S&P 500
2117.69
+4.76 +0.22%
Dow Indu
18080.14
+21.45 +0.12%
Nasdaq
5092.04
+35.98 +0.71%
Crude Oil
57.22
+0.07 +0.12%
Gold
1180.33
+0.86 +0.07%
Euro
1.087005
-0.000450 -0.04%
US Dollar
96.914
+0.055 +0.07%
Strong

Is Gold Foretelling An Impending Greek Disaster?

Today is the first day of spring and maybe this is the cause for the spring in the markets. March 20th also happens to be "International Happiness Day" and I'm sure that many investors have a smile on their face today with the way the markets are acting in Europe, Asia and the U.S.

Today, I'll be looking at gold prices because they are acting and doing something that they haven't done in a long time and I want to share that with you in today's video. It is impossible to pinpoint what is causing gold to rally, whether it is short covering or the potential that Greece is going to implode any day now. Either way, it's not important what is causing the rally. The important thing to remember when trading is to get the direction right and not worry about what is causing the trend. I remember when I was in the trading pits in Chicago, I asked someone why the market was going up and he said to me, "It doesn't matter, it's going up". There is a lot of truth in that comment. That's one of the big takeaways in trading, don't over think markets.

As I write this commentary before the market opens, we could be seeing the equity markets close well towards the end of the day and possibly closing in new high ground on short equities before the weekend. The NASDAQ is very close to breaching the 5000 level, a close over that area today can be viewed as being very positive for the weekend.

Crude oil also appears to be finding some support at lower levels but has not yet reversed trend and turned around. I will be looking at that market to see where the key points are for a trend reversal to the upside. Remember markets can get very crowded on one side of the ledger when everybody believes that the trend will continue and go on forever. When that happens, a market tends to reverse and go the other way. The reason that happens is because markets are forward-looking trading instruments.

I will be getting into the recent Trade Triangle scan today to find new trades that may be just emerging. You won't want to miss that part of today's video.

This being Friday, I will of course, be looking for weekend trades using our "52-week highs on a Friday" strategy.

Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

How to Make Money in the Chaos of Oil and Gas

The Energy Report: Stephane, do you think the oil price has hit bottom and is now recovering?

Stephane Foucaud: When the Brent oil price was close to $50/barrel ($50/bbl), I think it was the bottom. It has recovered quite a bit. There is a risk that it might dip again, but I don't think we will reach the low $50s for quite some time. The reason I think there is a risk that the oil price could dip is that there has been an overreaction to the North American rig fleet reports, and particularly to what appears to be a large number of rigs being taken out of the market. Those rigs are, however, associated with lower-producing areas. Therefore, I think it's more sentiment than reality in terms of impact on the supply. The recovery has been too steep.

TER: What prices are you forecasting for 2015 and 2016?

[Read more...]

Article source: http://feedproxy.google.com/~r/theenergyreport/caoK/~3/yMw_yYAi6co/16542

Gold And The King: The True Story Of Opposites

Aibek Burabayev - INO.com Contributor - Metals


Dear INO.com Readers,

Recently, I have heard a lot of arguments about the correlation between major financial instruments and I decided to make special report for you to give some idea about their actual relationships.

For today’s analysis, I chose Gold, WTI Crude Oil ("black gold") and the Prime Currency’s DXY Index (King). I would guess all of you track these instruments from time to time to check the precision of your financial "compass." Most important here is to find out how sensitive Gold price is to fluctuations in Oil and Dollar value. To check that, let’s get down to our comparative historical dynamics charts depicted in different time periods.

Quarter Century Comparative Dynamics

Quarter century comparative dynamics chart

The 90’s look flat compared to the wild present day, only Oil managed to make a huge 80% spike in 1990, rising from the $20 level up to the $40 area. During those years, Gold and the Dollar index showed good and quite constant negative correlation, making opposite curves and charting ellipses. It worked nicely up until the crisis 2008 year, both instruments, by turns, had been changing sides and keeping an accurate inverse relationship. Oil is less predictable, first it was between Gold and the Dollar index correlation, but still positive with Gold and negative with the Dollar index, then in 1996 and in 1999-2001, it was in direct relationship with the Dollar index, but the rest of the time Oil reverted back to its normal inverse relationship. Bipolar might be the right definition for Oil.

The overall picture only looks stable for the Dollar index, which can be portrayed with the following expression, "Never shall those born to crawl, learn to fly." If we mention the instrument’s dynamics, which stayed in the range between -24/+33%, showing mirror reflections. 25-year dynamics indicate that the Dollar is quite stable with only above 1% gain, meaning that major currencies in total kept about their parity to the Dollar.

It’s quite an interesting discovery because as we see on the chart both hard "tangible" assets (I stress the word "tangible") gained weight significantly from 2 fold for Oil to 3 fold for Gold against the USD, with even more impressive peaks on the way. Another interesting note is that Gold and Oil have higher upside margins: 519% for Oil and 340% for Gold and comparatively small downside negative extremes: -54% for Oil and -42% for Gold, which means that asset inflation or actual revaluation tendency dominates. Fiat money lost its value to hard assets in triple digit percent numbers. That’s it with the sad but true part.

Post Crisis Comparative Dynamics

Post crisis comparative dynamics chart

As seen on the weekly chart above, Oil is a very tricky instrument. In 2008, just in one year it hit both margins: upside at +60% and then downside at -60% when the crisis emerged, moving an unthinkable 120% in between. From 2009 up to the middle of 2011, the Fed’s Quantitative Easing started a robust uptrend and positive correlation between Gold and Oil. In the meantime, the Dollar index had been behaving in its normal inverse relation, but only in 2009. In 2010, due to European debt crisis, half a year it had been moving in an uptrend with abnormal positive correlation with Gold and Oil. After that, the Dollar index returned to its usual role, being opposite to commodities.

I want to you to focus on the period between spring and autumn of 2011, when Gold’s bubble hit a historic record above $1900/oz, but Oil on the contrary, plummeted from a $114 high to a $77 low on weak economic data and deepening European crisis. It’s interesting to watch how the same fundamental reasons caused two different reactions. Feared investors put their money into Gold and at the same time they ran off the Oil. For me, it means that Gold’s safe haven function is mostly in a "sleeping mode" when both Gold and Oil just track the opposite direction from the Dollar index, although with different velocity. But when the world needs a hedge, Gold starts to be in high demand, seeking price’s ceiling and then all other tangible assets just dim.

Present Day Comparative Dynamics

Present day comparative dynamics chart

The above daily chart is last and represents the current situation in relationships between the three instruments. Briefly saying, Oil and the Dollar index have an almost ideal inverse relationship between each other compared to the sudden abruptions appearing with Gold. Abnormal correlations between Gold and Oil are highlighted in dark grey rhombuses, for one year one can count five distinct periods where these soil treasures move opposite directions.

As for the Gold and Dollar index correlation, we can see a good inverse relationship with several disconnections. Only in last November (highlighted in red ascending lines), Gold started to be in direct relationship with the Dollar index, with some deviations in Gold behavior when both instruments have been gaining value. Recent days' moves in Gold and the Dollar index are even more similar, highlighted in blue ellipses.

Bottom Line

Most of the time, Gold moves together with Crude oil, but opposite to the Dollar index. Still, history shows that we can’t rule out sudden abruptions in relationships where most often Gold and less often the Dollar index are the world’s safe haven assets, nowadays, due to currency wars.

Oil is the most Dollar index sensitive asset here and is utmost vulnerable amid fear, weak fundamentals and growing supply.

After all, you should be flexible with your approach as nowadays the world is changing so fast.

Lucky and Intelligent Trades!

Aibek Burabayev
INO.com Contributor, Metals

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Is It Time To Take Profits On Oil Refining Stocks?

Adam Feik - INO.com Contributor - Energies


Does it sound strange to even think about "taking profits" on anything related to energy?

Well, oil refining companies' stocks have enjoyed quite a run this year. Check out this table summarizing recent returns for 5 selected stocks (total returns through 2/20/15, from Morningstar; returns longer than 1 year are annualized; "since Jan. 15" data from Yahoo! Finance):

If you haven't paid attention to this group, how surprised are you to see a group of oil-related stocks with positive returns over the past 12 months – let alone Tesoro's +82% performance?!!

I've also included the 3-, 5-, 10, and 15-year returns, just because they're so remarkable.

Oil down, refiners up!

Of course, the driving reason for this group's stellar 1-year returns is that oil refiners actually benefit from being able to pay lower prices for crude oil, which is the primary raw material used to make their refined products, such as gasoline. [Read more...]

Greece, Nazis And 3 Strong Sectors

It's hard for me to believe that the newly installed Greek government is now calling for Germany to make reparations of some $250 billion because of what the Nazis did 75 years ago to Greece. Such is the world we live in.

Make no mistake about it, Greece is the Achilles' heel of the euro and just this morning Alan Greenspan, former head of the U.S. Fed, came out and indicated that it was just a matter of time before Greece exits the euro. I couldn't agree more with him, Greece is just an accident waiting to happen.

Unlike the United States, which is one nation with one currency and laws, the euro has been cobbled together with a number of countries that have nothing in common with each other. They don't speak the language, they don't have the same customs and traditions, and they certainly don't share the same discipline for work. [Read more...]

4 Reasons Oil Could Drop Further

 

Right around the time analysts gave up trying to predict the bottom for oil prices, the all-important commodity mounted a strong comeback.

In fact, oil's recent reversal is leading to predictions that the commodity has finally bottomed and is poised for a "V-shaped recovery," which means it could rise so fast that its price chart forms the letter V.

What's more, many asset managers have started to say it's safe to go back into oil stocks and, in some cases, are forecasting such stocks will be 2015's best investments.

Those are bold claims, and they could be right. But I doubt it.

Simply put, the fundamentals behind the bear market in oil haven't changed much: there are still too many factors that could weigh on oil prices in coming months. Indeed, there are at least four reasons why it's probably far too soon to call a bottom in oil and why prices could still set new lows before heading consistently higher. [Read more...]

Article source: http://www.streetauthority.com/node/30507162

A Presidential Order That Could Save Energy Drillers

By: Joseph Hogue of Street Authority

In his six years in office, President Obama has stressed his support for strict environmental regulation. He has expanded powers for the Environmental Protection Agency and has repeatedly deferred approval for the Keystone XL Pipeline System.

One key stat: The number of oil and gas leases approved during the first three years fell by more than 40%, compared to the final three years of President Bush’s administration. Drilling permit approvals on federal lands fell by a similar amount.

In addition to the regulatory headwind, falling oil prices are also impeding drilling permit activity. Against this one-two punch, some analysts are questioning the emergent theme of U.S. energy independence and shale production.

But is an unlikely supporter about to throw the sector a lifeline? [Read more...]

Article source: http://www.streetauthority.com/node/30504653

How To Manage A Natural Resources Fund When You're Bearish On Natural Resources

Adam Feik - INO.com Contributor - Energies


I wrote a couple weeks ago about whether we're seeing the end of the oil supercycle. In my article, I heavily referenced a money management firm (WHV Investments) that has been bullish on energy investments since predicting a “supercycle” in 2000 (great call at the time!). Despite the massive turmoil since last June, WHV continues to be bullish.

An oil-bullish money manager

To get a flavor for stocks owned by a manager who is bullish on the continuation of the energy supercycle, check out this partial list of WHVIX's stock holdings. Granted, the holdings data are a few weeks old, but WHV tends to have very low turnover and says it’s sticking with its thesis. WHV management believes we’re still in the oil supercycle; accordingly, WHVIX owns stocks like these (as of 12/31/2014, source: WHV.com; this list represents selected stocks rather than a complete Top 10 list):

WHVIX Natural Resources Stock List

* “Bullish signal” refers to whether MarketClub is displaying “green triangles” for both the intermediate - and long-term outlook.

Of the above holdings, WHVIX appears to have (during 4Q 2014) increased its exposure to Suncor, which derives a large plurality of its business from “downstream” refining and marketing activities. Additionally, Suncor has significant development efforts in Canada’s Athabasca oil sands. [Read more...]

Want to Avoid Oil's Gloom? Turn to the Sun, Says Outsider Nick Hodge

The Energy Report: You call yourself an "outsider," and have founded an investment club of that name. In what sense are you an outsider?

Nick Hodge: Being an outsider stems from my upbringing. Both my parents were middle to lower middle class, and I never had anything given to me. I've always had to work for what I have, starting with a lawn-service business when I was 12 and working my way through college as a butcher. I look at the "mainstream" with a skeptical eye. I'm a contrarian. I'm not on the inside of big business, big banking and politics, and don't want to be.

The Outsider Club has been around for about a year now. I founded it after writing for several newsletters over the past decade about energy and speculative investments.

TER: What does being an outsider mean with regard to your views on energy?

NH: I'll give two examples. First is my belief in the peak oil theory. Second is my early adoption of a belief in renewable technologies, such as solar and smart-grid technologies.

TER: It would be safe to say you're not an admirer of our financial elite? [Read more...]

Article source: http://feedproxy.google.com/~r/theenergyreport/caoK/~3/7eO8E2RMolM/16476

What's Ahead In 2015?

Here we are, the first day of 2015, thinking about what's ahead this year. There's no doubt about it, 2014 was a good year for most stock investors and we hope you got your share of the pie.

The big standouts to me in 2014 were the mega drop in oil prices and the fact that gold prices have lost two years in a row. The last time that happened was in 1997 – so what's ahead in 2015?

I think that 2015 will offer some amazing opportunities for smart, knowledgeable investors. The key to trading this year is to go with the flow and don't fight the market. I don't know of any market expert who, in January of last year, forecast a 40% drop in oil prices. I'm not sure I heard anyone predicting that gold prices were going to have back-to-back losses two years in a row.

What does that tell you?

The investors or gurus who hold fixed beliefs and feel compelled to defend their market opinions are doomed. Investors who hold rigid market opinions in 2015 are not going to fair well and enjoy positive returns. That's just my opinion, and I reserve the right to change it at any time.

Here is another timeless piece of advice for 2015: [Read more...]

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