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sweetandsour
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Post by sweetandsour »

Del wrote: 14 Sep 2022, 06:48
sweetandsour wrote: 14 Sep 2022, 03:53 RE the SPR, the one here locally is still shipping, with no new oil being received. Inflation must really be gauged by fuel cost much more heavily than I thought, or at least that's what Biden is banking on. And speaking of liberal media commentary, did you read Krugman's piece yesterday? "Misery Takes a Holiday".
This inflationary cycle is surprisingly simple to diagnose. First, Biden and Powell at the Fed made a conscious decision to push unearned money at people during their prolonged covid recession, as if the first batch of Trump Bucks wasn't enough. Total result was an increase of the M2 Money supply by a whopping 33%. Meanwhile, "supply chain" disruptions caused occasional shortages of goods. That's $133 chasing fewer goods than $100 used to balance.

It would have been okay if everyone got back to work and the economy grew to fit the money supply. Fed already planned to tighten some of that money back (by selling much of their hyper-massive bond portfolio) anyhow.

But Biden also put sanctions on American energy. That's a limiting resource that puts the brakes on everything that is produced and increases the cost of everything that is consumed. People feel it immediately, as American rely on our cars.

Biden, seeing himself tank in the polls, refused to relax his green energy mistakes and open energy production. Instead, he decided to rob our piggy bank at the Strategic Petroleum Reserve. This has delayed Biden's Big Recession until after the midterm elections.

You know its a looming catastrophe when a family isn't earning new income and is rapidly spending down its savings. That's what our nation is doing.

Remember when Biden wanted to push more fake cash at people in the form of monthly gas-cash cards to help with fuel costs? Dispensing 1 million barrels per day from the SPR is the same unfunded government spending, just less obvious and dramatic. The next president will have to spend that money to replenish our reserve, and he'll get blamed for the huge deficits.
=====================================

Mr. Market doesn't see the looming fuel crisis, inflation and recession. My conservative podcast news are just vaguely aware of it. I sometimes feel like I am the only investor in the country who sees what is happening soon, and I'm wondering if I'm just crazy. Am I missing something that everyone else can see?
=====================================

I am familiar with Paul Krugman. He's an ass. Keynesian theorist who believes that more government spending is always good for everyone.

The article you mention is behind a paywall at New York Times, unless you have a backdoor link for me. What does he have to say?
I'll see what I can do with the paywall, but basically he (PK) uses Reagan's old "Misery Index" to measure today's inflation.

Meanwhile, per API this morning,
"Supply-demand imbalances, insufficient alternative energy sources and underinvestment in new drilling could drive oil prices as high as $150 per barrel, said Christyan Malek, global head of energy strategy at JPMorgan Chase in an interview. Separately, Chevron Chairman and CEO Mike Wirth warned of "significantly higher" US natural gas prices this winter and argued against an export ban, noting that such an action "runs the risk of taking supplies that are needed in other parts of the world and reducing those which can drive world prices up, which then can affect the price of imports into this country.""
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Del
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Post by Del »

sweetandsour wrote: 14 Sep 2022, 07:13
Del wrote: 14 Sep 2022, 06:48
sweetandsour wrote: 14 Sep 2022, 03:53 RE the SPR, the one here locally is still shipping, with no new oil being received. Inflation must really be gauged by fuel cost much more heavily than I thought, or at least that's what Biden is banking on. And speaking of liberal media commentary, did you read Krugman's piece yesterday? "Misery Takes a Holiday".
This inflationary cycle is surprisingly simple to diagnose. First, Biden and Powell at the Fed made a conscious decision to push unearned money at people during their prolonged covid recession, as if the first batch of Trump Bucks wasn't enough. Total result was an increase of the M2 Money supply by a whopping 33%. Meanwhile, "supply chain" disruptions caused occasional shortages of goods. That's $133 chasing fewer goods than $100 used to balance.

It would have been okay if everyone got back to work and the economy grew to fit the money supply. Fed already planned to tighten some of that money back (by selling much of their hyper-massive bond portfolio) anyhow.

But Biden also put sanctions on American energy. That's a limiting resource that puts the brakes on everything that is produced and increases the cost of everything that is consumed. People feel it immediately, as American rely on our cars.

Biden, seeing himself tank in the polls, refused to relax his green energy mistakes and open energy production. Instead, he decided to rob our piggy bank at the Strategic Petroleum Reserve. This has delayed Biden's Big Recession until after the midterm elections.

You know its a looming catastrophe when a family isn't earning new income and is rapidly spending down its savings. That's what our nation is doing.

Remember when Biden wanted to push more fake cash at people in the form of monthly gas-cash cards to help with fuel costs? Dispensing 1 million barrels per day from the SPR is the same unfunded government spending, just less obvious and dramatic. The next president will have to spend that money to replenish our reserve, and he'll get blamed for the huge deficits.
=====================================

Mr. Market doesn't see the looming fuel crisis, inflation and recession. My conservative podcast news are just vaguely aware of it. I sometimes feel like I am the only investor in the country who sees what is happening soon, and I'm wondering if I'm just crazy. Am I missing something that everyone else can see?
=====================================

I am familiar with Paul Krugman. He's an ass. Keynesian theorist who believes that more government spending is always good for everyone.

The article you mention is behind a paywall at New York Times, unless you have a backdoor link for me. What does he have to say?
I'll see what I can do with the paywall, but basically he (PK) uses Reagan's old "Misery Index" to measure today's inflation.

Meanwhile, per API this morning,
"Supply-demand imbalances, insufficient alternative energy sources and underinvestment in new drilling could drive oil prices as high as $150 per barrel, said Christyan Malek, global head of energy strategy at JPMorgan Chase in an interview. Separately, Chevron Chairman and CEO Mike Wirth warned of "significantly higher" US natural gas prices this winter and argued against an export ban, noting that such an action "runs the risk of taking supplies that are needed in other parts of the world and reducing those which can drive world prices up, which then can affect the price of imports into this country.""
We are both senior enough to remember the 70's and early 80's. In the midst of prolonged inflation and a prolonged recession with high unemployment, the media created a measure called the Misery Index = Inflation Rate + Unemployment Rate. Not much of a useful economic indicator, but it told our story well.

We are just getting started with inflation, and unemployment isn't a problem yet. Krugman, with his Nobel Prize and all, should be warning Biden to allow more drilling and to spend some "Inflation Reduction" money on refineries and pipelines.

No doubt Krugman is just urging us all to be happy and complacent because we aren't miserable yet.
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Post by Del »

At 9:40 am Wednesday:

XLE (energy sector) has recovered most of what it lost yesterday. Lost 2.5% yesterday; now down just 0.2% from two days ago.

XLK (tech sector) hasn't recovered much at all. Lost 5.3% yesterday; still down 4.8% from two days ago.


Update: 10:00 am

XLK and SPX are trading slightly up, near yesterday's close. SPX at 3950, staying close to support.

XLE is surging up and beyond Monday's close, as if yesterday never happened!
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Post by sweetandsour »

From today's API newsletter:

US may bolster SPR when oil falls below $80 a barrel
The Biden administration may start buying oil to replenish the Strategic Petroleum Reserve when crude slides below $80 a barrel to support US production growth and oil prices, according to sources. In March 2020, Democrats stopped the Trump administration from purchasing $3 billion worth of oil at $24 a barrel to refill the SPR, a move for which the current administration is paying a hefty price. Full Story: BNN Bloomberg (Canada) (9/13), BNN Bloomberg (Canada) (9/13)

NVDA low is 129 today, so far. My trigger finger is itching, but I may buy more XLE instead, just for something to hold for a while.
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Post by Del »

sweetandsour wrote: 14 Sep 2022, 11:29 From today's API newsletter:

US may bolster SPR when oil falls below $80 a barrel
The Biden administration may start buying oil to replenish the Strategic Petroleum Reserve when crude slides below $80 a barrel to support US production growth and oil prices, according to sources. In March 2020, Democrats stopped the Trump administration from purchasing $3 billion worth of oil at $24 a barrel to refill the SPR, a move for which the current administration is paying a hefty price. Full Story: BNN Bloomberg (Canada) (9/13), BNN Bloomberg (Canada) (9/13)

NVDA low is 129 today, so far. My trigger finger is itching, but I may buy more XLE instead, just for something to hold for a while.
Trump could have bought 125 million barrels, which would more than cover Biden's 1 million barrels per day x 100 days. Biden is selling oil at over $100 per barrel.

Why did Democrats stop Trump from stocking up on cheap oil during a strong economy? Seems like a no-brainer, even for Democrats. Obama would have done it, if he had been able to set up a strong economy.
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Post by Del »

sweetandsour wrote: 14 Sep 2022, 11:29 From today's API newsletter:

US may bolster SPR when oil falls below $80 a barrel
The Biden administration may start buying oil to replenish the Strategic Petroleum Reserve when crude slides below $80 a barrel to support US production growth and oil prices, according to sources. In March 2020, Democrats stopped the Trump administration from purchasing $3 billion worth of oil at $24 a barrel to refill the SPR, a move for which the current administration is paying a hefty price. Full Story: BNN Bloomberg (Canada) (9/13), BNN Bloomberg (Canada) (9/13)

NVDA low is 129 today, so far. My trigger finger is itching, but I may buy more XLE instead, just for something to hold for a while.
This story has hit mainstream news and blogger news.

https://www.bloomberg.com/news/articles ... ify%20wall

https://www.dailywire.com/news/biden-co ... oil-was-24

On the other hand, I have to praise Biden for establishing that he might pay for his own policy of robbing the piggy bank. Might be the only time I get to do that.
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Post by sweetandsour »

Fed-X down 21%, a nosedive, after their pre-announcement yesterday. UPS dropped also, 3-4%.

Nothing good about making brutal pre-announcement profit warnings, but especially when done right at the end of the day just as the market is closing. Analysts are saying that this is happening more and more.

Meanwhile, Feds are expected to raise rates again next week. And it looks like the SPX 3900 floor is being breached now.
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Post by Del »

sweetandsour wrote: 16 Sep 2022, 06:34 Fed-X down 21%, a nosedive, after their pre-announcement yesterday. UPS dropped also, 3-4%.

Nothing good about making brutal pre-announcement profit warnings, but especially when done right at the end of the day just as the market is closing. Analysts are saying that this is happening more and more.

Meanwhile, Feds are expected to raise rates again next week. And it looks like the SPX 3900 floor is being breached now.
Yup. Mr. Market is clearly spooked by his discovery that inflation hasn't gone away. If that's all there is, then he might climb back onto his mattress at 3900.

It is somewhat more likely that Mr. Market is reading the news about the Fed's resolve to increase rates, SPR ending in November, and beginning to price in expectations of a prolonged recession. In this case, the market will likely go back to test 3900, and then head down to find new support.

Another fundamental that isn't getting much press is the agriculture situation. Pretty soon we will be getting reports on harvest yields after a year of fertilizer shortages and low rainfall in the US, and Ukraine did little farming.

The next two years are going to be brutal.
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Post by Del »

Confession time: I got double whip-sawed last week.

The exuberance to the market on Monday threatened to bust through the top of my condor on Monday, so I had to make an expensive adjustment to move that leg up.... Then the market dropped precipitously on Tuesday, threatening the bottom of my condor and forcing another expensive adjustment down.

Of course, I had failed to follow my own advice to keep my position size small... so the adjustments were very expensive indeed. I ended up losing $2050 for the week. That's 30% of my gains for the year.

I'm kicking myself, over and over. Every year I lose my easy summer gains in autumn volatility.

I've placed an expletive-laden note in my trading log at the end of next August.
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Post by sweetandsour »

Del wrote: 17 Sep 2022, 07:08 Confession time: I got double whip-sawed last week.

The exuberance to the market on Monday threatened to bust through the top of my condor on Monday, so I had to make an expensive adjustment to move that leg up.... Then the market dropped precipitously on Tuesday, threatening the bottom of my condor and forcing another expensive adjustment down.

Of course, I had failed to follow my own advice to keep my position size small... so the adjustments were very expensive indeed. I ended up losing $2050 for the week. That's 30% of my gains for the year.

I'm kicking myself, over and over. Every year I lose my easy summer gains in autumn volatility.

I've placed an expletive-laden note in my trading log at the end of next August.
Man that hurts, but at least you're still ahead.

I gambled on the 3900 SPX floor Thursday afternoon and bought SPY at 390, counting on a bounce. It's at 385.5 now, but I'm still watching for a bounce, then I'll sell it and buy it back when it drops to 370, or maybe even 360.

I also bought 20 more shares of XLE at 80, and it promptly dipped down to 78.5. If crude goes back above 100, or if Biden keeps his word and starts buying to refill the SPR, then I expect XLE to creep back up, perhaps to the 90s. Lots going on right now though, so we'll see.
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