back yet again.  SQQQ is a leveraged short of the Nasdaq that I might try whenever $NYMO becomes positive again.  I will need to take my profit whenever $NYMO hits -90 down, though, because the oversold conditions will trigger another rally even if it fizzles out.


Saudi Arabia refuses to bow to pressure to cut oil production

Saudi Arabia refuses to bow to pressure to cut oil production



Here is a very good article about why we cannot be overly optimistic about a turn-around in oil prices.  Nobody knows for sure what the Saudis will do.  When some OPEC members talk about $80 per barrel being a fair price for oil, this does not mean Saudi Arabia will accommodate by reducing production.



So, we don't really have a long trade in oil yet, and it might not happen until next year.  As the article mentioned, the Saudis are really hurting themselves as much as others by reduced income from oil.  They would be better off just giving up some of their business at a higher oil price.  In the meantime, whenever oil dips below $40 per barrel, there might be an optimistic bounce from that level to $48, and a nimble trader might get a quick 20% profit if he acts fast.

Stocks are sending a recession warning

Stocks are sending a recession warning



This is an excellent article about why the stock market decline could get a lot worse.  We faced a similar situation in August-September of 2011 although it later turned positive because Congress raised the debt ceiling and the Federal Reserve helped out.  This time may be different if we don't get the help we need.



Another reason that this time may be different is that we are coming off the top of a multi-year bull market whereas we were still rising from the bottom of a bear market back in 2011.  Also, China cannot help us now either.  The commodities boom of past years is over.  Oil and natural gas might rise some, but copper, gold, and steel will probably remain depressed.  Cash is king again, and profits in stocks should be taken quickly before they evaporate.


Monday, August 31, 2015

Oil ETFs Rally into Bull Market on Supply Concerns | ETF Trends

Oil ETFs Rally into Bull Market on Supply Concerns | ETF Trends



Here is an outstanding article which explains the recent rally in oil stocks.  OPEC has finally come to its senses and thinks $80 per barrel is a reasonable oil price.  Therefore, they will be cutting production to raise the price of oil.  Moreover, the U.S. oil production has finally started to decline which will help prices also.  I am buying UWTI, a triple long oil ETF, tomorrow morning.  Oil will probably continue to rise while the rest of the stock market languishes.