Over the past two weeks, I have become a net seller into this weak stock market rally. I talked extensively about it in our last webinar: https://youtu.be/_11AvJl3m_M While I do not believe what is coming is “the big one” as far as market corrections is concerned, I do think it can mimic significantly what happened in February, but for different reasons. For those who would actively try to navigate an uncertain stock market, […]
Exchange Traded Funds
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Summary You must differentiate oil from oil stocks. Oil is extremely volatile in the short-term and even more difficult to trade. Many oil stocks are seeing increasing cash flow, leading to higher shareholder yield, as they realize higher oil sale prices. Oil stocks are a still a screaming buy in my opinion and I think one easy play ETF will double in share price within 2 to 3 years. There […]
Summary Risk assets have very little support – stocks are risk assets. President Trump’s trade policy is high risk and has an unknown ending. While valuations have come in, earnings are clearly peaking, making the CAPE ratio relevant. Indexers and closet indexers will get hit badly in a correction or outright bear market. Use market strength to lighten up allocations to stocks and raise cash levels. The time has finally […]
Oil prices have fallen the past month. This is not strictly supply and demand driven. With oil, there is far more that impacts spot prices. Oil is impacted by oligopolies (America), cartel (OPEC) and Russia are protected by policy, capital and collusion. If oil were a free market, it would indeed be $50ish in price long-term.
Our trades on the U.S. Oil Fund (USO) and PowerShares DB Oil ETF (DBO) calls have all round tripped. So has the ETF position on U.S 3x Oil Fund (USOU). As covered in the Oil Is Going To A Brazillion article I don’t think we have a lot of risk in these positions, however, this week might not be fun.
This column should be read after: Two Weeks Until Oil Begins Rally To $80 It is very rare that I use levered ETFs. The opportunity has to be striking. In most cases I greatly prefer options to levered ETFs due to the expenses related to levered ETFs and other structural issues. Right now however, there is a compelling argument to use a levered oil fund. As you know, I believe […]
For about two years, I have outlined that the OPEC/Russia oil production agreement would be successful in reducing oil inventories. I have further made the case that oil demand would continue to rise in the short term, oil supply could face disruptions and that the price of oil would rise to around $80 per barrel by this summer. We are at the doorstep to $80 now.
Energy has been a top performer for decades. Over the past few years it has seen a volatile road crashing from highs. Recently oil and gas rallied into late autumn, however, there has been a recent correction. This correction is another, maybe the last, excellent opportunity to buy into the “Last Great Secular Oil Bull Market” in my opinion.
This stock market is moving very fast right now. As I discussed a few days ago in “This Correction Could Have Another Leg Down:” The surge in volatility might be more than just an isolated event, it could be a harbinger of what might come next. Well, what is coming next appears to be an actual real live bear market. We can’t be certain of course, but if Friday ends with […]
I was near Albany, NY when the flash crash of August 24, 2015 hit. I was on my way out to a retreat with friends in the White Mountains of New Hampshire. The stock market was down 5.3% the first few days after the open that day. Buying stocks quickly that day worked for me as I had put 10 good til cancel limit orders in before I left for […]