I am of the opinion that if oil doesn't collapse to about 96 the global economy will crumble. For much of the rise of oil the price was ignored by the public up until last week's surge. Then the public has cut back driving to necessities around here and there is far less store activity and no large ticket sales. I agree with SteveZ1 this is a sort of parabolic flame off. I also regard Goldman's statement as a warning... sort of code to hedges that Goldman will be shorting the market.
Besides that, long markets are no longer responding well. They are low volume and weak. Rallies are met with hedge selling and small investor bailing. I think that is irrational but the point is that oil is affecting the markets and political policy is a disaster under obama. He is back to tax the rich themes so I suggest that all of these negative features have been ignored in the recent past but that has all changed now.
As for Gold and silver, I view these as speculations by dare I say it the nuts and unsophisticated investors who are chasing the nutty dollar. The fact that as I have said cab drivers and hairdressers are not talking up commodities and buying more strikes me as stupid money moving in mass.
I am relatively stoic when it comes to my big caps. When they go down the interest yield goes up and in secular bears, I have already moved into long term high div yield plays and been their in some cases for years.
Unlike cramer who says ignore taxes, I cannot see being taxed at income levels in my bracket. It simply destroyes the value of my trade. Besides having moved into large cap big div plays, I have the added advantage of reduction of income to 15% taxable status.
While I do believe that many small young investors don't invest but simply gamble, I believe that the more conservative money stuffed into bonds will tend to leave bonds and go into high cap yields NOT COMMODITY plays. My shorting of bonds has been well rewarded over time.
My oil short looks good to me. It is in the green. My silver short is slightly underwater but I gauge the difference by the amount of stupid v. smart money in at the parabolic flare.
My portfolio in total is conservative and defensive. One thing I am am certain of is that if oil doesn't make a hasty retreat we may double dip. I attribute these parabolic flares to margins, liquidity and ETFs. I think stupid money is tied up in gold, silver, oil and bonds. And that money divides down as stupid money in silver, gold and hedge money in oil, and scared money in bonds.
If you think about gold and silver... 99% of the trades are paper trades in an unregulated space. The people that buy some coins they don't really know the value of them but if you are collecting coins then you aren't worth much. Besides gold and silver do not make money apart from intrinsic appreciation so nobody can value them.
Oil on the other hand is very useful and valuable but it is not demand driven or supply driven. It is speculative hedge money on the order of 60 billion dollars. When the hedges let loose, blood pours into the street. Hedges are holding the global recovery hostage but they are not smart enough to know when to let go. Goldman is smart enough and they have said their peace.
With oil I will continue to short and increase my short over time. I am absolutely certain that high oil will destroy the economy. Many economies in the US operate at the retail vacation level. Florida winter trade was terrible and I think this will be the summer of scaled back vacations. As I have said, I am seeing the consumer starting to hold back significantly. Imports were way off in the last quarter meaning the consumer is fatigued. The American citizen is suffering also from Obama burnout. Republicans aren't helping with their list of rino retreads signing up for the republican nomination. Romney is particularly distressing to most republicans.
Of my short investments, Bonds are perfect. I am deep in the money and scared money isn't stupid money so they will slowly sell off. Also I like this because of Japan and the resistance to QEIII.
Oil is the economy killer. Every recession in history has been preceded by speculative high oil prices. So they can't last.
As for my stupid money shorts... as you can see from my discussions with the precious metal bugs, they are not even rational. So I would expect shorting gold or silver to be highly unpredictable. But it is an avalanche if you can catch them right. I think I am near a parabolic flare. Look at the video of the silver trader that I posted yesterday. Look at the sports jacket and the earring. These guys happen along with every recession. I will remark that this has been a very very long run for gold and silver but I attribute that to war policies under both bush and obama. Bush was a disaster for the economy and Obama even more toxic so I do not blame stupid money for trying to find something they think is stable in a political environment like this; my point is that the things they have gone into traditionally have been the roach motel type of investment. Speculators go in but they don't come out.
regards
doug
Besides that, long markets are no longer responding well. They are low volume and weak. Rallies are met with hedge selling and small investor bailing. I think that is irrational but the point is that oil is affecting the markets and political policy is a disaster under obama. He is back to tax the rich themes so I suggest that all of these negative features have been ignored in the recent past but that has all changed now.
As for Gold and silver, I view these as speculations by dare I say it the nuts and unsophisticated investors who are chasing the nutty dollar. The fact that as I have said cab drivers and hairdressers are not talking up commodities and buying more strikes me as stupid money moving in mass.
I am relatively stoic when it comes to my big caps. When they go down the interest yield goes up and in secular bears, I have already moved into long term high div yield plays and been their in some cases for years.
Unlike cramer who says ignore taxes, I cannot see being taxed at income levels in my bracket. It simply destroyes the value of my trade. Besides having moved into large cap big div plays, I have the added advantage of reduction of income to 15% taxable status.
While I do believe that many small young investors don't invest but simply gamble, I believe that the more conservative money stuffed into bonds will tend to leave bonds and go into high cap yields NOT COMMODITY plays. My shorting of bonds has been well rewarded over time.
My oil short looks good to me. It is in the green. My silver short is slightly underwater but I gauge the difference by the amount of stupid v. smart money in at the parabolic flare.
My portfolio in total is conservative and defensive. One thing I am am certain of is that if oil doesn't make a hasty retreat we may double dip. I attribute these parabolic flares to margins, liquidity and ETFs. I think stupid money is tied up in gold, silver, oil and bonds. And that money divides down as stupid money in silver, gold and hedge money in oil, and scared money in bonds.
If you think about gold and silver... 99% of the trades are paper trades in an unregulated space. The people that buy some coins they don't really know the value of them but if you are collecting coins then you aren't worth much. Besides gold and silver do not make money apart from intrinsic appreciation so nobody can value them.
Oil on the other hand is very useful and valuable but it is not demand driven or supply driven. It is speculative hedge money on the order of 60 billion dollars. When the hedges let loose, blood pours into the street. Hedges are holding the global recovery hostage but they are not smart enough to know when to let go. Goldman is smart enough and they have said their peace.
With oil I will continue to short and increase my short over time. I am absolutely certain that high oil will destroy the economy. Many economies in the US operate at the retail vacation level. Florida winter trade was terrible and I think this will be the summer of scaled back vacations. As I have said, I am seeing the consumer starting to hold back significantly. Imports were way off in the last quarter meaning the consumer is fatigued. The American citizen is suffering also from Obama burnout. Republicans aren't helping with their list of rino retreads signing up for the republican nomination. Romney is particularly distressing to most republicans.
Of my short investments, Bonds are perfect. I am deep in the money and scared money isn't stupid money so they will slowly sell off. Also I like this because of Japan and the resistance to QEIII.
Oil is the economy killer. Every recession in history has been preceded by speculative high oil prices. So they can't last.
As for my stupid money shorts... as you can see from my discussions with the precious metal bugs, they are not even rational. So I would expect shorting gold or silver to be highly unpredictable. But it is an avalanche if you can catch them right. I think I am near a parabolic flare. Look at the video of the silver trader that I posted yesterday. Look at the sports jacket and the earring. These guys happen along with every recession. I will remark that this has been a very very long run for gold and silver but I attribute that to war policies under both bush and obama. Bush was a disaster for the economy and Obama even more toxic so I do not blame stupid money for trying to find something they think is stable in a political environment like this; my point is that the things they have gone into traditionally have been the roach motel type of investment. Speculators go in but they don't come out.
regards
doug