Thursday, January 22, 2015

If oil drops below $30 a barrel, brace for a global recession

If oil drops below $30 a barrel, brace for a global recession



Here is a very good article discussing the current oil price along with thoughts about what might happen in the future.  One OPEC minister felt that the $46 oil price we have now is the approximate bottom, and oil will rebound in the future.  Others warned that if oil drops to the $30 range, we will have a global recession.  Over 80% believe that the price of oil will go higher although only 42% expect the price of oil to be in the $60-$80 range by the end of 2015.



Since no one can guess the exact bottom, I believe we are close enough to load up on some oil stocks.  I have bought Vantage Drilling (VTG) and Rex Energy (REXX).  I will also be closely monitoring these stocks and the price of oil in order to buy more shares in the future.  We are living in interesting times, and I am willing to hang on for a while because I believe select oil company bargains will outperform the market in the next year.





   

Wednesday, January 21, 2015

10 oil stocks that may eventually stage the biggest rebound - MarketWatch

10 oil stocks that may eventually stage the biggest rebound - MarketWatch



This is a link to an outstanding article about 10 oil stocks that are great bargains for the eventual oil rebound.  Rex Energy (REXX) is one stock that I am familiar with, and I will probably buy a position in REXX tomorrow.  I may be a little too soon, but I am expecting more than 100% in return during the next two years.  I will probably take a second position when I think we are close to the bottom in the price of oil.  Rebound stocks can be top gainers in a late bull market like I believe we are experiencing.


Tuesday, January 20, 2015

Warning Signs

Warning Signs



This is a very good article about why stocks are on shaky ground now.  You may have noticed that the Dow has struggled three times recently around the 18,000 mark.  This triple top formation is bearish although I think the market will eventually go higher.  I have been making money buying UDOW at low points and selling at high points.



The author in this article brought up similar points about the S&P 500.  Then, he showed an outstanding chart of $VIX, the volatility index, where it looks like smooth sailing times have ended, and volatility will reign again in the stock market.  He mentioned that this chart reversal has only occurred at stock market tops.  The author also gave other reasons why we need to be ready to cash out of stocks if conditions get worse.

Sunday, January 18, 2015

Baker Hughes | BakerHughes.com

Baker Hughes | BakerHughes.com



Here is a link to Baker Hughes website so that you can stay in touch with what is happening in the world of oil drilling.  Just scroll down the main page to get a link for the latest monthly oil rig count.  As I mentioned in my previous blog, I believe along with Boone Pickens that low oil rig counts equal bottoms in the price of oil.  So, we need to stay up with the latest rig count news from Baker Hughes in order to invest in oil companies and ETFs at the right time to make money.

Billionaire Oilman Gives a Clue on When Oil Prices Will Bottom

Billionaire Oilman Gives a Clue on When Oil Prices Will Bottom



This is an outstanding article where Boone Pickens gives us an idea about when the price of oil will bottom.  The article also included a chart comparing oil prices to rig counts.  Pickens believes the bottom will occur when 500-600 rigs have been idled, and we are about one third there now.  Baker Hughes would be a good company to follow for knowing where we are in rig counts.  I plan to be watching the bottom myself because 50-100% returns could happen through buying into the right oil stocks at the right time.

Thursday, January 15, 2015

The Bond Market is Warning of Huge Trouble Ahead

The Bond Market is Warning of Huge Trouble Ahead



Here is an interesting article about the bond market presenting a scary picture of where the economy is heading.  This is in great contrast to the numbers and predictions of the Federal Reserve concerning the economy.  Who is right?



The only winners in the current situation are those who can trade in and out based on the stock market volatility.  We have been down five days in a row for the market, and the odds are almost certain for a three or four day rebound.  I bought UDOW near the low, and I plan to sell it whenever the rebound occurs.  This pattern may also occur many times in 2015 if the bond market is right.



 

Wednesday, January 14, 2015

UDOW Is The Trade Of 2015

We have experienced high volatility in the stock market for the last several months, and I firmly believe this scenario will continue until the price of oil stabilizes.  2015 shows expectations of low oil prices all year long.  This will translate into market uncertainty even if the rest of the world is calm.

During the past four months, I have made money on UDOW three times, and I expect this trend to continue.  We are having extreme volatility on a daily basis and a weekly basis.  UDOW can easily move more than $5 per share in a day's time, and I only need a movement of $10 per share to make the trade worthwhile for me.

My last trade on UDOW was completed in a week's time, and I have a buy order for UDOW again for $131.62 good until canceled.  Then, after I get the shares, I plan to enter a sell order good until canceled for $142.62 for a profit of $11 per share.  Volatility is the trader's dream.  When this trading range quits working, I will find the next range as long as the basic trend of the stock market is up.  Only a bear market or low volatility will cause this trade to fail, and I don't see that happening anytime soon.  So, 2015 is the year for UDOW.