**OFFICIAL** Trading and Investing Thread- Part -VIII-

[White-Belt]

I

Of course you if you look at the chart when rates start to rise is usually the last leg of the bull market and its and usually very rapid rise then dramatic fall. 2005-2007, 1999-2000, 1988-1989

It really looks like a mixed bag to be honest - I've looked at this before, I know why the fed reduces the rates but it doesn't seem that either lower or raising rates, in and off itself causes rises or falls in the stock market. It is likely to be a mixture of several things as well, I suspect debt levels for example.

[standon23]

I think the entire industry is going to be fooked for a while, maybe for years, too many producers

Its amazing at the dividend yields some of these companies have at these prices, tlm 7.5 percent CLF 7.5 percent. SD I think pulled their dividend but it literally can't be long until the revoke the dividends because they need the damn cash-flow to stay afloat. Very interested but very scared to buy at the same time here, thats why I'm looking for the companies that pay dividends to smooth out some risk

[jackedguy87]

Time

we are on track to end the year up, so you'd be wrong about that. Every investment bank said gold would fall much further in 2014 and the end of last year and it didnt happen yet with 3 weeks to go. itll be the end of the bear market should we end the year up. sure we could head lower in the early part of 2015...but thatll be irrelevant should it happen bc those losses will be temporary and will be recouped and then some. the fed is gonna disappoint on the rate hike in the next few months by pouring more cold water thats the next catalyst for this market. no rate hikes and qe5 in 2015 ceo 10k a day. The other scenario is the fed does hike rates, and it backfires causing them to quickly backtrack by easing again. I would use a rate hike as a big buying opportunity but like I said the fed has a laundry list of potential excuses to not raise rates and pop the bubble

[badbart]

It really looks like a mixed bag to be honest - I've looked at this before, I know why the fed reduces the rates but it doesn't seem that either lower or raising rates, in and off itself causes rises or falls in the stock market. It is likely to be a mixture of several things as well, I suspect debt levels for example.

Too many people assume fed raising interest rates mean s stock market sell off, which isn't true.

[White-Belt]

Its amazing at the dividend yields some of these companies have at these prices, tlm 7.5 percent CLF 7.5 percent. SD I think pulled their dividend but it literally can't be long until the revoke the dividends because they need the damn cash-flow to stay afloat. Very interested but very scared to buy at the same time here, thats why I'm looking for the companies that pay dividends to smooth out some risk

In a down turn like this, and it does seem like the Saudis are trying to crush American shale, those highly indebted companies are going to have problems financing - Gab mentioned this a while back.

This could be a war of attrition, only the strong are going to survive which is why Badbarts etf looks attractive because it is a basket of oil firms.

[badbart]

we are on track to end the year up, so you'd be wrong about that. Every investment bank said gold would fall much further in 2014 and the end of last year and it didnt happen yet with 3 weeks to go. itll be the end of the bear market should we end the year up. sure we could head lower in the early part of 2015...but thatll be irrelevant should it happen bc those losses will be temporary and will be recouped and then some. the fed is gonna disappoint on the rate hike in the next few months by pouring more cold water thats the next catalyst for this market. no rate hikes and qe5 in 2015 ceo 10k a day. The other scenario is the fed does hike rates, and it backfires causing them to quickly backtrack by easing again. I would use a rate hike as a big buying opportunity but like I said the fed has a laundry list of potential excuses to not raise rates and pop the bubble

LOL, its up less then 1%

[badbart]

In a down turn like this, and it does seem like the Saudis are trying to crush American shale, those highly indebted companies are going to have problems financing - Gab mentioned this a while back.

This could be a war of attrition, only the strong are going to survive which is why Badbarts etf looks attractive because it is a basket of oil firms.

XLE or HYLD? HYLD is a junk bond fund very heavy in oil companies, its yield is 9.73%. But I'm not expert on junk bonds but looks very risky.

[cannadian]

I think the entire industry is going to be fooked for a while, maybe for years, too many producers

I agree that theres too much production but my analysis goes like this:

The severe drop in oil prices will devestate the expansion of oil production in canadian oil sands and american shale which are a huge chunk of the marginal producers.

As profits shrink for the rest of the industry the investments in adding new productive capacity will fall by a large amount.

Note that i am not saying production will fall, but that the rate of increase in production will fall significantly.

At the same time, dramatically reduced global energy prices will act as a stimulant (net-net) to global economic activity and lower oil prices will reduce the impetus to invest in renewables and to substitute oil for other forms of energy such as natural gas. For these reasons, all else being equal, demand for oil will increase at a greater rate than it has.

These two forces, of decreasing supply and increasing demand, will provide upward pressure on oil prices in the intermediate term, with the increase in oil prices likely to be held in check by the flexible marginal shale producers who will amp up supply whenever prices increase too much.

Remember too that the us appears to be on the verge of a nuclear deal with iran and libyan production is back online. I believe speculators are being a little too optimistic regarding the future potential for war. War would obviously add to demand for oil and could also affect the supply so this is a wild card in my view.

I would be surprised if within the next 5-10 years there isnt some new important conflict breaking out in the ME...

[White-Belt]

I agree that theres too much production but my analysis goes like this:

The severe drop in oil prices will devestate the expansion of oil production in canadian oil sands and american shale which are a huge chunk of the marginal producers.

As profits shrink for the rest of the industry the investments in adding new productive capacity will fall by a large amount.

Note that i am not saying production will fall, but that the rate of increase in production will fall significantly.

At the same time, dramatically reduced global energy prices will act as a stimulant (net-net) to global economic activity and lower oil prices will reduce the impetus to invest in renewables and to substitute oil for other forms of energy such as natural gas. For these reasons, all else being equal, demand for oil will increase at a greater rate than it has.

These two forces, of decreasing supply and increasing demand, will provide upward pressure on oil prices in the intermediate term, with the increase in oil prices likely to be held in check by the flexible marginal shale producers who will amp up supply whenever prices increase too much.

I think that is a good alternative view I had not thought of... cheers.

[Tekkendo]

ZIRP has basically fukked everything up. Time was, interest rates were determined by the market and reflected the cost of capital and investor's expectation of future economic prospect and inflation. These days, rates have decoupled from the economy as well as from investor's expectation of the economy. A free market is a price discovery machanism. You have willing buyers and sellers meet and agree on a fair price. Since the Great Financial Crisis, it is all a different ball game.


Regarding oil, it is more a political issue than market issue. Oil is the weapon to cut the rogue states, Russia, Iran down in size. A mean to counter the aggression those states have been exerting on their neighbors.

[thetrebel]

looks like gbp/aud well end up being over 450 pips (bad AUD news just came out)

nearing 500

ive locked a ton already just letting it ride here

prob my largest win ever brahs


Just a year ago I nearly lost my fx account on one bad trade



no we here

tenacity mah niiigs

reps till im out

[woodbarry]

In. So tell a non fx brah what 450 pips equals out to in $$

[White-Belt]

looks like gbp/aud well end up being over 450 pips (bad AUD news just came out)

nearing 500

ive locked a ton already just letting it ride here

prob my largest win ever brahs


Just a year ago I nearly lost my fx account on one bad trade



no we here

tenacity mah niiigs

reps till im out

Solid mate, I need to start trading the crosses, the more exotic the less liquid the more volatile and the greater the chance for profit from breakout. Only problem is I know fook all about australia lol

[standon23]

In. So tell a non fx brah what 450 pips equals out to in $$

4.5 percent 450 basis points...but huge leverage in forex so you can borrow like 50-100k easy...am I right

[White-Belt]

Badbart I think asked about bonds earlier...?

Don't know when they will come down, but marketwatch had an article saying that the fed sold 230 odd billion assets back to the market from late October. I presume most of that was bonds.

I also believe that is when we had a decent correction in the market before the fed came out and started talking about more low interest rates etc...

[BigDawg69]

In. So tell a non fx brah what 450 pips equals out to in $$

1 standard lot is about 10$ a pip, so it depends on how big a line he's swingin

[jackedguy87]

LOL, its up less then 1%

in u.s. dollars. point is, its up and did not repeat 2013 like wall street expected.

on a side note, heres an exerpt from the wall street journal:


Plenty could go wrong with the Fed’s plans. Repeatedly in this slow recovery, officials have set out to wind down their easy-money policies, only to ramp them up again. The Fed twice ended its bond-buying program and then restarted it.

In April 2012, six of 17 officials said they expected to raise rise before the end of 2013 and another seven said they expected rate increases before the end of 2014. Instead they pushed rate increases off when the economy failed to accelerate as expected.

A sharp downdraft of inflation or global growth could scuttle their plans again. Indeed, the Fed’s rate considerations come as many other major central banks—including the European Central Bank, the Bank of Japan and the People’s Bank of China—are easing credit conditions in response to slow global growth.

[SevenFigures]

USD/JPY correction coming?

[HockeyJon]

Anyone else picking up airlines? Seems like the no brainer trade right now given the oil dive.

[xRedStaRx]

It really looks like a mixed bag to be honest - I've looked at this before, I know why the fed reduces the rates but it doesn't seem that either lower or raising rates, in and off itself causes rises or falls in the stock market. It is likely to be a mixture of several things as well, I suspect debt levels for example.

I

Of course you if you look at the chart when rates start to rise is usually the last leg of the bull market and its and usually very rapid rise then dramatic fall. 2005-2007, 1999-2000, 1988-1989

Too many people assume fed raising interest rates mean s stock market sell off, which isn't true.

The stock market is a leading indicator to economic growth. The fed funds rate is a lagging indicator. Put both together and you could tell why the last bull run appears to be congruent with rising rates. When in effect, the market is getting progressively overvalued on idealistic future assumptions. So I'd kind of agree that rising fund rates above a certain threshold does indicate the beginning phases of a stock market sell off, but not as a result thereof. When rates peak, so does the stock market, and a complete sell-off occurs on high interest rates. The modern economic system is cyclical and a ripple effect was inevitable to take place since it's initiation, as evidenced by your charts.

[badbart]

The stock market is a leading indicator to economic growth. The fed funds rate is a lagging indicator. Put both together and you could tell why the last bull run appears to be congruent with rising rates. When in effect, the market is getting progressively overvalued on idealistic future assumptions. So I'd kind of agree that rising fund rates above a certain threshold does indicate the beginning phases of a stock market sell off, but not as a result thereof. When rates peak, so does the stock market, and a complete sell-off occurs on high interest rates. The modern economic system is cyclical and a ripple effect was inevitable to take place since it's initiation, as evidenced by your charts.

You said better then me.

[Barn01]

we are on track to end the year up, so you'd be wrong about that. Every investment bank said gold would fall much further in 2014 and the end of last year and it didnt happen yet with 3 weeks to go. itll be the end of the bear market should we end the year up. sure we could head lower in the early part of 2015...but thatll be irrelevant should it happen bc those losses will be temporary and will be recouped and then some. the fed is gonna disappoint on the rate hike in the next few months by pouring more cold water thats the next catalyst for this market. no rate hikes and qe5 in 2015 ceo 10k a day. The other scenario is the fed does hike rates, and it backfires causing them to quickly backtrack by easing again. I would use a rate hike as a big buying opportunity but like I said the fed has a laundry list of potential excuses to not raise rates and pop the bubble

How would keeping ZIRP a little longer pop the "bubble"? It hasn't popped it in 6yrs

ZIRP has basically fukked everything up. Time was, interest rates were determined by the market and reflected the cost of capital and investor's expectation of future economic prospect and inflation. These days, rates have decoupled from the economy as well as from investor's expectation of the economy. A free market is a price discovery machanism. You have willing buyers and sellers meet and agree on a fair price. Since the Great Financial Crisis, it is all a different ball game.

Regarding oil, it is more a political issue than market issue. Oil is the weapon to cut the rogue states, Russia, Iran down in size. A mean to counter the aggression those states have been exerting on their neighbors.

There is a distinct different in my quant formulas pre and post 2008 crash. You can see the differences in performance through different metrics used in stock evaluations. Just another reason that a quant has to always be out to modify formula to keep up with current situations. For instance pre 2008 you could have used P/S almost exclusively with some minor addins to filter out weakness and created a port almost solely on that. Post 2008 P/S doesn't work much anymore. It still holds weight but not nearly the same amount. Now EPS and CF rich companies have lead the way. I'm guessing that all the cheap money has lead to a lot of buybacks raising EPS well beyond organic levels and efficiency improvements through plant re-equipping has lead to more positive CF environment. Plant re-equipping with more efficient technology is largely possible because of ZIRP.

Once ZIRP ends I wonder where the next value will be found by the big money. Hmmmm

looks like gbp/aud well end up being over 450 pips (bad AUD news just came out)

nearing 500

ive locked a ton already just letting it ride here

prob my largest win ever brahs


Just a year ago I nearly lost my fx account on one bad trade

no we here

tenacity mah niiigs

reps till im out

Sickness ... lovin it!

Solid mate, I need to start trading the crosses, the more exotic the less liquid the more volatile and the greater the chance for profit from breakout. Only problem is I know fook all about australia lol

Play the crosses for large trends, the spreads on the exotics kill you on the scalps. Awwww fook it ... you'll be better at FX than me anyhow haha.

Anyone else picking up airlines? Seems like the no brainer trade right now given the oil dive.

I coulda/woulda/shoulda bought AC 6mths ago when it dipped into the 6's and it was flashing BUY ME on my radar! I even mentioned it in here a few times because someone else was asking about it. Do you think I followed my own advice .... NO!

You said better then me.

It's a tricky game. When rates are rising it's because the economy is doing well (the majority of the time) therefore the markets are in bull mode. It's ZIRP as Tech said that messes with the theory. The market has been very strong and no rate increase. So is the economy still in a growth condition. Well there's been no repression in 5-6yrs. Unemployment is down, GDP has posted positive, house prices have been rising slowly, the trade deficit is improving. So it would seem that we really are due for a rate hike in the near future. If the market corrects because of it then it's to be expected because of the reasons why ZIRP has inflated the market as I stated above. However I srsly doubt that 0.25% is going to crash the market past 10-15%

[GabrielNovar]

Anyone else picking up airlines? Seems like the no brainer trade right now given the oil dive.

nah, I would pick FDX/UPS over them. Just my opinion.

[Barn01]

nah, I would pick FDX/UPS over them. Just my opinion.

Or buy them both, one long and one short (as a hedge) play the divergence. Which one do you feel grows faster or is better value for future price?

inb4 pairs trading is so 1999

[White-Belt]

Got this pm

What the **** is your problem?

Are you the arbitor of the investing thread? Are you Tek's butt buddy? Why are you always sticking up for him? It makes you look weak.

hehe

[thetrebel]

^^^

lmao


makes u look weak bro






im short

il explain my reasoning later

got finals this week so il be snorting ephedra and taking caffeine intravenously

[StevieMe]

jackedguy87, my indicators are telling me that a bull market is starting in gold today.

[White-Belt]

^^^

lmao


makes u look weak bro

[img]http://i.imgur.com/sUkjsgm.png[img]

[img]http://i.imgur.com/LewK0aZ.png[/]


im short

il explain my reasoning later

got finals this week so il be snorting ephedra and taking caffeine intravenously

that chart looks weak bro

[Tekkendo]

WB only stands up for the materials I have shared in the thread, and in pm. B/c as a scientist, he values the truth. ( Except when it comes to Putin. That is something to be resolved at another time, at a dark alley behind a pub somewhere, when I introduce him to advisers left fist and right fist. Knock some sense into his thick Irish skull.)

[thetrebel]

that chart looks weak bro

up 40 pips right now srs

locked in 15 and letting the rest run

some one call the fire dept.



















im on fire this weak


ayyyy lmao