The New Bull Market

[ducati916]

Variables driving the Bull market:

Always worth keeping an eye on this metric. It is not a 'day trade' type of metric, but when you see it in the news, you know that it has built to egregious levels and there could be trouble ahead.

*Much more balanced advance today:

jog on
duc

 

[ducati916]

Missed out on the AMZN Options.
Added a position in GE.

This is a stock that has been hammered (probably for good reason, woeful fundamentals over last few years) and might now be poised for a bit of a turnaround. I'll work through the fundamentals bit-by-bit (slow process) and see how it looks going forward.

Feel free to jump in with what is horrible about the stock. Rather than start a 'fundies' thread, this can just jog along side the ETFs and general market commentary.

jog on
duc

 

[over9k]

GE has an absolute mountain of debt. I was looking at this back in may when I bought boeing. It's going to have a long, hard slog to get back to where it used to be and with aviation and therefore jet engines, its golden goose, being in the gurgler and never going to recover, it's really up against things. I bailed on both when boeing was $190 and I haven't rebought.

IIRC it bottomed out at $5.50. I think I'd want it to be somewhere down near that again before I pulled the trigger.

The seasonality of winter is only going to pinch it even harder IMO. I think your previous post about air travel etc is jumping the gun a bit. Aside from some xmas stuff, air travel's not going to really pick up for bloody ages.

Industrials are just going to be in the tank for the foreseeable future. Most of it (like new cars) are premium goods (in the economics jargon sense of the word) - not stuff bought when money is tight.

Adding more weight to this thesis, I saw on the news a few days ago that there's actually been a record number of SECOND HAND cars changing hands this year, which is exactly what you'd expect when belts have to be tightened.

If you want to go this way, I'd be taking a look at what bounces when infrastructure is built. Governments have, since time began, always, always, ALWAYS gone on big infrastructure spends whenever times have gotten tough. Caterpillar comes to mind and I know that bounced when trump announced his big infrastructure bill. There's undoubtedly going to be more.

 

[ducati916]

GE has an absolute mountain of debt. I was looking at this back in may when I bought boeing. It's going to have a long, hard slog to get back to where it used to be and with aviation and therefore jet engines, its golden goose, being in the gurgler and never going to recover, it's really up against things. I bailed on both when boeing was $190 and I haven't rebought.

IIRC it bottomed out at $5.50. I think I'd want it to be somewhere down near that again before I pulled the trigger.

The seasonality of winter is only going to pinch it even harder IMO. I think your previous post about air travel etc is jumping the gun a bit. Aside from some xmas stuff, air travel's not going to really pick up for bloody ages.

Industrials are just going to be in the tank for the foreseeable future. Most of it (like new cars) are premium goods (in the economics jargon sense of the word) - not stuff bought when money is tight.

This story initially caught my interest.

Which got me interested. I'll run the financials gradually over time and see how it looks. I'm assuming (always dangerous) that if someone invests a significant amount of money, they have done some homework and see value somewhere. We'll see.

Technically, it looks as if it is ready to move higher anyway.

jog on
duc

 

[over9k]

Two days in a row overwhelmingly into the green you say?

And because of robinhood, it's not QQQ everyone are going for, oh no:

 

[ducati916]

So the updated VIX chart:

Extended the original and added the new branch. We are approaching that support area and have had a real fall off in Vol. That opens the question (a) Vol falls through support or (b) we get a bounce at support.

And M1

See the little blue circle top right?

The answer will lie (with a best guess estimate) with an analysis of other market internals which update at market close.


Oil Patch News:

Oil prices jumped on Tuesday morning as Hurricane Sally forced outages in the Gulf Coast, but the overall market sentiment remains bearish compared to prior months. Both the IEA and OPEC released their monthly reports, and both struck a more pessimistic tone, downgrading oil demand.

IEA: Sentiment is weakening. In its latest Oil Market Report, the IEA struck a bearish tone, saying its outlook is more “fragile” than last month. The agency noted that the pandemic is showing no signs of abating, falling in some places but rising in others. Notably, demand in India fell month-on-month. The agency cut its demand forecast by 300,000 bpd for this year and by 0.6 mb/d for 2021. The IEA sees inventories drawing at a rate of 3.4 mb/d for the second half of 2020, a substantial draw but 1 mb/d narrower than previously estimated.

BP warns of peak demand. BP (NYSE: BP) became the first oil major to declare that the world has past peak oil demand. The company’s most bullish scenario has demand “broadly flat” for the next two decades. In more bearish scenarios, BP sees demand collapsing by 50 percent or 80 percent by 2050.

Citi: $60 oil in 2021. Oil prices are set to rise to $60 a barrel by the end of next year as the oversupply will have been drawn down by then, according to Citigroup, which is bullish on oil.

Analysis: No shale growth until end-2021. U.S. shale may not grow until the end of 2021, according to a prediction from Trafigura, one of the world’s largest oil traders. “It's not dead – it’s just on an enforced sabbatical,” Ben Luckock, Trafigura’s co-head of oil trading, said at an industry conference.

OPEC cuts demand forecast. In its latest monthly report, OPEC cut its demand forecast for 2020 by 400,000 bpd and by 770,000 bpd for 2021. The group also sees non-OPEC supply growing by more than previously expected. “Further downside risk and higher uncertainty in the economic outlook exist for the near term, as India's economy may not be through the worst of the situation yet,” OPEC said. “With this in mind, it is likely that fiscal stimulus will require a large boost.”

Louisiana refineries, platforms, and ports shut for hurricane. Hurricane Sally is set to make landfall along the Gulf Coast, forcing the energy industry to evacuate staff and shutter facilities. According to U.S. government data, as of Monday afternoon, 147 offshore production platforms were evacuated, or 22 percent of the total.

Trump admin favors ethanol, considers aid for refiners. President Trump vowed over the weekend to allow higher concentration ethanol (E15) to be sold with existing refueling infrastructure. That comes shortly after he instructed EPA to deny waivers to small refiners seeking exemptions from biofuels blending requirements. At the same time, Bloomberg reports that EPA is considering a plan to give cash aid to refiners affected by the decision.

U.S. shale production continues to decline. Crude oil production in the U.S. shale patch is set to decline by 68,000 bpd next month, with every play registering declines in output except the Permian, the Energy Information Administration said in its latest Drilling Productivity Report.

Secret recording shows oil executives concerned about flaring. The New York Times reported that a secret recording of a 2019 meeting of oil and gas industry executives revealed that while they were publicly saying that methane emissions were not a problem and therefore did not need to be regulated, privately they were concerned that rampant flaring was threatening their industry.

WoodMac: Half of oil industry cash flow negative. At $40 per barrel, the global oil industry, including both international and national oil companies, are struggling. “Around half of the 50 companies we cover are cash flow negative in 2020 and 2021 at today’s oil price,” Wood Mackenzie wrote in a note. The firm estimates that upstream spending will come in at about $310 billion this year, down by 30 percent from 2019 and down by 60 percent from the 2014 peak at $730 billion.

Mariner East 2 pipeline ordered new route. Pennsylvania officials have ordered Energy Transfer (NYSE: ET) to reroute a section of its $3 billion Mariner East 2 pipeline after an August spill outside of Philadelphia.

Libya’s Haftar commits to ending blockade. The Libyan National Army’s Khalifa Haftar has committed to ending a blockade of oil export terminals in the country. The potential return of over 1 mb/d of supply would weigh on crude prices.

Connecticut sues ExxonMobil. Connecticut filed a lawsuit on Monday against ExxonMobil (NYSE: XOM) for misleading the public over the impacts of climate change, the latest in a string of legal cases against the oil major.

Petrobras cuts CAPEX, focuses on pre-salt. Petrobras (NYSE: PBR) lowered its CAPEX guidance for the next four years to $40-$50 billion, down from $64 billion previously. More than 70 percent will go into pre-salt.

Renewable energy eats away at fossil fuels. Renewables have been the fastest-growing energy source in recent years and are expected to continue to be such in the coming decades. Last year, renewables accounted for 41 percent of the rise in energy demand, the largest of any energy source, BP Statistical Review of World Energy 2020 showed.

jog on
duc

 

[over9k]

I reckon we'll see the classic friday selloffs for a while now.

Reference oil: I'm trying to time a bet against it. Currently hold QCLN and no intention of getting rid of it, now just need to time a bet against oil. Starting to think the last month means I've missed the boat.

 

[over9k]

Stay-at-home plays continue to outperform:

Adobe & fedex both just reported earnings significantly above estimates, both have bounced 4% in after-hours trading. This should surprise absolutely nobody.

 

[ducati916]

So atm, the VIX has jumped 20%

Not sure atm what is driving this, I've only just got back in from work. On a macro basis everything looks calm. Obviously something is up. There is nothing in the news that would seem to potentially account for the jump. We have the Fed. meeting, but that has been pretty much settled for some time.

jog on
duc

 

[over9k]

Snowflake IPO I suspect.

I'll be buying.

 

[peter2]

The jump in the VIX (FinViz charts) is due to contract rollover. There are similar jumps about the same time in the prior months.

Perhaps some people think there may be a selloff late Sept/Oct. It's happened around this time of the year in the past.

 

[ducati916]

Snowflake etc:

Again, similar to the 1999 dotcom offerings.

Probably (interpreted as) a positive for most.

Market also waiting to hear from the Fed. The policy has been telegraphed ahead by the Fed. so I would not anticipate anything significantly different from that. Market should be ho-hum.

A little rotation. This will continue for some time yet. It is a quiet sort of process that just ticks along quietly largely unnoticed.

jog on
duc

 

[qldfrog]

Vix spike over it seems and should finish the session flat or down.Bull rolling on.

 

[over9k]

Everything previously well into the green fell off a cliff after powell's conference. Most sectors well into the green, powell gets up and says "interest rates staying at zero for years, we really need more stimulus from the government, we don't want to print any more cash" and everything just plummets. It closed at session lows.

But as if the fed isn't going to flush the system if things hit the proverbial again. We all know this is his attempt to put a rocket up congress. After-hours are already in the green.

Here's the whole thing in case anyone's bored enough to watch it:

But like I said, he just basically just said they're keeping interest rates at nothing and really want congress to act before they do again.

Edit: Here, timed almost to the minute:

Conference starts at 2.30, he opens with the good news so we get a little bounce, and then it's just a bloodbath from there.

You'll also note that, as I mentioned previously, after-hours are already positive. Today was nothing but a storm in a teacup over powell's comments. Ridiculous.

 

[ducati916]

Everything previously well into the green fell off a cliff after powell's conference. Most sectors well into the green, powell gets up and says "interest rates staying at zero for years, we really need more stimulus from the government, we don't want to print any more cash" and everything just plummets. It closed at session lows.

But as if the fed isn't going to flush the system if things hit the proverbial again. We all know this is his attempt to put a rocket up congress. After-hours are already in the green.

Here's the whole thing in case anyone's bored enough to watch it:

But like I said, he just basically just said they're keeping interest rates at nothing and really want congress to act before they do again.

Edit: Here, timed almost to the minute:

View attachment 109243

Conference starts at 2.30, he opens with the good news so we get a little bounce, and then it's just a bloodbath from there.

You'll also note that, as I mentioned previously, after-hours are already positive. Today was nothing but a storm in a teacup over powell's comments. Ridiculous.

Well not everything was down:

Energy, Financials and Industrials all had a good day. Which is just to say: rotation.

jog on
duc

 

[over9k]

One day does not a trend make. Like I said, things were looking very different until powell's comments.

 

[Dark1975]

Nasdaq futures look grim, possible continuation from last week, I noted the nasdaq last night started in the red, tho the new IPO snowflake helped pull the market out of the redzone, if we see a blood bath on the dow tonight pulled down by the nasdaq ,tomorrow on the xao looks like a possible downturn as a classic friday sellout, i will look to buy personally tomorrow afternoon as a great opportunity for a good flip for mon/ tuesday

 

[Chronos-Plutus]

Jolly Jay reckons rates will remain near zero for at least 3 years: " Gold inched higher after the Fed signalled rates would remain near zero for at least three years." (https://www.linkedin.com/pulse/gold...-UHP-Ew&fromEmail=fromEmail&ut=0pS_mi11H8-po1)

I say rates will remain near zero for at least 3 decades.

 

[over9k]

I was just coming to post something very similar: It's been a massacre since powell's conference and friday will selloff more no doubt.

I'm trimming a couple of positions at open today, plan on buying some snow & frog tomorrow.

 

[ducati916]

Rotation continues:

jog on
duc