Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Sitio-Royalties-To-Merge-With-Brigham-Minerals-In-48-Billion-Deal.html

Sitio Royalties To Merge With Brigham Minerals In $4.8 Billion Deal

By Alex Kimani - Sep 06, 2022, 1:30 PM CDT

Oil and gas mineral and royalty company Sitio Royalties Corp. (NYSE: STR) is headed for a merger with Brigham Minerals (NYSE: MNRL) in an all-stock deal with an aggregate enterprise value of ~$4.8B thus creating one of the largest publicly traded mineral and royalty companies in the United States.

The deal, expected to be announced on Tuesday, is one of the largest tie-ups in the U.S. oil patch this year, and comes in a period of elevated oil prices.

Like the rest of the industry, Sitio and Brigham have seen both their top-and bottom-lines expand at a brisk clip on the back of rising oil prices. Combining the two companies will allow the new entity to achieve significant economies of scale and become a leader in the minerals-rights industry.

The merger will create a company with complimentary high quality assets in the Permian Basin and other oil-focused regions. The combined company will have nearly 260K net royalty acres, 50.3 net line-of-sight wells operated by a well-capitalized, diverse set of E&P companies and pro forma Q2 net production of 32.8K boe/day. 

The deal is also expected to bring in $15 million in annual operational cash cost synergies. 

Sitio and Brigham shareholders will receive 54% and 46% of the combined company, respectively, on a fully diluted basis.Sitio Royalties recently reported Q2 net income of $72M on revenues of $88M.

Mineral owners receive a 12.5% to 20% cut of the oil and gas pumped on their land in the form of royalty payments. They don’t control the pace of development, but also aren’t on the hook for drilling or overhead costs, either, meaning they directly reap the benefits of high commodity prices.

Both STR and MNRL stocks are down slightly in early trading on Tuesday morning.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• The World’s Energy Problem Is Far Worse Than We’re Being Told
• Belgian Energy Minister: Europe Faces Tough Winter Without Gas Price Cuts
• Renewables Are Losing Steam As Bottlenecks Emerge

[Tom Nolan + 2,443]

Biden's Ambitious Emissions-Reduction Goals To Be Accelerated By Executive Orders

by Tyler Durden

Tuesday, Sep 06, 2022 - 04:20 PM

President Biden's ambitious emissions-reduction goals that encourage investment in green energy to drive the country away from fossil fuels will be conducted in a series of executive actions, according to Houston Chronicle. This comes weeks after Congress approved $370 billion in clean energy funding that will pave the way for the US to slash emissions by half in eight years. 

Over the next year, the Biden administration will announce a series of federal policies to accelerate emission reductions for power plants and vehicles, the two most significant drivers of oil and natural gas demand. 

"These administrative actions are absolutely essential for the US to get to the science-based target of a 50% reduction by 2030," said Matthew Davis, legislative director at the League of Conservation Voters. "They're separate from the Inflation Reduction Act, but they're also amplifying it," he said.

Treasury Secretary Janet Yellen is expected to say in a speech in Detroit on Thursday that Biden's emissions-reduction goals following recent climate legislation "will put us well on our way toward a future where we depend on the wind, sun, and other clean sources for our energy ... and rid ourselves from our current dependence on fossil fuels and the whims of autocrats like Putin." 

Yellen's speech represents the clear objective of the administration: to rid the US of fossil fuels. Executive orders are the only way to accelerate a rapid expansion of electric vehicle sales and clean energy on the grid. 

Oil and gas industry lobbyists sound the alarm over the administration's quick transition to a green new world that will drive US energy prices through the roof. 

"Policymakers must know that a swift transition comes at a cost to the American consumer," said Frank Macchiarola, senior vice president of policy at the American Petroleum Institute. "The burden falls upon them to put in place a regulatory structure that provides for stable energy markets," he said. 

Under the guise of extreme weather, such as heatwaves and droughts, President Biden has called for an expedited shift towards a green power grid: 

"As President, I have a responsibility to act with urgency and resolve when our nation faces clear and present danger," Biden said. "And that's what climate change is about. It is literally, not figuratively, a clear and present danger."

Despite Biden's attempt to lower gas prices at the pump ahead of the midterm elections in November -- the administration is still doing everything to crush the fossil fuel industry. 

For example, EPA Administrator Michael Reagan has moved quickly to introduce a new rule, with a first draft expected in the spring of 2023, that would require limiting power plants' carbon emissions -- making it very expensive for coal and natural gas-fired generators to operate. 

"The regulations they would be pursuing would make it even less economical for utilities to open new fossil fuel power plants," Davis said.

Such a new rule could create challenges for 37% of the nation's power grid that relies on natural gas generation. 

More unreliable electricity from wind and solar while decommissioning natural gas and other fossil fuel plants is a horrible idea. Just look at the California's grid as progressives have tried to greenify it, though during heatwaves, request all customers not to charge their electric vehicles. 

Since renewables are not living up to the promises pitched by the administration, perhaps the only energy source of low-carbon, scalable, reliable, and affordable electricity is nuclear. If California wants to ban all new gas-powered vehicle sales by 2035, it will need a reliable grid to handle the millions of new EVs. 

Every American should be concerned if the Biden administration succeeds in implementing a slew of executive orders to transform grids across the country to look like California. 

Remember, Californians are dealing with threats of blackouts, can't charge EVs during high-demand days, and paying some of the most expensive power prices in years. 

Maybe the green future is not as much about saving the planet but instead about money and politics. 

[Tom Nolan + 2,443]

 

[Tom Nolan + 2,443]

5 STARS ARTICLE *****

The Petro Dollar | Oil-Gas Prices | Currency Dominance | Stock Market | Future Trends...

Natural Gas Price Drives Crude-SPY Trends When USD Is Appreciating

By:Chris Vermeulen

Published: Sep 8, 2022, 15:36 CDT•4min read

https://www.fxempire.com/forecasts/article/natural-gas-price-drives-crude-spy-trends-when-usd-is-appreciating-1121450

When the US Dollar is appreciating in value and trending upward, Natural Gas price trends upward as well to put moderately extreme pressures on the SPY & Crude Oil.

 

As most energy transactions are conducted in US Dollars, this makes sense. Yet, with the recent agreement signed by Russia & China to conduct future energy transactions in Rubles & Yuan, will it result in more muted price trends in the future?

 

When the US Dollar rises, Natural Gas bullish price spikes seem to inflict greater disruption events in Crude Oil and the SPY. It appears that when Natural Gas spikes excessively, global nations are trapped in a US Dollar based economic crisis to supply electricity, heat, and other economic essentials to their communities.

US Dollar Strength May Disrupt Energy & Currency Valuations As Recession Looms

This disruption in economic stability translates into greater risks for consumers, manufacturers, governments, and others. The shock of rising Natural Gas prices while the US Dollar is strengthening presents a real problem for many foreign nations dependent on importing energy.

This is likely why the recent Natural Gas price spikes have helped drive the SPY lower over the past 6+ months. The concern that rising energy costs could work to break economic function in certain nations becomes very real when Natural Gas moves to $3.50. It becomes even more critical when Natural Gas rises above $6~7.

 

My research suggests energy will continue to play a significant role in driving future trends in the global markets that conduct business transactions in various currency forms. It will simply push buyers & sellers to hedge foreign currency risks related to US Dollar strength or weakness. In short, the energy transactions will still be executed in a US Dollar base valuation – although they will be executed in foreign currency denominations.

Will Ruble & Yuan Strengthen After the Deal?

There is one aspect of the deal between Russia & China that we’ll have to watch over the next 10+ years. Will this deal strengthen the Ruble & Yuan, or will it isolate these currencies and work to peg the Ruble/Yuan toward similar valuation levels? In a way, this is a bold move by Russia & China attempting to move their currencies into position to battle the US Dollar. But at the same time, if it fails to support the Ruble & Yuan, then it may work to devalue them in tandem.

The currency alliance between Russia & China may act as an anchor between the two currencies where any future broad global trends may drive both the Ruble & Yuan in a similar direction. The result could be an Oil/Energy based Ruble/Yuan correlation to the US Dollar or British Pound.

 

Long Term Forecast

If Natural Gas begins to slide downward over the next 6+ months and breaks below $5.50, then I believe we may see a resurgent upswing in US stocks and other assets. Until then, I think the continued economic and global energy crisis will hang over the US markets headed into Winter 2022.

There is a chance that US markets may start a Christmas Rally over the next 30+ days and attempt to move into some type of end-of-year rally phase. But the global risks related to energy prices, inflation, and the US Fed may continue to disrupt rally attempts closing out Q4:2022. In short, we may not see any real relief from energy/inflation pressures until Q1 or Q2 2023.

Don’t try to be a hero with these market trends. Learn to protect your assets and target your trading style toward the best opportunities for profits.

On another note, if you are holding stocks and bonds in your portfolio, I highly advise you to watch this video I did with Craig. Bonds could fall another 20-30% from here and will send most baby boomers back to work, killing their retirement plans if you are not proactive.

Learn From Our Team of Seasoned Traders

In today’s market environment, it’s imperative to assess our trading plans, portfolio holdings, and cash reserves. As professional technical traders, we always follow the price. At first glance, this seems very straightforward and simple. But emotions can interfere with a trader’s success when they buck the trend (price). Remember, our ego aside, protecting our hard-earned capital is essential to our survival and success.

Successfully managing our drawdowns ensures our trading success. The larger the loss, the more difficult it will be to make up. Consider the following:

• A loss of 10% requires an 11% gain to recover.
• A 50% loss requires a 100% gain to recover.
• A 60% loss requires an even more daunting 150% gain to simply break even.

Recovery time also varies significantly depending upon the magnitude of the drawdown:

• A 10% drawdown can typically be recovered in weeks to a few months.
• A 50% drawdown may take many years to recover.

Depending on a trader’s age, they may not have the time to wait nor the patience for a market recovery. Successful traders know it’s critical to keep drawdowns with reason, as most have learned this principle the hard way.

We invite you to join our group of active traders who invest conservatively together. They learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition. Click on the following link to learn how: www.TheTechnicalTraders.com.

Chris Vermeulen
Founder & Chief Market Strategist

[PaulLind 0]

I miss socializing with new people and having varied conversations, but I'm confident that this too will pass eventually. We have technologies that we may employ in the meantime so that we can enjoy life. Do you occasionally gamble as well? These kinds of schemes can cause real addiction. At first, you make a little money, and as time goes on, you invest more and more in new jokaroom site. The truth is that none of these strategies will ever make you wealthy.

Edited September 21, 2022 by PaulLind

[Boat + 1,323]

On 9/7/2022 at 8:00 AM, Tom Nolan said:

https://oilprice.com/Latest-Energy-News/World-News/Sitio-Royalties-To-Merge-With-Brigham-Minerals-In-48-Billion-Deal.html

Sitio Royalties To Merge With Brigham Minerals In $4.8 Billion Deal

By Alex Kimani - Sep 06, 2022, 1:30 PM CDT

Oil and gas mineral and royalty company Sitio Royalties Corp. (NYSE: STR) is headed for a merger with Brigham Minerals (NYSE: MNRL) in an all-stock deal with an aggregate enterprise value of ~$4.8B thus creating one of the largest publicly traded mineral and royalty companies in the United States.

The deal, expected to be announced on Tuesday, is one of the largest tie-ups in the U.S. oil patch this year, and comes in a period of elevated oil prices.

Like the rest of the industry, Sitio and Brigham have seen both their top-and bottom-lines expand at a brisk clip on the back of rising oil prices. Combining the two companies will allow the new entity to achieve significant economies of scale and become a leader in the minerals-rights industry.

The merger will create a company with complimentary high quality assets in the Permian Basin and other oil-focused regions. The combined company will have nearly 260K net royalty acres, 50.3 net line-of-sight wells operated by a well-capitalized, diverse set of E&P companies and pro forma Q2 net production of 32.8K boe/day. 

The deal is also expected to bring in $15 million in annual operational cash cost synergies. 

Sitio and Brigham shareholders will receive 54% and 46% of the combined company, respectively, on a fully diluted basis.Sitio Royalties recently reported Q2 net income of $72M on revenues of $88M.

Mineral owners receive a 12.5% to 20% cut of the oil and gas pumped on their land in the form of royalty payments. They don’t control the pace of development, but also aren’t on the hook for drilling or overhead costs, either, meaning they directly reap the benefits of high commodity prices.

Both STR and MNRL stocks are down slightly in early trading on Tuesday morning.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• The World’s Energy Problem Is Far Worse Than We’re Being Told
• Belgian Energy Minister: Europe Faces Tough Winter Without Gas Price Cuts
• Renewables Are Losing Steam As Bottlenecks Emerge

A great Permian play, no government land involved?

[Tom Nolan + 2,443]

https://www.zerohedge.com/commodities/dysfunctional-futures-market-may-spark-next-eu-energy-crisis-liqudity-crunch-looms

"Dysfunctional Futures Market" May Spark Next EU Energy Crisis As Liqudity Crunch Looms

by Tyler Durden

Thursday, Sep 22, 2022 - 05:55 AM

Europe's energy sector is facing a perfect storm as a dysfunctional futures market may lead to a new crisis where prices move higher due to a liquidity crunch, according to Reuters. 

Sharp market swings in natural gas and electricity prices since Russia's invasion of Ukraine have left some oil and gas companies without the necessary funds to hedge their physical trades if they cannot satisfy margin calls, an exchange requirement for extra collateral to guarantee trading positions when prices rise...

"We have a dysfunctional futures market, which then creates problems for the physical market and leads to higher prices, higher inflation," a senior trading source told Reuters.

In March, the lack of liquidity became apparent when trading firms, utilities, oil majors, and bankers sent a letter to governments and financial institutions such as European Central Bank for emergency liquidity to shore up energy markets as prices surged. 

A flurry of traders who hedged their physical positions with short financial exposure in derivative markets were squeezed by soaring spot prices due to the invasion and forced to cover as increased exchange requirements forced margin calls.

Market players typically borrow to build short positions in the futures market, with 85-90% coming from banks. Some 10-15% of the value of the short, known as minimum margin, is covered by the traders' own funds and deposited with a broker's account.

But if funds in the account fall below the minimum margin requirement, in this case 10-15%, it triggers a 'margin call.' --Reuters

Today's challenging situation ahead of winter is that increased margin requirements to secure trades are sucking up capital at NatGas majors, trading firms, and power utilities. 

Some firms and trading desks have called it quits due to high margin requirements, which has led to a decline in market participants -- ultimately causing liquidity to shrink, allowing for even more volatility that could send prices higher. 

Senior bankers and traders said exchanges, clearing houses, and brokers had increased initial margin requirements to 100%-150% of contract value from 10-15%. For Example, the ICE exchange demands margin rates of up to 79% on Dutch TTF gas futures. 

The letter sent by the European Federation of Energy Traders in March said, "the same company which normally expects to experience daily margin cash flows related to price movements of around 50 million euro, now faces variation margin requirements of up to 500 million euro within a business day." 

As we detailed earlier this month, many companies are finding it increasingly challenging to manage margin calls. 

Norwegian state-owned firm Equinor, Europe's top gas trader, recently warned that energy companies, excluding in Britain, need at least 1.5 trillion euros to cover margin calls. 

One European Central Bank policymaker disputed that figure and said losses are much less in the worst-case scenario. 

Last week, Saad Rahim, chief economist at Trafigura, pointed out one warning sign due to the lack of liquidity in commodity markets: 

"Open interest and volumes have come down significantly as a result of what is happening on the margining ... will ultimately have an impact on the physical volumes that are being traded because physical traders need to hedge." 

European officials have even discussed plans to suspend power derivative markets as a form of intervention to prevent what some believe could trigger the next 'Lehman Style' meltdown. 

Helge Haugane, Equinor's senior vice president for gas and power, recently said in an interview that "liquidity support is going to be needed." 

So far, countries like Germany have nationalized failed utilities such as Uniper SE. The question becomes how big the crisis is and if the ECB will need to get involved this winter if prices soar higher due to a lack of liquid markets, triggering even more margin calls. Europe appears to be locked in a death loop. 

[Tom Nolan + 2,443]

https://www.fxempire.com/forecasts/article/the-worst-case-scenario-for-retired-or-nearly-retired-investors-who-are-55-1135896

The Worst Case Scenario for Retired or Nearly Retired Investors Who Are 55+

By:Chris Vermeulen

Published: Sep 22, 2022, 07:12 CDT•10min read

In short, the world and even more so, the financial markets and assets have a habit of applying the maximum pain to investors before reversing direction.

I just did some research and wrote about it. I should be clear that you may find this article a little unsettling if you are nearing retirement or have already retired. On the other hand, it’s an eye-opener because the financial markets and different asset prices paint an interesting picture.

But, I believe being armed with the proper information and knowledge leads to better outcomes, so I’m sharing this possible scenario that could unfold in the next 3-10 months and last for many years and directly affect our lifestyle.

If you don’t take proper action, you could be exposed to and experience something called the sequence of returns risk, which I will explain in great detail in my soon-to-publish white paper. So, let’s jump into things!

There is a concept that the US Fed may be pushed into raising rates above nominal inflation rates to stall inflationary trends. Historically, the US Federal Reserve had raised rates aggressively to near or above annual inflation rates before the US economy moved away from inflation trends.

The Potential Scenario As Told By The Charts and History

Suppose US Inflation trends continue to stay elevated throughout the end of 2022 and into early 2023. In that case, the US Fed may continue to raise Fed Funds Rates (FFR) to unimaginable levels more quickly than many traders/investors consider possible. Could you imagine an FFR rate above 6.5%? How about 8.5%?

What would that do to the Mortgage/Housing market? How would consumers react to credit card interest rates above 24% and mortgages above 10%? Do you think this could happen before inflation trends break downward?

The reality is that the markets and future have a way of surprising us and doing what we once thought was not possible. So being open to some of these extreme measures and situations is something we should consider and consider what they could do to our businesses, lifestyles, and retirement.

Historically, this must happen for the US Fed to break the persistent inflationary trends in the US – take a look at this chart.

 

The best-case scenario given the historical example is that Annual Inflation trends move aggressively to the downside by Q1:2023 or earlier. That will allow the US Fed to move away from more aggressive rate increases, which could significantly disrupt US & Global asset markets (pretty much everything).

Suppose Annual Inflation stays above 6~7% throughout the end of 2022 and into early 2023. In that case, I believe it is very likely the US Federal Reserve will be pushed to continue raising rates until a definite downward trend is established in inflation.

Algos, Illiquidity, Derivatives Are Active Culprits

There are two examples showing the US Fed acted ahead of a major downturn in inflation: one in the late 1980s and another in late 2007. Both instances were unique in the sense that the late 1980s presented similar sets of circumstances. Computerized trading, illiquidity, and excessive Derivatives exposure prompted the 1987 Black Monday crash and the 2007-08 Global Financial Crisis.

Current Stage 3 Topping Pattern May Turn Into Stage 4 Decline

My research suggests the US markets are fragile given the current Inflationary trends and pending Federal Reserve rate increases. As I told above, the best-case example is to see Inflation levels dramatically decline before the end of Q1:2023. It is almost essential that current inflation levels drop back to 2~3% very quickly if we are going to see any measurable slowdown in Fed rate increases.

Secondly, the continued speculation by traders/investors remains very high, in my opinion. Given the historical example, traders should be pulling capital away from risks very quickly and attempting to wait out any potential Fed rate decisions. Below, I’ve highlighted where I believe we are on the Stock Market Stages chart. This is not the time to become overly aggressive with your retirement account/nest egg.

Many traders and investors are now buying this pullback in stocks, thinking it’s a buy-the-dip type of play. I think things are about to get ugly, and what we have seen thus far in 2022 is just the 12-year bull market ending, but the downtrend has not even started yet.

The time to buy the hottest sectors, like in 2020, will eventually come, and when it does, the Best Asset Now strategy can generate explosive growth for traders, but now is not the time

 

Proprietary Investor Strategy Confirms Cycle Trends

My proprietary Technical Investor strategy has moved into GREEN trending bars – aligning very closely with the MAGENTA ARROW on the Stock Market Stages chart above. I’ve drawn both a GREEN & RED arrow on this chart to highlight the potential trending outcomes that likely depend on how quickly Inflation levels drop.

If Annual Inflation levels drop below 3% before we start Q2:2023, then I believe we may see a softer US Fed and more significant potential for a recovery in the US/Global markets over the next 18+ months.

On the other hand, suppose Annual Inflation levels stay above 6~7% over the next 6+ months. In that case, I believe the US Federal Reserve will attempt to continue to raise rates aggressively – eventually resulting in a “bear market” breakdown event in the US/Global asset markets.

Comparing 2008 Bear Market Breakdown With 2022 Price Action

The last time we experienced a major Inflationary event where the US Federal Reserve was not actively supporting the US economy with QE policies was in 2007-08. This event prompted a -57% decline in the SPY before bottoming out and a -55% decline in the QQQ. Many of you lived through that market collapse and have strong feelings about how destructive that move was for everyone.

 

2022 Bear Market Breakdown

This time, after 12+ years of QE, prompting the “Everything Bubble,” – just imagine what could happen if my research is correct. But let me be very here. I am not forecasting, predicting, or saying this will happen. I do things differently when it comes to trading and investing. I only own assets and hold positions that are rising in value. I do this by following price charts and managing risk and positions.

You won’t ever catch me trying to pick a bottom, averaging down into losing positions, and you won’t find me trying to pick a top, either. What you will experience if you follow my work is that I always research and know all the possibilities an asset could move, and I plan to navigate each one safely. Once the price charts confirm a direction, I position my portfolio to profit from the new trend, which can be up or down.

A Tough Year Even for Experienced Investors

This year alone, the S&P 500 is down over 18%, and treasury bond ETF TLT is down 28%. As a result, anyone investor using the buy-and-hold strategy with any mix of stocks/bonds in their portfolio is under tremendous pressure and likely starting to worry about outliving their retirement funds.

Here is a little background on the market markets for you. First, there have been 26 bear markets since 1929, with an average loss of 35.62 percent and an average duration of 289 days. Mind you, some of those bear markets were only a few months long, while others were multi-year declines, with some taking 5, 12, and even 17 years to return to breakeven.

But the reality is breaking even with your assets is still a significant loss. After many years of being in a drawdown like that, don’t forget you are paying 0.50% – 2% annual fees from ETFs, mutual funds, and possibly advisor fees. Simple math shows that with a 17-year drawdown spending 1+% year to hold these losing positions, you still have a 17+% loss when assets return to breakeven because of these costs.

I know all this sounds bleak, and rightly so, it is. But there is good news. Market corrections and bear markets can be identified early and safely navigated if you know what to look for and follow the market VS. buy and hope, or try to pick market bottoms and tops.

2022 has been a very tough year to make money from the markets, not because of the market decline but because of the stage 3 phase in which the stock market is currently. It does not know if it wants to find a bottom and rally or roll over and start a steep bear market swan dive.

Concluding Thoughts

In short, the world and even more so, the financial markets and assets have a habit of applying the maximum pain to investors before reversing direction. In fact, there is a “Max Pain” calculation in the options market to know where the maximum pain/losses will be for the stock market, and it’s crazy scary how the market will reach this price level during options expiry days on many cases.

The bottom line here is that the worst thing that could happen to most investors and capital in the markets now would be a multi-year bear market and drawdown in the markets, which would cripple anyone nearing retirement and everyone already retired. Having your nest egg cut in half will send shockwaves worldwide to the largest group of investors, the baby boomers, and anyone retired. In addition, it will likely create a flood of people looking for jobs to subsidize their retirement and crush many dreams, and that’s just the beginning of potentially a big unraveling of the economy, I think.

Labor rates will fall as millions of individuals look for work, we will be in a recession, and businesses will be laying off millions of employees, making it even harder to get a job. We are already seeing layoffs taking place. Then we could see the real estate market (residential and commercial) starting to fall apart. Things start to get a little depressing beyond that, so I’ll stop here, but you get my gist, I hope.

The average investor is positioned for higher prices with the buy-and-hold strategy. The critical thing I am trying to share with you is what could happen on the downside if things continue to erode and that you should think about how your lifestyle could change in the next 3-10 months if/when this happens and if you think you will be comfortable with your situation.

Every week I remind investors I work with that now is not the time to expect to make money. Instead, it is about capital preservation. Focus on not losing; growth will naturally come in due time.

If you have any questions, my team and I are here to help you safely navigate both bull markets and bear markets with our CGS Investing Strategy.

Chris Vermeulen
Chief Investment Officer
www.TheTechnicalTraders.com

Disclaimer: This and any information contained herein should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from websites, articles, videos, seminars, books or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any security or commodity contract. Our advice is not tailored to the needs of any subscriber so talk with your investment advisor before making trading decisions. Invest at your own risk. I may or may not have positions in any security mentioned at any time and maybe buy sell or hold said security at any time.

 

[Tom Nolan + 2,443]

On a lighter note, this is pretty funny....

https://www.zerohedge.com/markets/booya-behold-inverse-cramer-etf-has-finally-arrived

Booya! Behold, The Inverse Cramer ETF Has Finally Arrived

by Tyler Durden

Thursday, Oct 06, 2022 - 09:25 AM

For as long as we can remember - it seems like scores of years, eons, epochs even...people have joked far and wide on social media and privately in social circles about the creation of an Inverse-Jim Cramer ETF.

Now, not unlike Cramer himself, the joke is being taken seriously.

The same group that brought you SARK, the inverse ARKK Fund ETF (which by the way is up nearly 2x since its inception), have now filed for both an Inverse Cramer ETF, to trade under SJIM, and a Long Cramer ETF, to trade under LJIM.

In a prospectus filed yesterday, it says the inverse fund "is an actively managed exchange traded fund that seeks to achieve its investment objective by engaging in transactions designed to perform the opposite of the return of the investments recommended by television personality Jim Cramer".

"Under normal circumstances, at least 80% of the Fund’s investments is invested in the inverse of securities mentioned by Cramer," it says of its strategy. 

The filing continues:

The Fund’s adviser monitors Cramer’s stock selection recommendations throughout the trading day as publicly announced on Twitter or his television programs broadcast on CNBC, and sells those recommendations short or enters into derivatives transactions such as futures, options or swaps that produce a negative correlation to those recommendations.

The Fund’s portfolio generally is comprised of 20 to 25 equity securities not recommended by Cramer. To the extent possible, the Fund’s portfolio is equally weighted. The Fund may invest in securities with any market capitalization and in securities of issuers located in the United States and abroad.

Should Cramer recommend buying any of the securities in the Fund’s portfolio, the Fund will dispose of those holdings. Should Cramer recommend selling any of the securities in the Fund’s portfolio, the Fund will keep those holdings. If Cramer does not take any view on any of the securities in the Fund’s portfolio, the adviser retains discretion to sell positions once profit or loss targets are met, or market conditions such as large swings in either direction necessitate a sale and replace them with securities that meet the criteria of the Fund’s initial portfolio. Under normal circumstances, the Fund will hold positions no longer than a week.

It hasn't just been the entire financial industry that has been mocking Jim Cramer for sport for years (well deserved - recall, Cramer has been caught on video admitting to manipulating securities and recommending Bear Stearns in the weeks before the bank went bust), it has been countless scores of market participants on social media, including the "apes" over at WallStreetBets. 

Cramer's poor track record has even spawned its own Twitter account, the "Inverse Cramer ETF", which tracks all of Cramer's poor calls.

TWIITER IMAGE VIDEO  - (see article)

https://twitter.com/CramerTracker/status/1503427064862490627?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1503427064862490627|twgr^d099555b7e060605727c8d68b4dda2f4438499b4|twcon^s1_c10&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fmarkets%2Fbooya-behold-inverse-cramer-etf-has-finally-arrivedhttps://twitter.com/CramerTracker

Either way, we're sure the new ETF will have no trouble attracting attention and investors. We also can't help but wonder if this public acceptance of Cramer's uncanny ability to get things wrong is finally a reason to start looking at taking him seriously.

Regardless, here's one call we're sure the inverse ETF is upset they missed out on...

 

[Tom Nolan + 2,443]

The following Vermeulen article about Real Estate has a chart of stock market trends and "We are here" notation on the graph.  https://thetechnicaltraders.com/prepare-for-massive-wealth-creation-in-2023/  https://web.archive.org/web/20221024210048/https://thetechnicaltraders.com/prepare-for-massive-wealth-creation-in-2023/

Vermeulen was interviewed on Kitco Monday 24th Oct and talks about how the stock charts point to a brief "Christmas rally" before heading further south.  https://www.youtube.com/watch?v=EeYweMnKLAg

Gareth Soloway who has made some spot-on price calls gives a 10 minute overview in this interview.  Gold/silver possibilities given.  https://www.youtube.com/watch?v=IUy9CRaQDR0

[Tom Nolan + 2,443]

Many of us know about the trend, because we have been watching it since January 2021.  Because there is a huge EXCESS MORTALITY rate in 2022 compared to previous years, the Funeral Business is making robust profits (more than a half billion dollars so far in 2022 for one company).

https://alexberenson.substack.com/p/the-funeral-business-is-booming-and/comments

The funeral business is booming. And not because of Covid

Alex Berenson Nov 2 How bad is the rise in mortality? So bad funeral companies are starting to worry. Today Service Corporation International, the largest for-profit funeral operator in North America, had its quarterly earnings call. SCI had another great quarter, you’ll be pleased to hear! So far in 2022 the company has made almost $500 million in profits - and its stock rose more than 10 percent today after its earnings report. (Death is your best investment!)   SCI’s management seems fairly open with investors. For many years, much of the company’s growth came from buying family-run funeral homes as their operators, umm, died out. The underlying funeral business is slow growth and very predictable. At least it used to be. As Thomas L. Ryan, Service Corporation’s chairman and chief executive, told investors Wednesday morning: If you go back in this industry and particularly with SCI, year-to-year you would see the numbers of deaths -- probably in one year you may be down 1% or 2%, in the next year you're up 1% or 2% which you could predict was pretty good accuracy over a year and over a big footprint like ours what was probably going to happen… 2020 comes along, Covid, game-changer, right. We're having to do at one point of time 20 percent more funerals which is unheard of in a year versus, let's say, a year or two before. So Service Corporation expected that once Covid passed, its business would go back to normal… What we would have expected is, why wouldn't we go back towards, let's say, a 2019 level, maybe you get a percent or so growth of 2019, I would expect that. So that would be a reasonable level that we think would stabilize. And that's kind of what we anticipated... Only that’s not what has happened. What we're telling you is, the third quarter of this year, we did 15% more calls than we did in the third quarter of 2019. That is not what anybody would have anticipated and that has just a very de minimis amount of Covid deaths [emphasis added] in it. Covid is gone. But people keep dying. Why? Unsurprisingly, Ryan did not mention mRNA vaccines anywhere. Why would he? Doing so would only make for headaches he and Service Corporation do not need. But, earlier in the call, he did point to “more cancer deaths” and more broadly a decline in overall health: We believe these excess services are more permanent in nature into a combination of aging demographics, higher risk, less healthy lifestyle developed during the pandemic. Ryan also suggested delayed medical care might be an issue. These explanations are… strained, at best. Aging demographics are hardly new, and the lockdowns that drove a “less healthy lifestyle” ended as early as mid-2020 in most red states and by early 2021 almost everywhere. Opioids and overdoses generally remain a horrendous crisis, but deaths appear to have peaked in early 2022 and fallen slightly since. And for all the discussion of delays in medical care, hospitals and doctors offices have functioned essentially normally for at least 18 months. In any case, the United States is hardly alone in seeing a large and so far unexplained spike in deaths in 2022. Countries from Germany to Australia to Taiwan are seeing similar trends. They all have something in common. No points for guessing what. In any case, Service Corporation is expecting business to stay good for years to come. “These trends are hard to reverse quickly,” Ryan said. “I hope three, four, five years from now will subside a bit. But I don't think it's any time soon.”

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/The-Best-ETFs-To-Play-Energy-Markets-Right-Now.html

The Best ETFs To Play Energy Markets Right Now

By Alex Kimani - Nov 10, 2022, 7:00 PM CST

• An ETF explosion has taken over the financial market as exchange-traded funds enjoy the lion’s share of investment dollars globally.
• Investors see oil and gas ETFs as a great way to hedge their portfolios against inflation and hedge fund risks.
• Several oil and gas related ETFs pay investors a healthy dividend.

Join Our Community

While analysts are busy expounding on the impact on oil prices of America’s November 8 elections, China’s zero-COVID policy going forward, inflation and production and inventory numbers, exchange-traded funds (ETFs) are a great way to play high commodity prices amid a global energy crisis and a conflict in Europe.  Most, but not all, ETFs are passive, and passive investing has been tapped to continue outperforming its more active brethren amid the current period of heightened uncertainty.

An ETF explosion has taken over the financial market as exchange-traded funds enjoy the lion’s share of investment dollars globally--even as investors continue flocking to passive funds and shunning actively-managed mutual funds.

The following funds could help you hedge against inflation and geopolitical uncertainty.

Energy Select Sector SPDR ETF 

AUM: $42.8B

Expense Ratio: 0.11%

Dividend Yield (FWD): 3.45%

YTD Returns: 54.7% 

With more than $40 billion in assets under management (AUM), the Energy Select Sector SPDR ETF (NYSEARCA:XLE) is the largest dedicated energy fund. It’s also the most liquid and among the cheapest, with an expense ratio of just 0.11%.

XLE tracks the price and yield performance of companies in the Energy Select Sector Index. The index offers investors broad exposure to companies in the oil, gas and energy equipment industries. 

Related: Kazakhstan Prepares To Boost Oil Exports

Another key attraction: the ETF has a respectable 3.45% dividend yield (FWD).

One of its shortcomings though is that the ETF holds just 26 stocks in its portfolio, with ExxonMobil (NYSE: XOM) and Chevron Corp.(NYSE: CVX) over-represented, accounting for more than 40% of the entire portfolio value.

Vanguard Energy ETF 

AUM: $11.0B

Expense Ratio: 0.10%

Dividend Yield (FWD): 3.23%

YTD Returns: 54.9%  

Vanguard funds are traditionally known for undercutting the competition on costs, and the Vanguard Energy ETF (NYSEARCA: VDE) has remained true to this ethos by offering the lowest pricing in the sector. 

With 110 stocks--albeit with significantly less AUM than XLE-- VDE is much better diversified than XLE, though XOM and CVX still play outsized roles with weightings of 22.4% and 16.2%, respectively.

VDE tracks the performance of the MSCI US Investable Market Index (IMI)/Energy 25/50, an index consisting of stocks of large- and mid-cap U.S. energy companies. 

United States Oil ETF, LP

AUM: $2.1B

Expense Ratio: 0.83%

Dividend Yield (FWD): N/A

YTD Returns: 30.7%        

The United States Oil ETF, LP  (NYSEARCA: USO) seeks to track the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma. USO invests primarily in futures contracts for light, sweet crude oil, other types of crude oil, diesel-heating oil, gasoline, natural gas, and other petroleum-based fuels. 

Back in April 2020, USO gained notoriety after becoming the focus of the worst oil price crash in history. WTI futures contract sunk an agonizing 310% to minus $38.45/barrel marking the first time that a futures contract for U.S. crude prices went negative--and made all those seemingly improbable ‘negative oil’ prognostications suddenly appear prescient. 

Negative oil prices is an absurd notion that essentially means that producers would pay traders to take the oil off their hands. USO, the country’s largest long-only crude oil exchange-traded fund (ETF) was to blame for the debacle as it owned 25% of the outstanding volume of May WTI oil futures contracts.

Thankfully, a repeat of that kind of mayhem is unlikely after USO moved 20% of the WTI contracts it holds into later months in a bid to lower volatility. And there’s no chance of negative oil right now. 

Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2x Shares ETF 

AUM: $800.6M

Expense Ratio: 0.95%

Dividend Yield (FWD): 0.39%

YTD Returns: 84.3%

The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2x Shares (NYSEARCA: GUSH) is an exchange traded fund that was launched by Direxion Investments in May 2015.

GUSH invests in public equity markets of the United States. The fund uses derivatives such as futures and swaps to create its portfolio and invests in growth and value stocks of companies across diversified market capitalization. It seeks to track 2x the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index (SPSIOP). Being a leveraged fund, GUSH is prone to wild daily swings especially when oil prices are volatile.

Inverse ETFs

Inverse and inverse-leveraged ETFs create an inverse short position or a leveraged inverse short position in the underlying index through the use of swaps, options, future contracts and other financial instruments. Thanks to their compounding effect, investors are able to enjoy higher returns over short periods of time provided the trend prevails.

Short sellers have now resorted to trading inverse ETFs that bet against the S&P 500 such as ProShares UltraPro Short S&P500 (SPXU), UltraPro Short Russell2000 (SRTY), Daily Dow Jones Internet Bear 3X Shares( WEBS), ProShares UltraPro Short QQQ (SQQQ), and ProShares UltraPro Short Dow30 (SDOW). All these inverse ETFs are in the green, with WEBS having really outperformed with a 201.7% YTD return.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• Russia’s Oil Output Set To Fall By 1.5 Million Bpd In December
• Oil Prices Jump As U.S. Inflation Comes Below Expectations
• Oil Prices Could Soon Break $100 As Upside Risk Grows

[Tom Nolan + 2,443]

Monday Nov 14 - BLOOMBERG

https://finance.yahoo.com/news/quants-forced-shed-225-billion-221532432.html

Quants Forced to Shed $225 Billion of Short Bets in Big Squeeze

Fast-money quants were effectively forced to buy an estimated $225 billion of stocks and bonds over just two trading sessions, as one of Wall Street’s hottest strategies in the great 2022 bear market shows signs of cracking.

As cooling consumer price data sparked a cross-asset rally, trend-following traders were compelled to unwind short positions totaling about $150 billion in equities and $75 billion in fixed income on Thursday and Friday, JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou estimated.

 

Given their notable firepower, Wall Street strategists are now touting the potential for further sharp market gains -- if these systematic managers such as Commodity Trading Advisors find themselves under pressure to hike their exposures anew.

CTAs, which take long and short positions in the futures marketplace, may purchase $28 billion worth of stocks this week if benchmarks close largely unchanged, according to an estimate from Scott Rubner, Goldman Sachs Group Inc.’s managing director. Should bonds stand still, that could lead to $40 billion of purchases over the next week -- and potentially $100 billion in the next month, his model tracking various markets suggests.

The projections signal an ongoing allocation shift among the rules-based cohort, who have netted historic gains by riding the inflation trade earlier this year, with bearish bets against shares and Treasuries combined with bullish exposures to the dollar and commodities.

“Most CTA AUM momentum is now positive and demand from this community is going to explode,” Rubner wrote in a note to clients Friday.

Stocks oscillated between gains and losses Monday, with the S&P 500 starting the day in the red before rising as much as 0.4%. The index then dipped again in afternoon trading to close the session 0.9% lower.

Getting a grip on the exact picture of the quant world is far from easy. Models built on subjective assumptions often spit out different numbers. A similar analysis by Nomura Securities International’s cross-asset strategist Charlie McElligott, for instance, showed that the systematic cohort bought a more modest $61.4 billion of stocks and $2 billion of bonds last week.

Still, the analysis helps shed light on the fierce rally, one that many say was an over-reaction to the softer-than-expected reading in October’s consumer price index. At a minimum, the exercise illustrates the importance of tracking technical indicators such as fund positioning at a time when the fundamental picture remains murky.

Up almost 6% last week, the S&P 500 has taken out some key trendlines, including its average prices over past 50 and 100 days. According to Goldman, CTAs likely stepped up purchases when the index recaptured the 3,804 level -- which flashed positive short-term momentum signals -- and 3,966, seen as a threshold of momentum over the medium term.

If the sudden bounce endures, it will be a challenge to an industry that has thrived in a year where hot inflation and the Federal Reserve’s campaign to tame it became the anchoring force for asset performance.

An index by Societe Generale SA tracking CTAs slipped for a sixth straight session through Friday. Down 5.2% over the stretch, the industry just suffered its worst bout of performance since March 2020.

Kathryn Kaminski, chief research strategist and portfolio manager at AlphaSimplex Group, said it’s too early to call an end to the great inflation trade. The firm’s AlphaSimplex Managed Futures Strategy Fund (ticker ASFYX), which slipped almost 5% last week, is still up more than 38% this year.

“The short-term relief trade looks counter to the past trend, but when we consider the longer term outlook there is still evidence based on Fed commentary this weekend and the overall level of inflation that this trend will not be over so quickly,” Kaminski said in an interview. “In simple terms, some of the key issues still remain and rates may still need to go higher to get to a more stable level of inflation.”

Despite the buying binge, CTAs are far from being risk-on. Currently, the industry is neutral on equities and short on bonds, according to estimates from Deutsche Bank AG.

“There is potential for them to add to both equity and bond positions as exposure to both is quite low,” Parag Thatte, a strategist at Deutsche Bank, said in an interview. But it “relies on their volatility continuing to go down and for the market to stay flat or up.”

To JPMorgan’s Panigirtzoglou, the risk for the group is another market reversal.

“Now that their shorts are largely covered, the bleeding would stop and they could start making profit if the recovery continues and start building up long positions,” Panigirtzoglou said in an interview. “The worse scenario for them is reversals, i.e. to start building up long positions over the coming weeks and then whipsawed by a market reversal.”

[Tom Nolan + 2,443]

Chris Vermeulen (See Stage 3 chart above) goes over Gold and Silver and what to expect in the markets, both physical and on the exchanges, in both the near term and then after the beginning of 2023.  The general stock market is discussed.

Wall Street Silver YouTube Channel - Nov 19, 2022 - 14 minute video interview

Silver & Gold Prices Are Moving! Will They Go Lower From Here? - Chris Vermeulen

https://www.youtube.com/watch?v=-YOV1M4FfJo

Edited November 23, 2022 by Tom Nolan

[Tom Nolan + 2,443]

From By Greg Hunter’s USAWatchdog.com 

November 19, 2022 - 58 minute video

In the interview, past the halfway mark, Rickards outlines why there is a shortage of Dollars and how that marketplace has changed with margin calls, derivatives and collateral.

Also see the script description of the interview at the link.

Unstoppable Crash Worse than 2008 Coming – James Rickards

https://usawatchdog.com/unstoppable-crash-worse-than-2008-coming-james-rickards/

https://www.zerohedge.com/markets/you-cant-put-it-back-together-jim-rickards-warns-unstoppable-crisis-worse-2008

 

[Tom Nolan + 2,443]

November 18 - 11 minute video

Fascinating learning instructive as Gareth show us the Charts and correlations to time and past similar events.

By the way, Gareth has correctly called Bitcoin prices many times over the years.

Breaking News! Gareth Reveals When And What Price Bitcoin Will Bottom At

https://www.youtube.com/watch?v=fs23gKADUEo

 

[Tom Nolan + 2,443]

This is a gem…
Prior to the 2008 crisis, Jim Cramer goes over tactics that he or others had used to manipulate the markets.

Jim Cramer explaining the basics of stock market manipulation
(10 minutes 42 seconds)
https://web.archive.org/web/20210225013555/https://www.youtube.com/watch?v=8DJlogbrDcA&gl=US&hl=en
[The YouTube video is still live, but it has been archived and so I used that.]

Taken from…
~~WWW zerohedge.com/markets/santa-pause-rally

[Tom Nolan + 2,443]

https://www.zerohedge.com/personal-finance/consumer-economy-has-completely-collapsed-its-ghost-town-holiday-shopping

The Consumer Economy Has Completely Collapsed – "It's A Ghost Town" For Holiday Shopping Everywhere

by Tyler Durden

Sunday, Nov 27, 2022 - 04:30 PM

Authored by Sundance via TheConservativeTreehouse.com,

“Crowds? I see nothing. I’m surprised,” retail worker Jeremy Pritchett told FOX 2.

“Normally, it’s wrapped all the way around the building. Today: no one.”

That’s the typical ground report from areas all over the country.  No one, literally almost no one, is doing any holiday shopping and the traditional Black Friday rush to get deals and discounts just didn’t happen.  Financial media are scratching their puzzlers, perplexed with furrowed brows.

 

Interestingly, almost every financial media outlet is using the same Retail Federation talking point about anticipating an 8% increase in holiday sales this year.  Apparently, pretenses must be maintained.  Meanwhile, news crews and camera crews are having a desperate time finding any holiday shopping to use as background footage for the claims that sales are strong.

“Look, over there. There’s a person buying something. Oh, wait, no, that’s just an employee dusting the empty cash register.”  At a certain point, one would have to believe reality would run head-first into the mass delusional pretending.  Maybe this holiday season will be it, maybe not.

Reuters – […] About 166 million people were planning to shop from Thursday’s Thanksgiving holiday through this coming “Cyber Monday,” according to the National Retail Federation, almost 8 million more than last year. But with sporadic rain in some parts of the country, stores were less busy than usual on Black Friday.

“Usually at this time of the year you struggle to find parking. This year, I haven’t had an issue getting a parking spot,” said Marshal Cohen, chief industry adviser of the NPD Group Inc.

“It’s a lot of social shopping, everybody is only looking to get what they need. There is no sense of urgency,” Cohen added, based on his store checks in New York, New Jersey, Maryland and Virginia.

At the American Dream mall in East Rutherford, New Jersey, there were no lines outside stores. A Toys ‘R’ Us employee was handing out flyers with a list of the Black Friday “door buster” promotions. (read more)

It’s almost Kafkaesque to see how the media are continuing to maintain economic pretenses, yet the reality of a completely collapsed consumer economy is physically staring them in the face.

(Bloomberg) – Activity Light at One San Francisco Mall (4:40 p.m.) – At the Stonestown mall in San Francisco, shoppers were few and far between. The Target and Zara stores were mostly empty, and there was no line for the mall’s Santa Claus. Uniqlo and Apple were the busiest locations, but they still weren’t crowded. 

[…]

Crowds were thin in the late morning at the Stamford Town Center mall. Kay Jeweler, empty. Safavieh, empty. Only a couple of people waited at the checkout line at Forever 21 and just a few were in line for a purchase at Barnes & Noble.

[…]

At a Target store on Chicago’s North Side, the parking lot was barely half full at about 9 a.m. local time. Shoppers were greeted with $3 ornaments and discounted Christmas trees when entering, and the store seemed calm and relatively quiet.

[…]

The Macy’s in Stamford, Connecticut, was neat and orderly — maybe a little too neat and orderly on a day associated with shopping chaos. The furniture section was nearly deserted, though there were more shoppers looking at shoes. (read more)

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Crude-Oil/December-Could-Offer-The-Mother-Of-All-Buying-Opportunities-For-Oil.html

December Could Offer ‘The Mother Of All Buying Opportunities’ For Oil

By Josh Owens - Nov 23, 2022, 11:00 AM CST

• Oil traders are eyeing “the mother of all buying opportunities.”
• Oil prices have been weighed down with recession fears and surging Covid cases in China.
• As the EU embargo on Russian oil looms, traders could see one last washout ahead of the ban which could take crude down to the low $70s.

Join Our Community

Oil traders and speculators could see the “mother of all buying opportunities” for WTI crude oil in December, as oil prices are about to dip further in the coming days, CNBC’s Jim Cramer says.

Oil prices have traded down so far this month, as fears of recession and China’s surging Covid cases have weighed on market sentiment despite the imminent EU embargo on imports of Russian crude oil by sea.

Early on Wednesday, Brent Crude traded at $85 per barrel, and the U.S. benchmark was below $80—at $78 a barrel after reports emerged that the EU is currently discussing a price cap on Russian oil of around $65-$70, which isn’t really capping the price of Russia’s crude which trades at a $20 a barrel discount to Brent anyway.

Citing a chart analysis by Carley Garner, co-founder and analyst at Decarley Trading, CNBC’s Cramer said that “She thinks there could be one last washout from this week, possibly early through December, and that washout could take crude down to the low $70s, or even the mid-$60s. Once we get there, she believes that could be the mother of all buying opportunities.”

According to the analyst, WTI Crude typically registers a big slide on or around Thanksgiving Day, exacerbated by thin trading volumes around the holiday and an OPEC meeting which is always held at some point at end-November or early December.

“Historically, some of the most devastating oil declines have occurred on or about Thanksgiving day,” Cramer said on Tuesday.

While oil could later rebound, a possible rout and turbulence in oil prices from Thanksgiving Day through early December could be a huge buying opportunity, according to Jim Cramer.

Earlier this week, investment bank  Goldman Sachs slashed its oil price forecast by $10 to $100 per barrel for the fourth quarter, citing lockdowns in China that would dampen demand for the commodity.  

By Josh Owens for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Recovers After Volatile Start Of The Week
• Today’s Energy Crisis Is Unlike Anything We’ve Ever Seen Before
• Near-Record Number Of Covid Infections Weigh On Oil Demand In China

[RichieRich216 + 454]

Tom,

Good read; Bitcoin is and always will be a Ponzi Scam; it has nothing of value behind and supporting it. Why people bet into this is crazy; no fundamentals at all. People are better off going to a Casino where when they eventually lose their money, they at least losing it to a business that hires people, the building is taxed. Just saying....

[TailingsPond + 1,006]

1 hour ago, RichieRich216 said:

Tom,

Good read; Bitcoin is and always will be a Ponzi Scam; it has nothing of value behind and supporting it. Why people bet into this is crazy; no fundamentals at all. People are better off going to a Casino where when they eventually lose their money, they at least losing it to a business that hires people, the building is taxed. Just saying....

In fairness bitcoins are far from free to mine.  It requires a lot of electricity and expensive computer hardware - so some people are profiting from the industry regardless of the value of the bitcoin.  Just sell electricity and GPUs.

Edited November 30, 2022 by TailingsPond

[RichieRich216 + 454]

I can see your point, but if FTX didn't show how corrupt players are using fake coins, False Revenue Statements, you have to question the lies and scams being played on people who 1. Can't afford to be a part of it. 2. The money being thrown into it by Hedge Funds and why?

There is nothing of value that backs this type of investment. 

[Tom Nolan + 2,443]

https://archive.ph/lNgg6

This trader sees a 43% drop for the S&P 500 and says to take shelter in these ETFs instead.

Published: Dec. 1, 2022 at 7:02 a.m. ET

A day after the Dow DJIA, +2.18% climbed out of bear territory on hopeful comments by Fed Chairman Jerome Powell, stock futures indicate a rethink of that optimism, as inflation data looms.

The Fed chief’s suggestion of a 50 basis point hike vs. 75 bp in December wasn’t new, but investors got excited anyway, says the founder & CEO of BullAndBearProfits.com, Jon Wolfenbarger. But his dovish tone could lead to looser financial conditions, bringing with it higher inflation, and more rate hikes to control that, he tells MarketWatch in an interview.

In our call of the day, the former Wall Street investment banker warns that the cards are stacked against equity markets for the foreseeable future, and offers charts to back that up.

From his latest blog post is this one showing the CBOE Volatility Index, or the VIX VIX, +0.15%, bouncing off a trend line that in the past has shown prior bottoms for that index and peaks in the S&P 500 this year:

BullandBearProfits.com

The next chart shows the S&P 500 in a “clear bear market downtrend with lower highs and lower lows” and trading under its 250-day moving average (red line) and downtrend line (blue line), he says:

BullandBearProfits.com

Then there’s all that bullishness, despite a nearly year-long bear market, That bull/bear ratio reached historically bullish levels at the early 2022 market peak and remains in very bullish territory, he said.

 

BullandBearProfits.com

“This bearish technical setup for the stock market, combined with overly bullish investor sentiment in the face of the Fed hiking rates into a recession, suggests that the stock market is likely to start another major bear market selloff soon,” said Wolfenbarger, who sees that recession starting any day and ending around late 2023 or early 2024.

Far from more optimistic forecasts seen elsewhere on Wall Street, the money manager is targeting 2,250 for the S&P 500, a 43% tumble from current levels, though a bottoming in mid-2023. That bear market will last a total of 18 months, not far off the 17-month bear market seen in the Global Financial Crisis.

But don’t rev up the shopping carts just yet. “Based on current valuation levels for the stock market that are near the 2000 Tech Bubble and 1929 peaks, the S&P 500 is likely to be at least 25% lower in 10 to 12 years,” he predicts.

His advice? Sell “risk on” assets like stocks, commodities (including energy stocks, which will drop along with oil as a recession kicks in) and cryptocurrencies — highly correlated with tech stocks. Treasury bonds will be riskier than normal during a recession owing to high inflation, he adds.

 

“For those who are risk-averse and want to wait this bear market out until the next bull market starts, you can buy safe and relatively high yielding Treasury bills and floating rate notes,” said Wolfenbarger, who suggests ETFs, such as the SPDR Bloomberg 3-12 Month T-bill ETF BILS, +0.02% and the WisdomTree Floating Rate Treasury Fund ETF USFR, -0.02%.

For aggressive investors looking to profit more significantly from a bear market, he suggests inverse ETFs that rise when stocks fall, such as ProShares Short S&P 500 ETF SH, -3.08% and ProShares Short QQQ PSQ, -4.62%. Those who want to be even more aggressive, can buy double inverse ETFs such as ProShares UltraShort S&P 500 SDS, -6.17% and ProShares UltraShort QQQ ETF QID, -9.08%.

An investor looking to profit from falling oil prices could buy double inverse oil ETF ProShares UltraShort Bloomberg Crude Oil SCO, -5.81%.

“After the Fed starts cutting rates and the recession becomes well-entrenched, we will look for stocks to become very oversold (we focus on key technical indicators for this such as Weekly & Monthly RSI and Bollinger Bands) to take profits from this bear market and then position for the next bull market with individual stocks and long and levered-long ETFs,” he says.

The markets

 

Stock futures YM00, +0.20% ES00, +0.43% NQ00, +0.35% are lower. The dollar DXY, -0.87% is under pressure and oil CL.1, +2.81% is modestly higher.

Read: Most deeply inverted Treasury curve in more than 4 decades has one upbeat takeaway for investors

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

The buzz

Salesforce shares CRM, +5.65% are falling in premarket after disappointing revenue guidance. The customer-relations cloud software giant is also losing another CEO. Software maker Splunk SPLK, +2.36% is climbing on upbeat forecasts, and Okta OKTA, +4.04% is up after the software security group promised a profit in 2023.

Orthofix Medical stock OFIX, +3.57% is up after the back surgery medical device maker said it got an unsolicited $23-a-share takeover offer from two private-equity firms.  

Netflix NFLX, +8.75% co-founder and CEO Reed Hastings admitted the streaming giant should have added commercials years ago.

Weekly jobless claims, the PCE price index for October — the Fed’s favorite inflation gauge — real disposable and consumer spending are all due at 8:30 a.m. The Institute for Supply Management’s manufacturing index and construction spending will follow. And more Fedspeak: Feb Gov. Michelle Bowman at 9:30 a.m. and Fed Vice Chair for Supervision Michael Barr at 3 p.m.

Lawmakers look set to intervene and stop what could be a crippling railroad strike.

In a bid to prevent more unrest, Beijing will reportedly allow low-risk infected people to isolate at home, but first they have to promise not to leave in writing, backed up by fitted magnetized sensors on their doors.

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/US-Shale-Growth-To-Disappoint-In-2023.html

U.S. Shale Growth To Disappoint In 2023

By Tsvetana Paraskova - Dec 05, 2022, 5:00 PM CST

• EIA: U.S. oil production hit nearly 12.3 million bpd in September.
• Although output is growing, the pace is half the growth rate seen in the rebound after the 2015-2016 oil price slump.
• Cost inflation and a worker shortage continue to weigh on growth.

[Article continues]

~~~~~~~~~~~~~~~~~~~~~~~

https://oilprice.com/Energy/Energy-General/Energy-Stocks-Are-A-Big-Buy-Right-Now.html

Energy Stocks Are A Big Buy Right Now

By Alex Kimani - Dec 05, 2022, 6:00 PM CST

• Oil prices are currently down by more than 30% from their 52-week highs.
• Energy stocks remain cheap despite the major runup earlier in the year.
• Energy stock PE ratios suggest many companies are still significantly undervalued.
•  
• [Article continues with details]

[Tom Nolan + 2,443]

Host Craig Hemke and analyst Chris Vermeulen of the Technical Traders break down all the charts you need to see how long the coming downturn could last…and why you want to be ready when it turns up again. December 6, 2022  (20 minutes)

Sprott Money - https://www.youtube.com/watch?v=R2zg1g2rdiI

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15 minutes - Bank of International Settlements

How $65 Trillion in "Hidden" Dollar Debt Can Spark the Next Banking Crisis

https://www.youtube.com/watch?v=TsPTbiZUY_A