Friday Morning Commentary with Big Al, Cory and Chris Temple
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A meaningful recovery occurred earlier today in the conventional markets. Is this attributable to the employment numbers that came out today?
Quite a divergence in the metals vs. the PM equities yesterday and today. Most equites down yesterday while metals were up, and today, The Boyz could have really slammed the equities down 4-12% with the metals down early on near or about 2% in gold and near 4% in silver.
An interesting article on the general stock market:
http://awealthofcommonsense.com/2016/03/how-much-do-profits-matter-to-stock-market-returns/
I believe the main stream media has major control of public opinion.
Even in the Weimar times the stock market went up.
Saw a comment today where Saudi Arabia supposedly would consider a cut in production if Iran does. How would it be possible that these two, who hate each other, could possibly trust what the other one says they’re going to do??? If these two hold the key to higher prices vis a vis lower production, don’t hold your breath.
Exactly…plus I heard that the Saudi press is reporting that 3-4 year plans for output to increase are still in place, for both the Saudis and UAE. Iran wants to pump more. So does Iraq. A Reuters story today talked about how shale companies in bankruptcy are still pumping full-tilt, as the least bad option (yes, they lose money on each barrel of oil – but they are making it up on volume!) In short, there STILL has not been enough production destroyed; and the Saudis are not going to step up w/o EVERYONE else, if at all.
This, of course, is why crude was down 4% + today, and will probably keep correcting.
Any thoughts on the conventionals today Chris – seems like a bull trap to me? I am not convinced.
Re Saudi and Iran – I can see those two folks turning their proxy war into something more direct this summer.
I meant, how the conventionals closed.
Scratch that – I should have listened to the commentary first 😉
I don’t trust this move either, Bob — and think it’s a bull trap. In part, that’s because there is another wave of bankruptcies coming for energy companies; and I wouldn’t want to be too exposed to stocks generally. It’s a bit of a marvel to me that stocks did as well as they did today, even with oil hammered. That said, the downside potential is probably less severe now if the Fed tilts towards Yellen’s dovishness. We’ll see. Best to stick with safer stuff and carefully-picked value stocks and good stories; not too long the stock market generally.
Thanks Chris.
Did they pump the markets in order to sell to the little guy? Or was the rise simply an indicator that the Fed has the market’s back?
I don’t know the answer to that. But I suspect it is one or the other.
The markets think more the latter. But it still isn’t very strong. Bonds should have sold off but haven’t. Very little participation in the broad market/small caps, etc. We’ll see how “The Fed has your back” attitude works as poor earnings start to come out, and as we see the next wave of energy bankruptcies and lower oil.
I will bear this in mind. Thanks.
Oil haters I bagged 9% on DWTI today. My NUGT is up 3%. Take THAT paper gold haters!
Jason – I’ve had 4 great short trades in a row DWTI and started shorting when oil hit $42.41 and bought more when I saw oil hit a small triple top $42.45, $42.46, and then $42.46. I also had one good paired trade where I rode things down with DWTI, then reversed back up with UWTI, then reversed back down in DWTI.
So 5 good oil trades in a row (4 short, 1 long) and then….. I misfired on Friday when I temporarily sold out of the rest of my very profitable trade in DWTI @ $173.33 and Bought UWTI @ $19.25 because it looked like Oil just put in a bottoming pattern. It didn’t work out so hot for the rest of the day Friday, so I’ll be up early Monday in pre-market to determine if I want to average down, sell to limit a loss, hold, etc….
Good luck next week in your trading you ETF ninja.
At this point I’d take just a bounce big enough to exit the trade, as I am overwhelmingly short on Oil lately, called it in advance, and provided my downside targets and we are nowhere near them yet. I just thought I saw a pattern where the waterfall decline has consolidated and looked like it was going to bounce for a day or so on the lessor charts. We’ll see how things kick off on Monday & Tuesday.
I must admit I was not expecting such a vicious Friday takedown in Precious metals today. I was wrong, but have added some more physical silver to my stack this morning.
(NOT from Northwest territorial mint!)
We mentioned lumber, the other day…….I see Western Products (WEF.TO) is still doing well.