At some point, I expect a very major short squeeze. It may be temporary but should be abrupt. All the market needs is the glimmer of bullish oil news or an unsubstantiated rumor and it will be shocking how sharply it will upturn.
This is based on the following observation. Oil is more oversold today on a weekly chart than at any time in the past 20 years...as far as my charts go back. More oversold than at the height of the financial crisis. There's probably so many people short oil or own put options that Wall Street is salivating at how it can screw everyone over by going big against everyone else. And it will happen without warning when everyone else has thrown in the towel expecting it to never rise again. Even if Wall Street has to manufacture a rumor, they can do it easily because they control the media as well.
What I'm saying is not to try and time it at all and get out of the oil trade altogether. Being the most oversold in over 20 years is a big deal and I know there will be a sharp reversal any day now. It is impossible to time but it's way overdue and the clock is ticking.
The signal I am looking for is one giant intraday flush showing signs of capitulation.
Wrong. Here's why.
Low oil prices will cause less drilling and less investment on future projects. It makes no sense for producers to try and get more oil out of the ground when it is not profitable. They will sit on those reserves until prices rise again.
Low oil prices will stimulate the global economy which in turn stimulate more oil consumption.
Low oil prices cause less demand for solar and other fuel alternatives, causing higher demand for oil consumption.
Low oil prices cause less demand for electric cars and people will return to buying less fuel efficient cars.
Low oil prices will cause lower production and higher demand. This will lead to an oil price superspike.
I'm long AAL and some other airlines. I was responding to the original poster's message how oil will stay low for many years but I am expecting an oil superspike A YEAR or more out due to the inevitable declining investment and global economic resurgence low oil prices will have. That has nothing to do with how AAL will perform in the short and intermediate future. Mine is a long-term prognosis based on the fact that oil has way oversold and will have long term impacts in the reverse direction as a result.
When the CFTC or anyone gets rid of manipulation on Wall Street, including commodities, the Universe will have collapsed in upon itself. They will ALWAYS find a way. It is the way of man.
And don't think that the manipulation in oil isn't working in the reverse right now. Wall Street controls the media and the people that produce the inventory reports. Wall Street loves bubbles in both directions and they are likely orchestrating a big negative one in oil right now. That is why I'm expecting a superspike in the price of oil when this is all said and done. That is what makes the Big Boys very rich.
JVA drops 15% to $4.60 on 20,000 shares at the opening bell. 10 minutes later, it goes to $5.48 and someone has a bid to buy 8,600 shares at $5.47.
Something extremely strange is going on here.
I cannot believe the morons that trade this stock. What it looks like to me is someone placed a sell order and accidentally made it a market instead of limit order. That in turn tripped limit sell orders and caused a cascade effect.
This is the SECOND time this has happened. The other time an idiot placed a market sell order of 60,000 shares one minute after the Malaysian jet was shot down over the Ukraine. Yeah, that has a lot to do with coffee sales.
Do me a favor, people. Before submitting your sell orders with JVA, make sure they are LIMIT and not MARKET orders. You guys are throwing money away when you do this and this stock doesn't recover from your mistakes.
Someone fat fingered their sell order and mistakenly made it a market instead of limit sell. There is nothing wrong with JVA, just 2 idiots that don't know how to place trades properly. Same thing happened when the Malaysian jet was shot down over the Ukraine and someone placed a market sell order causing a steep and unwarranted plunge.
Almost a year ago to the day, JVA had a similar flush day that it did today. That day turned out to be the lowest JVA traded for an entire year, until today. Noticed it when I looked at the chart, it's pretty easy to spot one flush day a year and last time it happened, that day was the absolute bottom for the stock for an entire year.
FPP is up 8% as I write this. I wanted to capture this moment before it gets bodyslammed again when the stock specialist realizes the mistake he made letting the stock actually go up. He's already dropping the asking price so I'd better post this now.
My guess is it was an errant trade. The trade was placed at 9:31:00, 1 minute after the market opened. JVA ALWAYS has the widest gap between the bid/ask at the opening. There is not a worse time to place a market sell order, especially when the market opens deep red. I'm sure there were stop loss orders that triggered as well, exacerbating the selloff. As I noted earlier, 10 minutes later after the stock dropped to $4.50, there was a single buy order of over 8,000 shares at $5.48.
It can happen. On December 1st, a yet unnamed hedge fund mistakenly placed a large market sell order on AAPL causing it to drop 6% in a single minute, losing $40 billion in market cap. It was meant to be a limit order.
What happened to JVA this morning wasn't an overly large order. The volume quickly escalated to 20,000 shares but that was probably because of stop loss triggers and other people jumping in and out trying to figure out what the heck was going on. It's just that it happened right at the market open when the bid/ask spread is very wide and the buy orders hadn't even lined up yet. It could be manipulation but my guess is someone just mistakenly messed up their sell order.
Media wants you to believe that somehow, cheap oil is harmful. From 1995-2000, one of the biggest bull markets in history, the US dollar kept rising and the price of oil kept falling. The problem here is not that oil is falling, but how quickly it has fallen. Companies depending on high oil prices are not able to react properly and will have to abandon wells that are no longer profitable and reduce future spending. This will result in an oil superspike down the road. I do think the Government should take steps to try and keep oil from freefalling. They could announce they will fill their strategic reserves, or lift the ban on exporting US oil.
That is why it has been spiking the past couple of sessions. Funding for the government ends tonight at midnight so a partial shutdown may happen tomorrow. The House just passed a spending bill but it's unlikely the Senate will vote on it tonight and the Senate would probably reject it anyway because they are controlled by Democrats which oppose the spending plan. The other scenario is a short-term continuing resolution could be passed tonight to keep the government running to buy them some more time to work out an agreeable plan that can be passed by both sides.
Right now, VXX has formed a perfect head & shoulders pattern. If It goes up considerably tomorrow, all bets are off and no telling how high it could go. A down day for VXX could start a market rally. A lot will depend on the Fed statement tomorrow.
FPP's stock started to be manipulated on May 22nd, 6 full weeks before oil prices started plunging. Although my conclusion that someone wanted to buy the company was errant, something highly unusual was happening and my guess is that the Big Boys knew oil was going to be body slammed and they grabbed hold of FPP and manipulated it lower 6 weeks before the oil event started to happen.
As for JVA, any sudden volatility between now and the end of the year can be attributed to tax loss selling. Some people will sell JVA no matter what the price before December 31st.
For the rest of JVA's business, I have to mention something potentially significant. GMCR announced days ago is moving most of it's US coffee buying operations to Switzerland. This constitutes the core of their green coffee procurement. This is probably being done for tax purposes.
GMCR moving their coffee buying to Switzerland could have enormous ramifications for JVA. Then again, it may not have much impact. Since the company shares absolutely no information with the public, there's no way of really knowing. Keep an eye out for JVA setting up more international distribution centers. Hopefully one pops up in Switzerland and you can draw conclusions from that.
I pointed out rampant manipulation began on May 22 and 7 months later, the stock is down 70%. Coincidence?
FPP started falling weeks before oil did. It started falling in June, oil prices didn't fall until July. No other oil company I could find did that. Point is, somebody was manipulating this stock weeks before oil went down. I pointed out the manipulation to everyone here which started on May 22nd, 2 weeks before the stock started it's freefall descent. I have followed FPP for at least 10 years and everything changed on that particular date.
The chart here shows a huge move up possible starting as early as tomorrow (Friday). If GMCR has an 8% or higher move tomorrow or Monday, don't be surprised. When GMCR has had this chart pattern in the past, it almost always moves up that much in a sungle day.
What is the number this week? $111.50? $112? And do they still let AAPL rise on Mondays? I haven't been here for a while but that used to be the game...down on Fridays, up on Mondays.