Dropping Oil Prices

Predictions are $50 and level around summer..... but that's speculation. I'm certain there are people that know the exact answer but I'm not a member of that club

So when will it "hit bottom", so we can buy more?

 

 

Trying to call an exact bottom and time is pointless... Its impossible. Bottom line, buy low, sell high... We're getting pretty low here. 58 and change... I think we test 55 (and maybe bust south of it...) but long term the number is 90.

Trying to call an exact bottom and time is pointless... Its impossible. Bottom line, buy low, sell high... We're getting pretty low here. 58 and change... I think we test 55 (and maybe bust south of it...) but long term the number is 90.

 

Is it a stock ticker symbol you are buying or what? Never tested the waters in oil

 

 

Is it a stock ticker symbol you are buying or what? Never tested the waters in oil

 

 

There are lots of ways to play oil. Some have been mentioned already... (and each has its ups and downs) USO, The canadian oil trusts. There are also The drillers. (BP, NOV etc) The refiners (xom, BP etc), the servicers (HAL, slb) etc etc etc...

 

(BTW, I do owe some canadian oil trusts but Im not naming who... Any stock Ive mentioned I dont currently own, but I may or may not buy them in the future)

OK fcuk it... School is in boys and girls.

 

 

What we're looking for is called "capitulation". Its the moment where the most steel nerved investor says "Jesusfuckingchristimfuckinggoingbrokemotherfuckingshitsellallthisshitsoican

affordacardboardboxandalpo"... The market shakes off its pussies and the vultures come in to eat the scraps. Its loud. Its ugly. It hasn't happened yet. Either in oil or in the overall markets... For oil, we're looking for a 5+% drop in one day...Or more precisely a few fcuking hours... 2-3% for the dow... We are starting to see some preludes to it (watch that 10 yr yield, its falling like a fcuking brick, and watch that vix climb through the low 20s), but the selling hasnt reached a fever pitch yet.

 

It often happens on Fridays, because psychologically investors go two ways the following weekend after a big bloodbath like that... They jump out the fcuking window and splatter on the concrete below, or they realize "wait a minute... This is a fcuking opportunity of a lifetime." Either way, the people who panicked on friday, dont come back monday morning. It may happen this afternoon... May not... We've got holidays coming up which are typically feeding frenzies for the shorts... low volume, nobody at the wheel, the mice come out to play... So they may be greedy enough to try to hang in there a few more weeks (even though, theyve made a fcuking fortune shorting oil and will look for any reason to cover).

Oil now at 57 and change.. 10 yr at 2.09 and falling. Vix at 20.37 Dow down 207.

Good lesson RD... and your right, it's these times the big players get bigger and the weak die

RD,

 

Makes sense.. The Vix gets stupid in times like this.

 

Time to buy something that will go up long term.

 

Thanks.

And to Chad..... watch out for the small players...their stocks may seem low and tempting based on a 2 or 5 year stock value... but they may have not faced a cycle like this and they may get shat out of the industry.... if they don't have a couple billion put aside for just these times they will probably belly up or have to dump assets to keep their office lights on.

I just spoke to a friend in OK and it sounds like people are starting to panic out there... banks have gone in and are taking over drillers and BIG layoffs coming for the big boys in the industry.

Wow... The selling really accelerated there at the market close...

Expect a Fed save for monday! Or we have a black monday just in time for the holidays

Expect a Fed save for monday! Or we have a black monday just in time for the holidays

 

 

Look at the treasuries.... The yields are dropping like rocks.... That means one thing... Money is pouring out of oil... Pouring out of equities, and into bonds.... That means the big money doesn't think the fed will crank up rates any time soon... fcuk... The thirty year is at 2.75. The 10 year was over three earlier this year... Now it's 2.0x.

 

There is now talk of oil going to 30 (which seems absurd to me, but wtf do I know?) and the ten year going to 1%.

I popped to the supermarket on the way home, no shift in the price of olive oil.

Something amiss and someone is making a killing.

 

I feel I am missing out

RD..... Hasn't the US treasury been using Oil reserves to print more money since the gold reserves are not covering the cash being produced? If so a $30 barrel would drop the GDP by a margin. US is already at an 85% debt to GDP ratio...which not terrible is getting up there. In personal terms a bank wouldn't even spit on you with an 85% debt to income ratio.

Very Very true, scared money always does that. 50/50 chance come monday for either bloodbath or stick save. I am still long my vxx up 21% now Tvix is to damn scarey for me.

Side note, look at slv and gld, barely moving, but look at kol and it has the same ugly look as oil. Weird stuff

 

Look at the treasuries.... The yields are dropping like rocks.... That means one thing... Money is pouring out of oil... Pouring out of equities, and into bonds.... That means the big money doesn't think the fed will crank up rates any time soon... fcuk... The thirty year is at 2.75. The 10 year was over three earlier this year... Now it's 2.0x.

 

There is now talk of oil going to 30 (which seems absurd to me, but wtf do I know?) and the ten year going to 1%.

RD..... Hasn't the US treasury been using Oil reserves to print more money since the gold reserves are not covering the cash being produced? If so a $30 barrel would drop the GDP by a margin. US is already at an 85% debt to GDP ratio...which not terrible is getting up there. In personal terms a bank wouldn't even spit on you with an 85% debt to income ratio.

 

 

Thats not accurate. Oil production as a % of GDP is like 1%. The U.S. dollar hasnt been tied to any other commodity since about 1971 when we abandoned the gold standard.

 

The dollar is sometimes called the "Petrodollar" which is what I think you're getting at, but that's because OPEC agreed to market oil internationally in U.S. dollars. Thus to buy oil, you need greenbacks (although that rule has loosened significantly) thus necessitating huge amounts of dollars held by foreign sovereigns, and not actually in circulation in the U.S. thus lowering the domestic inflation typically caused by the printing of Fiat currency. Technically you're right that now a lot of countries are going to be sitting on dollars they dont need to spend, but there are a million other reasons they dont mind that, namely because its still one of the most trusted currencies there is. If anything, this drop in oil has the net effect of strengthening the dollar, which makes others love it even more.

Thanks RD..... when you look at it from different directions makes more sense. I know the Saudi's were talking about pricing oil in a "new" currency... not sure what currency they were thinking... also these could just be bluffs

I misjudged a couple bottoms on some oil related stocks I purchased recently. So I'm not very happy right now, lol.

Relax....

 

(Not sure if you were around for when I called oil the last time it did this? For the sake of credibility, here was my call on August 15, 2008... Oil was at $114/bbl. read the thread... It's awesome... Every prediction I made it came true.... And every prediction I made continues to be true five years later... http://www.lambopower.com/forum/index.php?...st&p=494146 )

 

 

The Saudis do this once every five years like clockwork....OPEC is no longer able to really control the price of oil on the embargo side... Too many wells in non member countries.... What they can do is control the price to the downside by pumping. North American shale oil is not cost effective below $75 a barrel or so (although, like anything else, that number comes down over time). Ok... Well we've got a shitload of oil. Turns out we've got more than they do... But there's is cheap to get out of the ground and cheap to refine.... So they have some room to cut their profits and still be ok.... While they take a bite out of our ass... Bottom line though is, they are addicted to that fcuking cash... So this is temporary... Shit is getting pretty cheap here (and it's at an amount that hurts them too at this point...).

 

China hasn't gone belly up... And they haven't sworn off oil... Nothing fundamentally has changed... It's a bear raid... And there is a bottom....

 

Bottom line, the cheap energy is good for the economy.... Enjoy it while it lasts.... A year from now we'll be bitching about the good old days when gas was under three bucks a gallon...

 

Was sent a link by a friend earlier to another forum and wouldn't you know it, apparently someone enjoys RD's posts. This other forum is pretty obscure from the car community so it was kind of surprising considering this wasn't what I was sent to check out.

 

Anyone like COP at around $60?

 

I've been looking into IEP as it has dropped a lot lately because of its oil and gas ties but it still has a huge diverse portfolio., thoughts?

Was sent a link by a friend earlier to another forum and wouldn't you know it, apparently someone enjoys RD's posts. This other forum is pretty obscure from the car community so it was kind of surprising considering this wasn't what I was sent to check out.

 

 

So that guy shamelessly plagiarized RD's post??

Was sent a link by a friend earlier to another forum and wouldn't you know it, apparently someone enjoys RD's posts. This other forum is pretty obscure from the car community so it was kind of surprising considering this wasn't what I was sent to check out.

 

 

 

The fcuk??? Not sure if I should be flattered or pissed off....

OK fcuk it... School is in boys and girls.

 

It often happens on Fridays, because psychologically investors go two ways the following weekend after a big bloodbath like that...

 

Yes, however it usually happens to be the third Friday of the end of each quarter (triple witching).

 

Which by the way is this coming Friday, December 19.

 

It ain't over yet guys.

The fcuk??? Not sure if I should be flattered or pissed off....

 

Just think of the look on the guys face when he comes back here and sees this.