Oil prices

oldman

oldman

Well-known Member
Location
PA
Oil continued its downward trend again yesterday with an intra-day low of $47.55. On this morning's open, it appears that we will see a bit of a climb, but nothing so significant that it will have an effect on gasoline prices going up. In fact, more than likely, we will see a few more cents being shaved from current prices. If Brent drops below $50.00 a barrel, it would be another low for oil and with natural gas prices also below the $3.00 mark, we could see more devaluation to stocks, but that all depends on other issues and not just oil.

My thinking for now is with oil and gas so low, my concern would shift towards employment because of the many jobs that would at least be temporarily lost due to layoffs. Right now, the consumer is the winner here. They now find themselves with additional cash to spend on other things that they have put off buying. The glory days of the consumer may have returned.

Another problem that I see developing is if oil prices are going down and investors are pulling away, where is that money going? Obviously, it is not going into equities or bonds, so I have to assume that many portfolio managers have decided to keep the money on the sidelines and wait it out to see where others put their money. It is all psychological at this point. Such low oil prices have confused the investors and many believe that we could be looking at another decline with deflation a real possibility. What we need now is a 100 point rally. That should ease a lot of minds by reminding us that the market is just doing what it has always done, go up and down.

What I would be interested in is reading anyone's opinion as to where they believe the market is headed. As a former day trader, I still enjoy 'dabbling' in the markets, but only use money that I have made from previous investments. It's not a game, but I know we have others on this forum that do follow the markets, so those that do may have an opinion that strikes a nerve.
 

I don't follow the market, but here's my two cents anyway.... With consumers having more money in their pockets they may be able to spend it on other things that would stimulate the economy and create MORE jobs.. They may make some big purchases that could create more manufacturing. At the very least they will invest in other goods and services. As we pull away from fossil fuel.. (saving the planet would be nice) there of course will be a downturn in that industry. Hopefully to be replaced by renewables and green jobs in that industry. We are still going to need energy.
 
Most of the investment "guru's" are calling for a volatile market in 2015...spurred on by these falling oil prices. Some are even calling for oil to drop as low as $30 a barrel before things begin to stabilize. This uncertainty in the energy sector is taking its toll across the board, and will probably continue to do so until some stability returns. This "Oil Glut" will begin to level out as many of the least productive wells are mothballed, and sources like the Canadian tar sands are put on hold. I am hoping that when it all settles out, we will see oil stabilize around the $70 a barrel range, with pump prices in the $2.75 to $3 a gallon area. This will allow the consumers a bit of extra money, and the oil producers can maintain their operations with a reasonable profit.

At present, I am watching the markets closely, but making no substantial moves in my holdings. With the gains from 2014, there is no need to panic....yet. So long as the markets "yo-yo" within a moderate range, and continue to show an upward trend, over time, that is all that really matters.

Of equal concern, in addition to oil prices, is what direction our new Congress and the Fed decides to take in coming weeks and months. The Fed has an extraordinary influence over the markets, and every time the Fed Chairman speaks the markets seem to go into spasms. Then, if the new Congress and Obama decide to get into Pissing Contests over every measure that comes up, we may see even more gridlock in Washington...if that is possible.

The markets are the Ultimate Casino Game, and there will always be Winners and Losers. The Winners pay attention, and the Losers panic.
 

But, at the end of the day, the fact remains that the markets will go up.Even after corrections or recessions, the markets react the way they are supposed to. I don't think the markets are affected too much by Congress and the President much anymore, compared to years back when they reacted by over-reacting. I tend to think that the "new wave theories" are in play today. I believe that profits and cash drive the markets today. Of course, geopolitical events still have some influence on the markets, but earnings is the name of the game for now. Next week, month or year, who knows?

When I used to day trade, I would invest using a theory called "Stockastics" that was developed by a fellow that later became a big name in hedge funds and commodity futures. I used charts to determine when to buy or sell stocks that I was watching. Like moving averages, etc. For the most part, it worked out, but like any other strategy, it ran its course and then fizzled. Today, to be a day trader, one has to be almost a micro manager with the sectors and the stocks within the sectors. If I get a "tip", I do not jump right in. I watch and still chart, but not moving averages, just prices for short term gains. I used to buy in the a.m. and sell in the p.m. or after hours, depending if I was up. I also short on occasion, but not very often. I did well with Apple when I shorted it a few months back. Apple was at $116 when I shorted it and at $106 when when I bought and replaced the shares, so that was good couple of weeks. It can test one's nerves. Options is one thing that I avoid. Too risky and I need too much cash to play. There's other better ways to make a few bucks than risking the farm.
 
I don't think I could ever "Day Trade"...I'd probably have stomach ulcers within weeks from all the tension involved. Years ago, I read a couple of books..."How to make money in Stocks" by William O'neal, the founder of Investors Business Daily, and "You can Do It" by Jim Stowers, the founder of American Century Investments. The advice contained in those books set me on the right course that seems to be still working today. When I was working, I had American Century as one of my primary accounts, and met Stowers on several occasions....he was a real down to earth and honest person.

Yeah, you're probably right about the government...most investors pretty much assume that anything that comes out of Washington is going to be Worthless, and the Fed is probably the only govt. entity that really matters to the markets. Besides, the markets have become so "Global" that what happens in one nation often has little effect overall. Even the mess in Greece, and some of Europe over the past couple of years hasn't had that much effect on the Big Picture.

I just looked, and the markets are up almost 1% today...a couple of days like this will pretty much recover the losses attributed to the price of oil. Up and Down, Up and Down...it requires some real patience...but so long as the Ups outweigh the Downs, that's all that really matters.
 
They're saying the death of the Saudi King might cause a spike in prices when his replacement takes over oil policy. It's speculation.
 

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