Van
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Posts posted by Van
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$1275.
Breaking out right now.
I think we are going to be playing this one quite often in the next few years:
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PMs popping today. The bears are losing their grip.
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PMs and gold in particular looking very strong here. Perfect bull market consolidation behaviour after a good run up - the miners have resisted any selloff admirably, and now leading spot gold higher. Breakout above $1265 very possible this week.
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Comex about to run out of silver?
http://www.silverseek.com/commentary/deliverable-silver-stocks-comex-reach-historic-low-15331
At some point, someone will want to take delivery and the stuff won't actually be there, it'll just be a warehouse of IOUs.
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Here's the update, thanks to Frizzers!
http://moneyweek.com/money-morning-the-charts-you-love-to-hate-uk-house-prices-in-gold/
If anything, it just shows how ABSURDLY detached from reality London has become.
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Big rally in USD today, whacking PMs back down. Can't say it wasn't due. I am not discounting the possibility of a further leg down and new lows in Gold/Silver.
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Gone ballistic today.
Well done if you've held on (sadly I have not!).
And the completely reversed and wiped out any gains made since Thursday, showing just what a difficult market this is to trade and how chasing a big move can leave you as the greatest fool (at least for now).
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Crude jumps +9%.
Given the current extreme ratios, does anyone else think that Crude is in the same position today as Gold was in 2001?
- The world is not going to stop using oil any time soon.
- The market needs a new growth story, and India will overtake China as the world's most populous nation in about 2020.
- Old oil fields such as North Sea oil are unprofitable at these levels and could be closed down for good
- current prices are limiting capex and impinging future capacity
I can think of many reasons to be bullish.
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Gone ballistic today.
Well done if you've held on (sadly I have not!).
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The spotprice Gold:Oil ratio is now at a nosebleed 46.4.
And the DJIA:Oil ratio is now at 597.
With Crude @ $32 and gold @ $1100, I make it that we are seeing a historical extreme in the Gold:oil ratio:
1100/32 = 34.3
http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart
= 0.03 Oil/Gold ratio
Is this cheap?
http://www.financialsense.com/contributors/dominic-frisby/is-oil-cheap-compared-to-stocks
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Just keeping track of UK house prices vs gold...
Frisby wrote this a year ago:
http://moneyweek.com/compared-to-gold-uk-property-is-starting-to-look-expensive/
currently the ratio stands at: £197k / £823 = 239
ie, 239 oz of gold to buy the average UK house.
The London ratio now is:
£514k / £823 = 625
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And.. caution is still warranted in proclaiming an end to the bear market until we have confirmation in the other precious metals - so far it is only gold that has passed it's Oct high.
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Great trade, on that, DrB.
And I feel that you may be right on the intermediate peak, with gold needing to regroup while stocks get a relief rally.
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A great article on the ways to invest in Oil:
(hint: avoid USO - had I know this, I would have shorted the f**ker a year ago). Amazing that anyone would use monthly rolling ETFs when you have to make 5-10% a month just to break even.
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IMO these 5% daily swings indicate a clear long term turning point. The market is only this volatile at the point of maximum fear/greed.
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Effect of low oil price on BP:
http://www.bbc.co.uk/news/business-35469380
"Underlying fourth-quarter profits fell to $196m, compared with $2.2bn for the same period in the previous year."
"In the final three months of 2014, the cost of a barrel of Brent crude was $77. In the final three months of 2015, it was $44."
****
So with oil currently in the low-30s, you have to think that this operation is losing money, and if that is true for BP it is true for everyone.
Clearly unsustainably low prices, and supply side changes are happening.
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The rubber band has been stretched so far that the snap-back will be violent, but whether it can reclaim $40, $50 or more is very much unknown. Personally I would just like it to get back to break-even lol, and I only started buying in November.. imagine if you were buying back when the price was much higher :-o
The supply/demand is actually not that out of whack, and future supply is now severely compromised.
People pulling downside targets out of thin air "$20", "$10" as you say is the sign of the herd running off the cliff. If you can ignore the daily fluctuations, which is difficult admittedly, it's a great time to buy - Oil has NEVER been this cheap compared to many other assets. There will be small (and large) fortunes made riding the next bull market up, and I fully intend to be in amongst them.
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Oil trying to reclaim $30. Seems a bit churlish to try picking a bottom, but you have to wonder if we have just seen it? Wildly violent swings are often the sign of exhaustion and can mark long term bottoms.
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GBP 1.95 mn to 2.5 million would still be a good profit for that original buyer.
Maybe the market will deliver to him a loss, since he seems to be just "chasing the market lower" with an unrealistic offer price.
I have seen many people behave like that over the years
Minus transaction costs, of course.. which would be considerable these days with the new 10% and 12% marginal bands, although I don't think they were in place when the original purchase was made.
There is no way the seller would be able to pull that sort of flipping trick today.. if they manage to pull it off at all
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Prime London popping:
"LONDON—In August 2014, when the housing market here was on a tear, a two-bedroom condominium in one of the most expensive neighborhoods went up for sale at £3.25 million ($4.64 million), a 67% premium to its purchase price six months earlier. (GBP 1.95mn?)
The redbrick home on Cadogan Gardens in Knightsbridge is still unsold, and expectations have been revised. The price has been cut three times, the latest at the start of this year, to £2.5 million.
In London’s priciest neighborhoods, the housing boom is over."
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Into the $26's. Practically giving the stuff away. Not being funny, but there can't be anyone who can pump it this cheaply?
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So if you are looking for classic contrarian signs of a bottom by the popular press here's Leo's attempt:
Reminds me of one supermodel saying she "didn't get out of bed for dollars right at the bottom of the last USD bear market."
edit: quick search, here it is:
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Just as $100+ oil led to massive overinvestment and an oil glut, so $30 is leading to underinvestment and a future shortage.
http://oilprice.com/Energy/Crude-Oil/27-Billion-Barrels-Worth-Of-Oil-Projects-Now-Cancelled.html
"The world is oversupplied right now, by some 1 mb/d. But the industry is shelving nearly 3 mb/d in future output because of conditions today."
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Buffett is doubling down on Oil:
http://oilprice.com/Energy/Oil-Prices/Does-Buffett-See-A-Bottom-In-Oil-Prices.html
meanwhile the oil:gold ratio is now stretch to historic extremes:
http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart
OIL PRICES: could stay down thru 2016-19
in Gold, FX, Stocks / Diaries & Blogs
Posted
So whisper it quietly, but oil's doing rather well lately, isn't it? Gained $10 since this. Could have called the bottom to the very day.
Now have the rather thorny problem of finding a re-entry point.
Just completed a W bottom - all the momentum trading systems will be picking up on this.