***Official*** 2015 Stock Market Thread

[JEDI]

going to short oil when it goes up to $50/barrel.
so far it climbed 4% today to a high of 48.25 then fizzled down to 47.25

 

[JEDI]

what happened w/oil?!
my live screen stopped at 2:30pm for oil?! and there seems to be a huge spike in volume at that exact time as well.

also read that oil spiked above $50 but CNBC's oil chart doesn't show that?
http://data.cnbc.com/quotes/CLG5/tab/2

WTF happened w/oil today?!

edit:
damn it.. hope I don't regret missing the triple short opportunity when oil briefly went over $50 today

 

[Imp]

Oh, you know, "the market" thought that the oil market was _______ <oversold/overbought> and went ____ <up/down> too fast too soon, so it ________ <fell/rallied>.

 

[JEDI]

mlk day:
no trading in the US but oil finished down to $47 in international trading due to Iraq producing a record amount of oil.
that more than offsets the # of rigs shut down in the US last week.

so basically, if I understand this right, only the US is cutting back on oil production because they're driven by profit.
Countries that are desperate for oil for income cant cut back.

I guess the same goes for shale oil in the US.
they still must pump to service debt.
but sooner than later, these shale oil companies will go bankrupt because the income from super low oil wont cover the debt payments or the shale well runs dry and they don't have the $ to tap new shale.

market will bottom out when enuf US rigs/shale oil stop pumping to equalize supply/demand.
so the Saudi's/OPEC plan to grab market share at the cost of the US will work???

 

[Imp]

mlk day:
no trading in the US but oil finished down to $47 in international trading due to Iraq producing a record amount of oil.
that more than offsets the # of rigs shut down in the US last week.

so basically, if I understand this right, only the US is cutting back on oil production because they're driven by profit.
Countries that are desperate for oil for income cant cut back.

I guess the same goes for shale oil in the US.
they still must pump to service debt.
but sooner than later, these shale oil companies will go bankrupt because the income from super low oil wont cover the debt payments or the shale well runs dry and they don't have the $ to tap new shale.

It's a holiday down south? Didn't know.

That's what I heard. Gotta keep pumping for the cash flow. This is going to take a while.

 

[zephyrprime]

It's a holiday down south? Didn't know.

That's what I heard. Gotta keep pumping for the cash flow. This is going to take a while.

Without more people willing to cut production, we're going to see oil prices crash even more.

 

[JEDI]

Without more people willing to cut production, we're going to see oil prices crash even more.

now for the million dollar question:
why is there support at $44/barrel?

 

[Imp]

There was sorta support at $70 and $60 and $50. It's probably just taking a break before going down more.

From what I've gathered, the outlook has only worsened over the past few weeks. Remember that the great crash of 2008-ish took over a year to bottom out. We're about half a year in so far?

 

[Kwatt]

Without more people willing to cut production, we're going to see oil prices crash even more.

I read somewhere that in the US. Output is expected to increase through the end 2015 at least.

If the price of gas keeps falling all of 2015 like the last 6 months of 2014. I will be getting paid to haul it off when I fill up.

I am kidda sorta starting to believe that prediction of $25.

And it cost ~$10 a barrel to ship out of ND doesn't?


.

 

[JEDI]

lol.. where did u hear the prediction of $25?
last I read was low $30s.

if breakeven for the Saudi's is $35 then I cant see them not cutting production at that point.
price might drop a couple of $ below that till the surplus gets used up and we're at a supply/demand balance.

but I cant see it reaching $10 below the Saudi's breakeven point.
I cant see so much surplus at that time that it'll take that long for it be used up till the price stabilizes

 

[Kwatt]

lol.. where did u hear the prediction of $25?

Not a prediction just a comment about OPEC not cutting production.

http://www.yourmiddleeast.com/business/opec-will-not-cut-output-even-at-20-a-barrel-says-saudi_28743

.

 

[manimal]

How much oil is Isis selling on the black market right now? I have a feeling that as long as that is available prices are gonna stay low.


The consequences though is Russia is being destabilized every day and hard liners are pushing for more invasions.

 

[JEDI]

Not a prediction just a comment about OPEC not cutting production.

http://www.yourmiddleeast.com/business/opec-will-not-cut-output-even-at-20-a-barrel-says-saudi_28743

.

Naimi said that with their comparatively low production costs of $4-$5 a barrel, Gulf nations and particularly Saudi Arabia "have the ability to hold out".


$5? what?
if breakeven is $35 and it costs $5 to get oil out of the ground, then the costs to ship it + administrative costs are $30/barrel?!

 

[JTsyo]

How much oil is Isis selling on the black market right now? I have a feeling that as long as that is available prices are gonna stay low.


The consequences though is Russia is being destabilized every day and hard liners are pushing for more invasions.

60,000 barrels, it doesn't make much of a difference on international oil prices.

 

[JEDI]

hope I don't regret missing the triple short opportunity when oil briefly went over $50 today

that was fri.
today is tues morning and oil is down to $46.

sigh.. that would have been 20% gain in 4 days

 

[IHateMyJob2004]

Naimi said that with their comparatively low production costs of $4-$5 a barrel, Gulf nations and particularly Saudi Arabia "have the ability to hold out".


$5? what?
if breakeven is $35 and it costs $5 to get oil out of the ground, then the costs to ship it + administrative costs are $30/barrel?!

Saudi Arabia's cost is $35/barrel.

 

[IHateMyJob2004]

60,000 barrels, it doesn't make much of a difference on international oil prices.

NPR had a talk on black market oil. It is estimated that as much as 10% of the oil coming out of gulf states is black market oil and not accounted for in metrics.

Losses are everywhere. From the little guy drilling a hole in a pipeline and not stealing much to hundreds of thousands of gallons basically stolen by bribing the person at the port responsible for loading ships (this also requires an "extra" copy of an export form that is needed when importing). So, this is go to port to pick up 1 million barrels. Bribe pumper to put an extra 200,000 on. Have a "duplicate" form from another ship that took that 200,000 barrels. And the exporting of stolen oil is complete along with paper work to import oil.

Find actual NPR story for exact details. I might be off on terminology.

 

[JEDI]

Saudi Arabia's cost is $35/barrel.

huh?
so why did the Saudi rep say $5/barrel?

btw- Iran just affirmed the $25/barrel possibility if OPEC doesn't cut.
(but isn't Iran part of OPEC?)

 

[Imp]

Iran based their budget on $100/barrel or something though.

So, Canadian dollar died again. Down from CAD$ 1 = US$ 0.845-ish to US$ 0.835.

 

[Kwatt]

Iran based their budget on $100/barrel or something though.

I may have gotten this confused so double check it.
I think the $100/barrel was at 1 million a day. I believe it was announced they upped production to 4 million a day.

That does not sound right to me either but, that is what I remember... They say memory is the second thing to go.


.

 

[sm625]

If you're trading 3X ETF/ETNs you've probably read this before, but I have to strongly recommend against going long those stocks. Look at ERY (Direxion Daily Energy Bear 3X). Due to slippage, it trends downwards over time, which is why you only want to deal in put options on such a security. The slippage works in your favor. The spreads are really bad on these, obviously, since the volume is low and no one in their right mind would want to write a put option on a 3x ETF. But you can get them. For example, ERY April 2015 $18 puts have about a 25% spread. But all it would take is a modest rally in XLE, like 15%, to make good money. Of course this isnt acrude oil play, this is based off XLE. It's related to oil but not exactly the same. Keep in mind that the stocks that make up XLE are far more likely to benefit from Federal Reserve intervention. If the Fed bails this sector out, then you're looking at $18 puts being worth in the neighborhood of $7-$10, which is awfully damn close to a 10-bagger. Meanwhile, you'd only be looking at roughly 3x gains if you played a crude oil 3x long ETN. I personally wouldnt make this play, because there are cheaper ways to bet on an oil rally. For example, OIL Jun 2015 14.000 calls are around 50 cents right now. Any sort of central bank game playing could send OIL past $20 leading to an easy 10 bagger. You know its going to happen sometime in the next year, a huge spike in oil prices. So it does kind of make sense to buy call options in that "slightly out of the money band" on a quarterly basis and just wait to hit that 10 bagger and cash in.

But that's really not my thing. I'm all about the QQQ right now. Last week I got a crash warning on the nasdaq. Well, it didnt crash, but it was a nice decline and led to a 4 bagger on qqq puts. I have that same signal again right now. As usual, I expect the word "crash" to be somewhat hyperbolic. I hope for a 6-8% decline in 3 day type of move, but all I really need is a 2% decline to make money. From here the likelihood of a 2% decline on the nasdaq is extremely high. Timeframe is again 5 days.

 

[Imp]

I may have gotten this confused so double check it.
I think the $100/barrel was at 1 million a day. I believe it was announced they upped production to 4 million a day.

That does not sound right to me either but, that is what I remember... They say memory is the second thing to go.
.

You tell me. I don't see where they suddenly found 300% more customers unless they dropped prices below market.

If you're trading 3X ETF/ETNs you've probably read this before, but I have to strongly recommend against going long those stocks. Look at ERY (Direxion Daily Energy Bear 3X). Due to slippage, it trends downwards over time, which is why you only want to deal in put options on such a security. The slippage works in your favor.

Ya, I did the math in the shower on 2x leverage and decided that I didn't want to lose everything if oil dropped 33%... It's done that within weeks lately, and when/if it gets down to the $25-$35, that'll probably happen with even more ease.

If I go long on oil, it'll be USO or DBO -- think they're unleveraged, long crude-based ETFs.

 

[tortillasoup]

You tell me. I don't see where they suddenly found 300% more customers unless they dropped prices below market.



Ya, I did the math in the shower on 2x leverage and decided that I didn't want to lose everything if oil dropped 33%... It's done that within weeks lately, and when/if it gets down to the $25-$35, that'll probably happen with even more ease.

If I go long on oil, it'll be USO or DBO -- think they're unleveraged, long crude-based ETFs.

USO etfs are no good either due to them using contracts which eventually expire. Go look at the USO chart starting in '07 and follow it to 2014, despite oil's run up in price, it never really recovered its value due to decay.

 

[Imp]

USO etfs are no good either due to them using contracts which eventually expire. Go look at the USO chart starting in '07 and follow it to 2014, despite oil's run up in price, it never really recovered its value due to decay.

Good thing I was only doing prelim research... Just checked the 08/09 chart, it bottomed to around $24 when oil was about $35, then USO topped out since at $45 -- oil's been up to ~$110. Last I checked, 110/35 /= 45/24. Similar with DBO... Dafuq?

So what is a good ETF that essentially tracks crude prices with zero leverage?

 

[JEDI]

sm625,

I know nothing about calls/puts.
what do you mean 10 bagger? 10x return?

how does a Put (short) of a fund going from $18 to $7 = 10x return?