Oil up Market Up-Band Aid or Cure

[James Regan + 1,776]

Oil Jumps - Rebound??

Markets Jump - Rebound??

Are these just “tools” being used OR is this just a bandaid on the inevitable???

Hmmmmm......

[Old-Ruffneck + 1,242]

6 minutes ago, James Regan said:

Oil Jumps - Rebound??

Markets Jump - Rebound??

Are these just “tools” being used OR is this just a bandaid on the inevitable???

Hmmmmm......

yup, a lot of "tools" out there messing with the markets. Oil up to 46.21$ at 09:45am and Dow up 110 points. Saw a blurb on Fox Market watch maybe the Feds going to lower interest rates in couple weeks. I wonder how many Billions evaporated last weeks? And what was the massive selloff for? I remember an OilPrice.Com article around mid November predicting oil to drop 1st quarter to a possible mid 40's range so can't really blame the virus there. I dunno?.....strange.

[James Regan + 1,776]

1 hour ago, Old-Ruffneck said:

yup, a lot of "tools" out there messing with the markets. Oil up to 46.21$ at 09:45am and Dow up 110 points. Saw a blurb on Fox Market watch maybe the Feds going to lower interest rates in couple weeks. I wonder how many Billions evaporated last weeks? And what was the massive selloff for? I remember an OilPrice.Com article around mid November predicting oil to drop 1st quarter to a possible mid 40's range so can't really blame the virus there. I dunno?.....strange.

Think it was Trillions (T) wiped, nothing changed with the CV19 só it must be that “IN CASE OF EMERGENCY BREAK GLASS” thingamagig 🤕 

[Zhong Lu + 845]

Outside day.  Obvious reversal.  Buy,  buy, buy.

Don't know how long it'll last.  Don't particularly care.  But this week is going to be a good week for bulls almost everywhere.

[ronwagn + 6,290]

Coronavirus still a big factor for many months https://www.dailymail.co.uk/ushome/index.html

Number of people dead from coronavirus in the U.S. rises to SIX after four new deaths as top infectious disease official warns the spread has reached 'pandemic proportions'

• The coronavirus death toll in the U.S. climbed to six - all in Washington state - on Monday 
• Five of the six deaths have been linked to the LifeCare long-term care facility just outside Seattle 
• It comes after Dr Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, has warned that the coronavirus has likely reached 'pandemic proportions'
• The leading expert went on to say the U.S. might need to consider social mitigation, including closing down schools and not allowing events where large crowds are in confined spaces 
• It comes after Dr Matt McCarthy, who works at New York-Presbyterian Hospital, warned coronavirus cases will surge into the thousands by next week
• He also claimed he doesn't have the tools to properly care for patients because of the lack of coronavirus tests being made available to hospitals
• Health officials have been scrambling to get their own coronavirus testing kits up and running after getting stuck with faulty tests from the federal government
• Scott Gottlieb, who is the former FDA commissioner said three critical weeks were lost in trying to contain the spread of coronavirus in the U.S. because of the faulty tests 
• The U.S. Department of Health and Human Services confirmed on Sund

[0R0 + 6,251]

The CDC test kit flub was very bad. May have cost us the chance to prevent the epidemic from developing. Their actions to prevent local test facilities from doing their own tests was inexcusable and heads should roll for that. 

As I said before, elsewhere, it was time to buy on the Friday plunge as the markets were oversold and panic was palpable. There was no doubt that news of Fed easing would come over the weekend. So that companies disrupted by the China quarantine can hold onto dear life as they scour the planet for parts and materials so they can finish work in progress and build inventories. 

 

The Fed has again undershot its mark and is missing the inevitable implications of supply chain disruptions in financial markets.

1. greatly increased short term credit demands to fund extended production runs held up by missing China sourced components assemblies and materials.

2. Additional short term credit for funding construction of alternative supplies.

3. There is a push up in costs of china sourced materials parts and components while final goods prices are being pressed down by demand shifting to hoarding essential supplies. Thus profit margins are pressed and can not tolerate even minor interest rate costs.

4. Money markets remain stressed as the Fed has not pushed out sufficient reserves to cover the draw on same day money from the Eurodollar system via repos, US foreign owned cash accounts and the currency draw. I.e. same day money. The balance is still near negative for free reserves. So much so that the last leg of the stock market rally to 2 weeks ago did not manage to obtain any funding from Margin Debt, due to tight money markets.

The Fed must act now to press banks to lend more, inject much more reserves and lower rates further as indicated by the bond market till the yield curve straightens out.

Those Fed related worries of them not reacting to real credit demand and the need for lower rates was what made the supply chain problems into a serious wash out of equities. If it were just a couple of weeks' worth of missing Chinese supply then there would have only been a blip. This was about prolonged supply chain disruption and most of all financial crisis because of a lack of funding support for working capital and for consumers stretched by the need to load up on 14 day's worth of essentials and disinfectants. 

[0R0 + 6,251]

It is going to take a while, but the next few years are of industries moving and duplicating China production into new locations with a wild West scramble to build infrastructure and plant as far as Inner Elbonia to get cheap labor and inattentive regulation.

It will all eat oil and commodities. 

[ronwagn + 6,290]

How will refiners, gasoline and diesel truckers, and retailers do during the low prices until demand increases?

[0R0 + 6,251]

How did they make it before?? These are hardly the lowest prices of the last few years.

[Old-Ruffneck + 1,242]

2 hours ago, ronwagn said:

How will refiners, gasoline and diesel truckers, and retailers do during the low prices until demand increases?

Retailers will still sell close to same amounts. Still gotta get to work and or go out to eat etc. Most retailers Ron rely more on their beer, soda fountain, candy and ciggs. Think of a CircleK and here in Peoria 96c after tax for the 44oz Polar Pop. Factor in syrup,cups.ice 15c max so they sell just at one station I go 400+ during winter, and close to a 1000 in summer. That profit pays the electric bill and some of the employees wages. 

[Wombat + 1,028]

11 hours ago, Zhong Lu said:

Outside day.  Obvious reversal.  Buy,  buy, buy.

Don't know how long it'll last.  Don't particularly care.  But this week is going to be a good week for bulls almost everywhere.

Maybe the next 48hrs will be good for the bulls, but once Friday comes along, everyone will be heading for the exits again coz reality will sink back in? I smell a dead cat bouncing!

[Zhong Lu + 845]

Possible. Already thinking of selling.  Been a nice bounce.  Will see price action 48's proving to be a problem.

Edited March 3, 2020 by Zhong Lu

[George8944 + 128]

3 hours ago, ronwagn said:

How will refiners, gasoline and diesel truckers, and retailers do during the low prices until demand increases?

Refiners will do fine.  Their margins are based on the crack spread - the difference between buying and selling.   Rapid gyrations up and down play havoc between there is a lag between when they buy and refine.  However a steady decline is manageable.    Similar arguement is for the pipeline operators.  The charge by volume not the price of the item in the pipe.

[George8944 + 128]

Personally,  I hope the market continues dropping to bear territory.  We need a good house cleaning before I retire!   Purely selfish on my part.  Once we get back to a baseline, I can build a plan that may actually work.   With the FED blowing ever bigger bubbles it hard to plan long term.  

My guess is we will have a roller coaster to ride most of 2020.  Corola is just entering the US so there's still lots of anxiety (read: volatility) to weather.   If Corola dimishes as weather warms like the flu, we will have a reprieve until next Winter.  Maybe by then a vaccine will exist and this will be a memory.   I'll stop waxing on now.  I haven't a clue what lies ahead.  I'm in mostly cash and plan on playing the Options market and do some opportunitic buying of stocks I can hold for years and years.

[James Regan + 1,776]

7 hours ago, George8944 said:

Personally,  I hope the market continues dropping to bear territory.  We need a good house cleaning before I retire!   Purely selfish on my part.  Once we get back to a baseline, I can build a plan that may actually work.   With the FED blowing ever bigger bubbles it hard to plan long term.  

My guess is we will have a roller coaster to ride most of 2020.  Corola is just entering the US so there's still lots of anxiety (read: volatility) to weather.   If Corola dimishes as weather warms like the flu, we will have a reprieve until next Winter.  Maybe by then a vaccine will exist and this will be a memory.   I'll stop waxing on now.  I haven't a clue what lies ahead.  I'm in mostly cash and plan on playing the Options market and do some opportunitic buying of stocks I can hold for years and years.

I agree the market should clean house, the whole game is fickle, just look at what’s fueling this rebound, nothing but words like HOPE, SHOULD, EXPECTED etc. 

I don’t trade but I’m glad I don’t as I am impulsive and the market is most definitely driven on impulse fueled by impulsive and fickle rhetoric from financial institutions and Gov.

Edited March 3, 2020 by James Regan

[Douglas Buckland + 6,308]

James, James, James.....we don’t trade because we are oilfield trash and are lucky to remember to breath! Can you imagine the disaster if we tried to ‘long’ or ‘short’ anything?

The second shortest thing on us is our memory!

[BLA + 1,666]

22 hours ago, Old-Ruffneck said:

yup, a lot of "tools" out there messing with the markets. Oil up to 46.21$ at 09:45am and Dow up 110 points. Saw a blurb on Fox Market watch maybe the Feds going to lower interest rates in couple weeks. I wonder how many Billions evaporated last weeks? And what was the massive selloff for? I remember an OilPrice.Com article around mid November predicting oil to drop 1st quarter to a possible mid 40's range so can't really blame the virus there. I dunno?.....strange.

G7 meeting today to reduce rates across the board.  

Japan pre-announced joint effort yesterday that started stock rally.

But are lower rates going to get more people to travel ?  Buy more ?   Just like OPEC coming cut, more psych than substance. 

Hope it helps.

Doctor on TV last night said no indication that it will get as bad as 1918 " at this time".  Odds low but NOBODY KNOWS.

Edited March 3, 2020 by BLA

[James Regan + 1,776]

Fed did something and this happened, if you think you can preempt the markets I believe your deluded.

[Zhong Lu + 845]

Most of the cut was factored in yesterday.

As of now I think we're staring at an algo fight.  Note the random spikes early morning up and down for XOM, oil prices, the rest of the S&P.

I reckon I'll exit now out of most long positions. Back to INO.  

[Old-Ruffneck + 1,242]

On 3/2/2020 at 8:52 AM, Old-Ruffneck said:

yup, a lot of "tools" out there messing with the markets. Oil up to 46.21$ at 09:45am and Dow up 110 points. Saw a blurb on Fox Market watch maybe the Feds going to lower interest rates in couple weeks.

Hmmmmm, little sooner than I figured!!

The Federal Reserve slashed interest rates Tuesday in an emergency move to cushion the U.S. economy from the coronavirus outbreak, driving a volatile market rally.

The central bank's 50 basis-point reduction, the largest cut since the 2008 financial crisis, took its benchmark fed funds rate to a range of 1 percent to 1.25 percent. The move followed heavy pressure from President Trump and a massive selloff last week in U.S. equities.

Edited March 3, 2020 by Old-Ruffneck
add

[Zhong Lu + 845]

Despite rate cut, still turning red. Not a good sign.  Means most of it's already priced in yesterday.  Either way, already out 30 minutes ago.

EDIT: Holding UGAZ with position still from yesterday.  INO out @ 5.2  Waiting for reentry.

Edited March 3, 2020 by Zhong Lu

[ronwagn + 6,290]

15 hours ago, Old-Ruffneck said:

Retailers will still sell close to same amounts. Still gotta get to work and or go out to eat etc. Most retailers Ron rely more on their beer, soda fountain, candy and ciggs. Think of a CircleK and here in Peoria 96c after tax for the 44oz Polar Pop. Factor in syrup,cups.ice 15c max so they sell just at one station I go 400+ during winter, and close to a 1000 in summer. That profit pays the electric bill and some of the employees wages. 

When traveling we take full advantage of such places whenever we fill up with gasoline. My wife is terrible with snack buying but we both like the Polar Pop or Big Gulp etc. Diet for me. She is Eve to my Adam though, I end up eating some of her snacks. We live in Decatur and Circle K just took over a few stations here. 

[James Regan + 1,776]

6 hours ago, Douglas Buckland said:

James, James, James.....we don’t trade because we are oilfield trash and are lucky to remember to breath! Can you imagine the disaster if we tried to ‘long’ or ‘short’ anything?

The second shortest thing on us is our memory!

I know the last thing I “spread” but as far as “bouncing cats” with Bulls and Bears and Floating Bond Margins pulling up short, it’s all drilling report style talk to me, if your in it you get it if not it’s all Chinese , can I say that anymore and.... (see picture) ???

Edited March 3, 2020 by James Regan

[ronwagn + 6,290]

On 3/2/2020 at 8:38 AM, James Regan said:

Oil Jumps - Rebound??

Markets Jump - Rebound??

Are these just “tools” being used OR is this just a bandaid on the inevitable???

Hmmmmm......

I feel optimistic. I think there are great buying opportunities in the stock market. 

[Bob D + 562]

3 hours ago, Zhong Lu said:

Despite rate cut, still turning red. Not a good sign.  Means most of it's already priced in yesterday.  Either way, already out 30 minutes ago.

EDIT: Holding UGAZ with position still from yesterday.  INO out @ 5.2  Waiting for reentry.

Ladies and Gentlemen ..... Listen to Zhong LU.  He said INO!!   Up 55% today!