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Showing posts from September, 2015

Envestor First Contributor

Hello audience,

Today, I am really excited to announce the addition of my contributions to the site Envestor First, a website dedicated to oil and gas intelligence and research. Their extensive data and in-depth articles are very informative for investors looking at stocks in the energy sector. From here on, most of my posts will be published on that site along with my own profile. As everything is getting updated, feel free to check out the website and my stuff (even though you can read everything there as well). A link to Envestor First will be posted on the right side of the website as well as a link to my profile when it is finished. This expansion is greatly appreciated, and I am ecstatic to have the chance to expand my audience. Check out my latest post on their website at http://envestorfirst.com/2015/09/29/all-of-opecs-eggs-in-one-basket-uwti-uco-cl_f/. My blog and social media accounts will not change so keep tuning in. In about 3 months, I have about 7,000 pageviews. The gro…

All of OPEC's Eggs in One Basket

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Stocks inch higher after a day of heavy losses hangs on the minds of investors worldwide. U.S. traders react to midday reports of high than expected consumer confidence levels. Up 1.9 points from August, the consumer confidence index reaches highs that haven't been approached since January despite the fact that YTD Dow and S&P movements have been -10.01% and -8.25% respectively. A gossamer sense of confidence comes amidst global worries of economic health where inflation and unemployment levels continue to grapple in an epic macroeconomic struggle. In the same report, the present situation index rose 5.3 points from last month marking an eight-year high with many Americans citing a preference for the current economic situation over the recent past. Perhaps it comes from a relief period following the drastic losses. Nevertheless, the expectations decline did show a decline of 0.6 points from last month, but other than a slightly lower prospect for growth, consumers seem unsure …

The Purse Strings Tightened

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After a weekend of tranquility from the stock trading scene, investors broke the bank on Monday to open another week defined by a monstrous bearish wave of sentiment. Dow futures opened once again predicting a loss with news of an Alcoa split and a giant energy merger to play out during trading hours. The Dow Jones Industrial Average broke into the 15,000's with a low around 15,981 and a close down -1.92% at 16,001. The Global Dow Index sits about -0.32% lower hinting that a lot of the damage was compartmentalized to the U.S. stock market. The S&P 500 fell -2.57% below the 1,900 level where the correction had established a support. The 50-day trend line breaks farther from the long-term 200-day trend as NASDAQ's trend line's finally complete the reversal signal called the "death cross." The technology indicator dragged down by a biotech slump is approaching a break-even performance for the year as its three-month losses amount to -8.36%. Falling with the mark…

Energy's Biggest Movers: Summit Midstream Partners LP (SMLP)

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Today, we are going to look at Friday's biggest mover in the energy sector. Summit Midstream Partners LP is an infrastructure based company that focuses on gathering, treating, and processing natural gas and crude oil. It has a key partnership with Energy Capital Partners which has been significantly hurt by the impending oil slump. As a result, the last three trading sessions have reported two days of extreme losses and a day of retracement. There may or may not be a big future move in this stock's price, but to find out more we should take a look at the chart. The first thing to notice is that a gradual bearish trend turned into a plunge very quickly and with heavy volume. The suddenness looks to be the result of a piece of news affecting sentiment or traders thought the need for a correction. Either way, bearish feelings have been circling like sharks around the price of SMLP even though the RSI indicator didn't show any overbought signals. In the period between the re…

Emerging Markets and Commodities

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The week after rate delays, markets continue their sideways movement through the end of Friday. The Dow Jones Industrial Average closes today with a 0.70% gain making the week total a -2.16% loss. Fluctuations today stayed within a range of 260 points similar to previous trading days throughout the week. The S&P 500 showed similarly dampened movements as it lost a small -0.05%  with its weekly change reported being -2.96%. The common volatility indicator VIX grew a little today after Janet Yellen extended her concerns for foreign and domestic growth.On a side note, the health sector bogged down the rest of the market as it saw significant losses after Hillary Clinton's comments concerning prescription price caps. Their -2.59% sector loss was significantly lower than the rest of the advancing industries. The energy sector remained directionless today as crude oil prices gained just below one percent on the New York Mercantile Exchange. A lot of analysts around the economics sph…

Facing the Bear in the Room

The markets came limping into this week after a prognosis informing investors that the monetary crutch loaned to the economy is still needed even 7 years after the financial crisis in 2008. Dow Futures this morning predicted a 200 point loss to the Dow Jones Industrial Average as systemic weakness continues to keep the stock market from approaching levels that created the bubble earlier this year. As Chinese data eases out of traders' worries replaced by an overall state of global melancholy. After a drop of -261.23 (-1.50%), the Dow Jones drops to an 11.4% from the apex of 2015 which was 18351.36 on May 19, 2015. The Global Dow shows the losses have an international scope with a -48.78 loss (-2.10%) trading 14.1% below its high on May 22, 2015. China's market grows almost 1.00% but also remains an astonishing 38.5% lower than its June high of 5,178.19. Why does global data really matter in the end? Another problem that the Fed cites as keeping inflation and growth limited is …

The Shrinking Herd

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The beginning of a new post-Federal Reserve meeting week was upon us, and stocks responded positively to the absence of interest rate hikes. The Dow Jones Industrial Average grew 0.77% and the S&P 500 showed similar small gains as it grew 0.46%. The VIX volatility index showed a -9.61% drop perhaps showing a reduction in bearish over the rickety markets, but there is no doubt investors have been trading over a down trend. Even with market gains and a major decline in the volatility index, I can't help but feel a grayish overtone fall upon the market. While the S&P 500 showed those gains, the volume level reached a monthly low which is half the amount of last week's close. Trading activity is most likely muted by the fact that the Federal Reserve saw enough of a poor outlook in the economy that they thought interest rate increases would hurt the economy. No one wants to be told they need a handicap for a game to be fair, and that's just what the economy was told. Wh…

Swing Low Sweet Interest Rates

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There are a lot of emotions that affect the market during financial events concerning a company or the overall economy. We have seen Q2 earnings reports slam energy stock prices as oil revenue dropped significantly. Weekly, production data from the Energy Information Administration throws support behind bears or bulls depending on a change of 100,000 barrels a day in either direction. Volatility can make the markets scary for investors especially when the effects are so real, but that only magnifies the issue as traders, learning from the past, react to the next event like that crowd did the last time. Ask anyone involved in the oil market, and they'll tell you the masters of this form of financial avarice, OPEC. The oil cartel constantly takes advantage of production quotas and Middle Eastern conflicts to win them higher revenues. The markets so far this week have been acting in the same way (although, the Fed doesn't have skin in the game nor attempts to manipulate prices li…

Interest Rate and Gas Prices

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The day inches closer as economists continue to mull over the possibility of the Federal Reserve raising interest rates. Bond traders provide small signals of the sentiment surrounding the decision as they drop the price of the 2-year Treasury security in anticipation of an abstention from increasing interest rates. But an increase is expected in the future with long-term Treasury bonds going up in prices. Commercial economic data came out today, but no data was convincing enough to ensure the future of interest rates. In the same manner, the markets gained today under the same projections of a continuation of low interest rates. This is expected to keep encouraging investment spending and push inflation from its low levels this year. The Dow Jones is up 1.08% with WTI price increasing $0.86 (+1.93%), showing positive movement on both investor sentiment and production cuts. Indices measuring the energy sector show some increases. The NYSE Arca Oil Index (XOI) gained just 0.80% and the…

Supply, Interest Rate Pressures

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The drum beat ends this week as Federal Reserve officials finally gather to discuss interest rate increases that seem all but inevitable now. All eyes are now fixated on Janet Yellen and the board of governors as sentiment remains fettered to sell-offs related to the tightening of monetary policy in the world's largest economy. Losses were not only present on the New York Stock Exchange but across the globe in Asian and European markets. As the Dow Jones Industrial Average lost a small -0.38% today, European equities markets followed suit with the Stoxx Euro 50 falling just over half a percentage point. Currently, the Japanese market trades up and China down, both reacting to Asian economic outlook that appears rough. The thought lingers, perhaps rate hikes are not meant to happen. But a Bloomberg article cites the advice of a Federal Reserve man in 2014, don't wait to raise rates, "the situation is never clear, just unclear in another way." Stanley Fischer's com…

The 2001 Tech Bubble and the 2015 Chinese Bubble

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In the last week of August, the investing world experienced a significant correction that saw the exit of large amounts of money from the market. The reason for this event was the development of a speculation based bubble as traders traded on an economy that was weaker than sentiment that surrounded it. The markets could not support this extra girth and dropped it. The cyclicality of the business model begs for economists and long-term investors to give attention to macroeconomic dynamics. Specifically, analyzing the accuracy of the efficient market hypothesis can be the key to creating and exiting positions based on speculative bubbles. Are prices at any point in time accurate depictions of supply and demand fundamentals? Or are price movements the result of the psychological chaos that is investor sentiment? At the beginning of the millennium, the market saw a reevaluation of stock prices that were inflated by the seemingly revolutionary sentiment behind tech stocks. The dot com boo…

Movement Comparisons: WTI, DJIA, and S&P Energy

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Interest rate hikes are the talk of the town so far this September as the Federal Reserve Board prepares for their meetings on the 16th and the 17th. Many factors have pointed towards the certainty of raising the cost of borrowing money, but Fed leader Janet Yellen has been hesitant to pull the trigger. Even though the labor market has appeared to stabilize with unemployment levels reaching their typical 5%, worries over deflationary pressures threaten the expansion of the U.S. markets and, in turn, global economic health. Despite the fact that the Fed's actions are surrounded with ambiguity, a bull market attempted to post some gains today as the Dow Jones and the S&P 500 showed early gains that were pared down to about half a percentage point of additions. The movement seemed to reflect buyers reacting to the possibility of no rate hikes. As the main indices showed gains during today's trading session, crude oil futures increased as well but in a more convincing manner. …

Quiet Day for a Day Trader

Coming out of labor day, the U.S. markets respond to global market activity on Monday that resulted in lower crude prices and a slight stabilization of European and Asian stocks. The weekend was lead by a jobs report on Friday that was lower than the estimate, but sufficient enough to drop unemployment 0.1%. In the second economic quarter, 170,000 jobs were added just 50,000 lower that the estimate at 220,000. What does that mean for the stock market? The labor market continues to reach for the optimal unemployment level of 5% with the possibility of rate hikes on the horizon. Investors seem fixated on the macroeconomic outlook of events like the Chinese recession and Federal Reserve interest rate increases. Overall sentiment surrounding global economic health is affecting stocks through volatile intraday swings seen through the major indices. The energy sector specifically has seen a lot of intraday and intraweek swings as its traders are forced to react to normal economic data besid…

A Deep Breath and a Step Back: Economic Overview

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Money is green, and so is the stock market today as investors with long positions are raking in profits from global rebounds today. Of the many green price trends, both WTI and Brent benchmarks gain today as they approach the $50 and $55 price level respectively. Both the overall stock market gains and the crude increases have pushed the energy sector today to a 2.13% increase. Energy ETFs also swing in favor of the bull today as long positions add to the buying activity that has the markets looking forward today. Current price trends seem so take in account the encouragement by European central banks that stimulus programs are still relevant to policy makers. A particular report came out of the European Central Bank from Mario Draghi which lent to positive movement on the day. As a new month graces the financial markets, ideas about the economy have changed dramatically. We began 2015 with a very volatile market that was responding to major energy slump that began in 2014. For most o…

WTI's Volatility and Speculative Bubbles

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Wednesday's markets seemed to switch roles that have been playing out in the past week. Global stocks have found a way to stabilize, taking Chinese economic data in stride as investors continue to have confidence in their money. The Dow Jones Industrial Average settles at 0.40% with buying and selling pressures canceling out. Volume levels have slowed down to half of what the crash had brought along. Crude oil contracts have, instead, taken on the volatility that the equity markets experienced just over a week ago. Today, WTI October 2015 contracts opened at $44.26 with an intraday range of $3.56 before closing at $46.05. Commodities traders speculating heavily on fundamental implications caused major spikes in price movement with no clear direction. Brent saw similar movements and showed its fourth gain out of five sessions like its WTI counterpart. Whipsaw movement is not typically healthy, but after long summer losses, traders seem hopeful as streaks of bullish sentiment peak o…

Energy Sector Turns Volatile

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Just as lateral movement started to pick up, the markets fall again. Upon opening, the Dow Jones Industrial Average dropped 400 points. Weak Chinese data sends tremors through the system once again as Dow futures and the Shanghai Composite traded down earlier. A second correction seems to be occurring today as traders recover from last week's bout with volatility, but that bout is apparently far from over. Disappointing Chinese factory data disrupted crude oil's rebound as well, reversing a three-day trend of gaining 27% to a loss of 7% in one day. On the quieter side, natural gas contracts show less volatility as its monthly contracts show no movements over a penny. This stability could be due to its reactions being heavily governed by domestic demand data as opposed to international. Nevertheless, the natural gas index loses today because of their associations with the crude oil market. The energy sector as a whole seems to have accelerated losses because of the WTI drop tha…