Now it's time to start paying attention. This is the most important economic indicator. If it keeps getting worse then the market is going to tank.
Hillary Clinton is dismayed for sure. If jobless claims keep rising then it will only be a matter of which Republican. Because we haven't even recovered from the last recession and that won't bode well for creating confidence in how their policies impact the prosperity of Americans. Obviously this is a world wide event but most people aren't that smart and the US is a dominate influence on world economic prosperity.
It was not normal for oil to be correlated with stocks which only happened recently. There is no reason for them to be correlated.
I exit with trailing stops. This is a short term play and it is never clear at any point in time where this stock is going, if lower or higher. So I just let it stop out on its own. That way I don't get caught up in circular arguments as to why I should hold longer or sell now. I start off with a 25% trailing stop, then lower it to 20%, then 15%, and then 10% until I'm stopped out. With this approach I can never lose more than 25% but since I short when the VIX is very high is always drops by more than 25% before I get stopped out. I was stopped out today.
If the market keeps getting more volatile then at some point I will stop investing altogether and wait for the next recession if that is what is causing this. This market is looking very much like 2007.
In the 4th quarter 2014 retail revenue growth was 4%, in the 4th quarter of 2015 it was 2%. These numbers might get revised up but it is not looking good. Then KORS reports good earnings and its stock pops 18%. So go figure. There is no clear picture of what is going to happen next. But it doesn't feel nearly as good as it did a year ago.
What amazes me is that most people are still sitting in their 401k plans like nothing is going to happen as if none of this was going on. I guess it is a distraction to them to understand what is going on and more of a distraction to actually make a decision based on that.
I'm currently 100% cash. I'm not making any money but I'm not losing any money either. One thing I have learned is to not feel compelled to have your money in an investment if it is not. Sometimes it is better to just wait. It's not like we have inflation to erode its value.
that if you are looking for those spikes that triple the value of TVIX that those only occurred in the past when the VIX was sitting at a value of around 12.5, which is VERY low, and then any amount of volatility at all looked massive by comparison. Now the same amount of volatility doesn't look so high relatively speaking because the VIX never gets that low anymore. So volatility in the 20s is not going to have the same effect as it did before because you are already half way up the mountain. Everyone needs to lower expectations, both longs and shorts because, we both make more when the VIX starts from a lower starting point. Because the ratio of the peak to valley is much larger. I am not expecting to make as much on this stock as I have in the past. It is important to realize this or you may come up with unreasonable exit points that you never hit and this never make money.
Actually, TVIX seems to be acting more normal of late. Normal behavior for this stock is to see short spikes up with longer periods of declines between the size of the declines exceeding the size of the spikes up. The last 5 months have been the aberration.
We have trade imbalances with Europe too. The entire world keeps stashing dollars in their central banks so as to devalue their currencies making it harder for the us to compete. The Republicans didn't realize that free trade only works when trade is fair and the Democrats want to kiss everyone's #$%$ so they look the other way. The end result is that middle cl#$%$ jobs disappear to other countries. No one has decided to put an end to currency manipulation by punishing countries that don't trade back our currency. An inflated dollar is what the rest of the world wants so it's easier for them to take our jobs. Imported products are too cheap. So we cannot compete. And they would not have it any other way and we don't stop them from screwing us over. We just act dumb.
I doubt it. And even if she ended up in jail the Democrats would still vote for her. They don't care.
Isn't Boon Pickens trying to create an NG infrastructure company as a substitute for gasoline? At least he was before. So anything the causes NG adoption in the US means profits for him. So I have to take that into consideration when I hear him talk on NG.
Only if there was the ability of natural gas use to displace oil rapidly. I doubt that is the case because then it would cease to be abundant as rapid demand growth would cause their to be a shortage of NG. So it is only $20 because it can't displace oil so fast to allow its supply to be restricted. The barriers of natural gas displacing oil is infrastructure. Who would not buy a natural gas car if you could drive into any gas station and fill up on NG? But you can't. You have to find one of the sparsely located NG dispensaries. Its still a hassle to get NG refills so most people have decided to not deal with it. Having to plan every trip based in where you can get access to NG would be a pain. So basically you leave your NG car at home and rent to travel outside the city. But if they solve the NG infrastructure problem then frackers would move to NG fields and drill less in oil fields. At some point NG would no longer be selling for $20 however because it would no longer be in abundance as its access to new markets would use up its excess supply and it would become more valuable.
Unfortunately lower gas prices will cause people to buy more gas inefficient SUVs and that will reverse the trend of more efficient fuel us in the US.
The three largest producers are
Saudi Arabia 11.7 bbl/day
US 11.1 bbl/day - was 5.5 bb/day in 2012 so it has doubled
Russia 10.4 bb/day
world production is 80 bbl/day so these 3 countries produce 41.5% of the worlds oil.
The US adding 5.6 bbl/day probably caused the glut. Unlike Saudi Arabia we cannot restrict our oil output. We can only exceed our internal needs and if the export ban is not lifted then we are maxed out internally. Oil production in the US has leveled off since the beginning of 2015.
US oil consumption peaked at 21 mil bbl/day in 2005. We are now down to 18.9 bbl/day. US oil consumption in 1980 was 17 bbl/day. Demand over the last 30 years has been pretty flat if you average out the yearly variations. There are more cars but they get better gas mileage.
They are asking other major oil producers if they can agree to a 5% reduction in output. I think the Saudi's realized that by the time this happened on it's own that their banks accounts would not be looking very healthy.
You don't look at TVIX for entry points. You look at the VIX. Because the VIX has consistent peaks and valleys without contango decay. You start entering when the VIX is in the mid teens if you are going long. You enter when the VIX is in mid 20s if you are going short. These break points need to be adjusted depending on historical volatility. Used to be I would start shorting when the VIX went above 19. But the VIX is at 22 now after having gone as high as 32. Buying long when the VIX is in the 20s should never be done unless the economy is in the process of entering a recession which it is not.
I invested long in 3 solar companies and they all tripled in value. I didn't short much in 2007. I was more long centric back then. But then I realized that many of the things I was able to predict with a higher degree of accuracy would require a short position to exploit so I now do both.