The bears den

[SBC]

Mkt dive is not deep enough today.

 

[revhappy]

Oil prices are already falling with buildup in US crude oil inventory and demand slowdown. Now Abe went to Iran to help remove US sanctions. Imagine if Trump suddenly announces he is going have a deal talks with Iran, oil is going to crash. Another catalyst to kill this greatest economy ever.

 

[Dividends Warrior]

Oil prices are already falling with buildup in US crude oil inventory and demand slowdown. Now Abe went to Iran to help remove US sanctions. Imagine if Trump suddenly announces he is going have a deal talks with Iran, oil is going to crash. Another catalyst to kill this greatest economy ever.

A repeat of 2016 oil crisis?

 

[Mecisteus]

A repeat of 2016 oil crisis?

Hopefully can buy oil ETF at 2016 low. I missed that time.

 

[BBCWatcher]

Oil prices are already falling with buildup in US crude oil inventory and demand slowdown. Now Abe went to Iran to help remove US sanctions. Imagine if Trump suddenly announces he is going have a deal talks with Iran, oil is going to crash. Another catalyst to kill this greatest economy ever.

Let’s suppose oil prices decline for whatever reasons. Why do you think that would be U.S. recessionary? U.S. direct and indirect consumers of oil very much appreciate lower oil (and gas) prices. That includes, as examples, almost everybody heating homes/businesses/schools, practically the entire transportation sector, electricity generators and consumers, plastics and fertilizer producers and consumers...and I’m barely scratching the surface.

Our planet doesn’t need cheaper oil, but the U.S. economy tends to be expansionary with negative oil price shocks, not recessionary.

Yes, the U.S. is the world’s largest oil producer (~18% of global supply), but it’s also the world’s largest oil consumer (~20% of global demand).

 

[DukeCS33]

Oil prices are already falling with buildup in US crude oil inventory and demand slowdown. Now Abe went to Iran to help remove US sanctions. Imagine if Trump suddenly announces he is going have a deal talks with Iran, oil is going to crash. Another catalyst to kill this greatest economy ever.

Oil price coming off should spur the stock market higher... higher oil prices act as a tax and lower oil prices lower inflation... recall that when oil prices crashed from 100 to 50 per barrel, central banks across the globe cut interest rates in reaction... this should be good for equities.

 

[DukeCS33]

For the bullish scenario to play out, you need everything to go well.
No escalation in trade war
No real war
No global slowdown
No end of cycle
Trump doesnt do something crazy
No leveraged loans blowup
etc
etc


For the bearish scenario to play out, you need just one accident somewhere. One thing to blowup somewhere.

Every year that we add to this expansion, the probability of a blowup increases. Market thinks Fed can cut rates at will and extend the expansion, without placing any chance that it has some side effects somewhere, which we cannot see now.

So bulls looking at rear view mirror and saying how awesome it has been, forget this, that the odds are getting extremely tilted towards the bearish scenario as time passes.

Spoken like a true bear.

The bull would think otherwise... and their base case would be that no news means no catalyst for any sell off and therefore, given flush liquidity, the stock market should just by default, rise. And by the same token, for the bearish scenario to play out, there needs to be a shock to the system by way of a trade war.... but that does not mean that Fed would sit idly and not cut rates to spur the economy.

That said, I belong to the camp which views a non resolution of trade issues. My only concern with being too bearish is that I think the Fed may cut rates if the economy slows down... there would be a lag though so I think the stock market would sell off before finding support from possible interest rate cuts.

 

[Trader11]

Spoken like a true bear.

The bull would think otherwise... and their base case would be that no news means no catalyst for any sell off and therefore, given flush liquidity, the stock market should just by default, rise. And by the same token, for the bearish scenario to play out, there needs to be a shock to the system by way of a trade war.... but that does not mean that Fed would sit idly and not cut rates to spur the economy.

That said, I belong to the camp which views a non resolution of trade issues. My only concern with being too bearish is that I think the Fed may cut rates if the economy slows down... there would be a lag though so I think the stock market would sell off before finding support from possible interest rate cuts.

Indeed the result of reading too much zero hedge......

One reason for bull:
Monetary Policy 3.0 is coming
New markets development to create new growth
Trump is leaving in 2022

 

[revhappy]

Oil price coming off should spur the stock market higher... higher oil prices act as a tax and lower oil prices lower inflation... recall that when oil prices crashed from 100 to 50 per barrel, central banks across the globe cut interest rates in reaction... this should be good for equities.

US oil at 50-60 should be goldilocks where both US consumers benefit from low oil prices and producers can remain in the black as zombies for longer.

But US oil falling below 40, can be catastrophic for US shale producers with lot of junk debt.

So, too much low oil prices is not good either.

 

[revhappy]

Let’s suppose oil prices decline for whatever reasons. Why do you think that would be U.S. recessionary? U.S. direct and indirect consumers of oil very much appreciate lower oil (and gas) prices. That includes, as examples, almost everybody heating homes/businesses/schools, practically the entire transportation sector, electricity generators and consumers, plastics and fertilizer producers and consumers...and I’m barely scratching the surface.

Our planet doesn’t need cheaper oil, but the U.S. economy tends to be expansionary with negative oil price shocks, not recessionary.

Yes, the U.S. is the world’s largest oil producer (~18% of global supply), but it’s also the world’s largest oil consumer (~20% of global demand).

There is a diference between cheap oil and oil prices below the cost of production. Read; junk bond market blowup.

https://www.wsj.com/articles/oils-f...ompting-fresh-debt-market-concerns-1543838401

In a recent report, research firm CreditSights identified five oil-and-gas producers that would flip from being cash-flow positive to cash-flow negative in 2019 if oil prices average $50 a barrel rather than its prior assumption of $65 a barrel. Others, such as Sanchez Energy Corp. and EP Energy Corp., which would burn cash even with oil at $65, could be in a more difficult position.

 

[DukeCS33]

US oil at 50-60 should be goldilocks where both US consumers benefit from low oil prices and producers can remain in the black as zombies for longer.

But US oil falling below 40, can be catastrophic for US shale producers with lot of junk debt.

So, too much low oil prices is not good either.

That's only one segment of the market. Maybe the oil and gas companies would tank but other sectors may well flourish. Transportation would gain. And if it results in lower interest rates, the stock market may well receive a boost.

 

[peacefulday]

Stock picked BP, and that was how I accumulated more share dividends that time

Hopefully can buy oil ETF at 2016 low. I missed that time.

 

[Shortthemkt]

Anyone of u caught the 10pts drop in the last 30mins?

 

[Shortthemkt]

Mkt dive is not deep enough today.

If u swing ur shorts, there ain't much to squeeze. The same cant be said for intraday shorts.

 

[DukeCS33]

Over the past few sessions, the SP drifted lower on the back of low volume. This is increasingly looking like a correction rather than a sell off per say. In terms of trading strategies, it would be difficult to trade swing given the choppiness and a lack of a dominant trend. Some stocks may have a nice trend and it is possible to ride those. The majority of stocks tend towards settling into some range. The attached link shows that stocks within the SP500 trading above vs below their 50 Moving average to be almost even and guess that's why trend following strategies may not work as well in this environment. Guess its back to intraday trading.

https://www.barchart.com/stocks/market-performance

For those who are curious about my intraday trades, I would normally identify stocks that gap up or down at open and trade those that align itself to the broader market direction. Typically, waiting for retracements or breakouts. Trading in the direction of the gap and broader market takes a bit of guesswork out of the stock's direction and gives me added confidence. During days where the direction is not too clear, I would sit out unless my screeners present a compelling technical formation. When market direction is not too clear, I would take smaller size trades. And that is my risk management.

 

[coolhead]

Over the past few sessions, the SP drifted lower on the back of low volume. This is increasingly looking like a correction rather than a sell off per say. In terms of trading strategies, it would be difficult to trade swing given the choppiness and a lack of a dominant trend. Some stocks may have a nice trend and it is possible to ride those. The majority of stocks tend towards settling into some range. The attached link shows that stocks within the SP500 trading above vs below their 50 Moving average to be almost even and guess that's why trend following strategies may not work as well in this environment. Guess its back to intraday trading.

https://www.barchart.com/stocks/market-performance

For those who are curious about my intraday trades, I would normally identify stocks that gap up or down at open and trade those that align itself to the broader market direction. Typically, waiting for retracements or breakouts. Trading in the direction of the gap and broader market takes a bit of guesswork out of the stock's direction and gives me added confidence. During days where the direction is not too clear, I would sit out unless my screeners present a compelling technical formation. When market direction is not too clear, I would take smaller size trades. And that is my risk management.

Yeh I find it hard to take a position. This is even tighter than a rangebound scenario. Somehow the media don't have new stories...

Sent from HMD Global TA-1004 using GAGT

 

[DukeCS33]

Yeh I find it hard to take a position. This is even tighter than a rangebound scenario. Somehow the media don't have new stories...

Sent from HMD Global TA-1004 using GAGT

Yeah I started day trading when the straight forward upward trend in the markets came to an end. I find myself gravitating more towards day trading or should I say night trading since the Us markets start at 9.30pm.

Last night was very quiet for me as well and I stopped watching from 10.30pm as I observed many stocks just chopping in a tight range while those that ran, also settling down after initial bursts.

 

[churnmaster]

Hopefully can buy oil ETF at 2016 low. I missed that time.

Don't buy oil ETF if WTI goes into contango (i.e. prices further out higher than the front month). The negative roll will eat into your returns.

An alternative to the ETF would be mini Brent contract listed on ICE Singapore. At US$60 per barrel for Brent, the notional value per lot is only US$ 6000.

 

[churnmaster]

Oil prices are already falling with buildup in US crude oil inventory and demand slowdown. Now Abe went to Iran to help remove US sanctions. Imagine if Trump suddenly announces he is going have a deal talks with Iran, oil is going to crash. Another catalyst to kill this greatest economy ever.

Low oil prices are good for the global economy. You have more consumers than producers. Sustained high oil prices can cause recession but not low oil prices. Oil prices have a cascading (multiplier) effect on other goods and services, leading to cost push inflation (the type we saw during 2011-2014 period) resulting in margin squeeze for many businesses.

 

[churnmaster]

Spoken like a true bear.

The bull would think otherwise... and their base case would be that no news means no catalyst for any sell off and therefore, given flush liquidity, the stock market should just by default, rise. And by the same token, for the bearish scenario to play out, there needs to be a shock to the system by way of a trade war.... but that does not mean that Fed would sit idly and not cut rates to spur the economy.

That said, I belong to the camp which views a non resolution of trade issues. My only concern with being too bearish is that I think the Fed may cut rates if the economy slows down... there would be a lag though so I think the stock market would sell off before finding support from possible interest rate cuts.

Exactly .... even I have a bearish view and I think we'll see a sideways market for a prolonged period with ample liquidity, low interest rate and relatively low oil prices. But for some reason if oil rallies to 150-200 level, then we'll get a market crash. I hope it doesn't happen.