Tuesday and The Doctor Is In
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I also believe the real damage to the oil industry & corporate bond market won’t get really ugly until the 2nd quarter. We’ll see some damage during April/May when Q1 earnings are reported from Jan-March with oil in the 40’s.
Even if oil recovers to the high 50’s/low 60’s by March, the average for Q1 with oil producers and oil service companies won’t look so hot. The market has priced a great deal of this in, but the realization will hit the rest of the market in 2nd quarter.
So you’re not rushing out to buy USO then Shad? 🙂
I have not been, but Oil is due for slight bounce up into Feb. I think if oil gets down to $41-$42 range it should have a few weeks breather into the mid 50’s. So now may be a good time to start accumulating USO.
UWTI brothers UWTI. $200,000 by end of 2016.
Can’t say that I disagree with you there, Shad.
@Shad re USO – looks like a bit of a bounce… or a blip… today..
If the conventional markets have a big crash there is no way IMPO that gold, silver or their miners will avoid also crashing big time.
I really believe that you would see just the opposite happen with the metals and to the miners Bob UK.
I just seen any crash in conventional stocks seeing a dash for cash as those who have bought stocks on leverage sell off anything and everything because of margins calls.
Sorry I did not respond sooner. Really busy around here with the newsletter and other things.
I made my comment because I have found that folks who invest in gold and the gold stocks are a different breed. They are not so tied to the conventional markets.
Bob, I have to agree with Al. Before everything reversed direction in 2008, every asset class had made a new record nominal high while the dollar was at its record low. This time, it is gold that is at record oversold levels while the dollar has spiked and is at a 16 year overbought reading and stocks are again at record nominal highs.
Unlike in 2008, no one has any gold to sell – for margin calls or otherwise.
I keep getting that image of Monty Python’s foot coming down and going “Boom!” on the PMs. (;-)
Maybe, but I don’t see that happening quite yet.
Just comic relief (;-) Silver Gold ratio chart looks very interesting.
Interesting day in conv mkets…
SPY
from +1.2% to about -1% at some point… ? People are definitely nervous.
Richard, you have it right – nervousness definitely confirmed by VXX, UVXY.
I’m looking to get long some volatility options (1mth max in duration) right now – if we could get a tiny bounce, the cheap side of me would be happy. 🙂
I remember an interview w. Ralph Acampora back in Nov/Dec mentioning that if conv mkts don’t break new highs at beginning of year, he’ll start to be worried. Guess it’s good to keep in mind. The man had the early-Oct pullback off by “just” 2 weeks: he called in April for a Sept-end pullback. 🙂
Best to all, GL investing/trading.
LPG – time to put back that Trading cap.
LPG; I’m personally buying volatility every time the markets move up. Based on the VIX and other charts, a major move down is in the offing—-the risk far outweighs the reward. I don’t believe the first part of 2015 will be anything to write home about. Doc.
Hello Richard,
I suspect a bad cold had me “too” sleepy re: conv mkets over the past few days…
Thanks for the wake-up call though.
Best as always,
LPG
You’re welcome—-hope you’re over your cold. When winter starts to settle in, I tend to avoid homo sapien species as much as possible.
Well you know, I can’t really blame the “winter” here:
26 Celsius in the flat right now at night – without heater…
Best,
LPG
So that is why you guys are on the island!
Dos, what do you see for the US dollar? On stockcharts.com the point and figure chart has a target of 118. What do you think?
Dear DOC,
What do you see for the US dollar? On stockcharts.com the point and figure chart has a target of 118. What do you think?
Silverbug; that certainly is not out of the realm of possibilities—-especially since the odds are we won’t see at least a minimum of a bottom for commodities until late March or April.
Good interview, and the volatility index is important to monitor. However, everyone seems to be skittish towards the end of 2014 and for the beginning of 2015, but if there is a barrage of good news, then I still could see the conventional markets popping for a another run before the official bear market begins in the S&P, Russell 2000, and DOW. There is a great deal of international money flowing into the US markets with Japan, Europe, Russia, and emerging markets in a complete mess. This is helping our Treasuries, (check out TLT over last few months), and PMs are getting a small amount of bid just because they’ve been uncorrelated to the dollar, oil, and general markets over the last 2 months. I could see more whipsawing in all markets until late Jan/early Feb, and then a decisive break in one direction for the PMs and the conventional markets. This also may give oil a tiny pop up for a breather into the high 50’s-60 in Feb. It will be interesting to watch