• 50 mins Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 hours Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 hours Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 5 hours OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 6 hours London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 7 hours Rosneft Signs $400M Deal With Kurdistan
  • 9 hours Kinder Morgan Warns About Trans Mountain Delays
  • 16 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 21 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 1 day Russia, Saudis Team Up To Boost Fracking Tech
  • 1 day Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 7 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
Alt Text

How To Play The Next Wireless Revolution

The global communications boom has…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Alt Text

Finally: A Way To Invest In Blockchain

Cryptocurrencies and the blockchain are…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Here is Where to Watch for the Turn

Here is Where to Watch for the Turn

What to say about Thursday’s market? The “RISK OFF” trade had its finest hour. The Dow average WAS down 512 points, NASDAQ (QQQ) cratered by 135 points, oil (USO) was off $6, and copper (CU) got smacked for 34 cents. Emerging markets (EEM) quickly morphed into submerging markets. Gold (GLD) provided no refuge today, dropping $45 in hours, and silver (SLV) gave back $4 in the blink of an eye.

Only Treasury securities provided a safe haven, with overnight paper briefly showing negative interest rates. The yield on ten year Treasury bonds plummeted to 2.42%, nearly matching its 30 year low set last year.

Global contagion was back on the table, with credit default swaps for France blasting through to all-time highs. The European Central Bank’s folly of raising interest rates in the face of a weak economy is now bearing its bitter fruit.

The confirmation of the “head and shoulders” formation on the charts has triggered an entire new round of selling by technically driven programs, clearly putting the 1,160 target on the downside in play. Margin clerks on Wall Street and the futures markets in Chicago were having a field day.

US stocks have lost $1.3 trillion in market cap in two weeks. This is on the coattails of the government sucking $2.4 trillion out of the global economy in the debt ceiling compromise. Gee, do you think there is a connection?

Here is where to watch for the next major turn in the markets. The traditional safe havens of gold, the Swiss franc, the yen, and Treasury bonds, have all posted hyperbolic moves to the upside over the past two weeks.

Now gold is making topping noises, the yen has seen a major reversal, and the Swiss franc has stalled. The fact that this is all happening in August makes all of these big moves suspect.

We may be seeing the first cracks in this monolithic “RISK OFF” trade in the Japanese yen today. The Bank of Japan finally awoke from its long slumber, moving into the foreign exchange markets with a major intervention, gapping the yen down three and a half handles against the dollar. The leveraged short yen ETF (YCS) soared.

Further hope was engendered by the weekly jobless claims, which showed a loss of only 1,000. This is the second week in a row at the 400,000 level. Talk about being stuck on the 50 yard line.

JP Morgan dramatically ratcheted down its forecast for Q3 from 2.50% to 1.50%. Q4 was chopped from 3% to 2.5%. It now believes that we can expect no more than 2% growth in the first half of next year. Unemployment will stay at 9% through the end of 2012. It expects no movement by the Federal Reserves on interest rates until 2013.

I can’t tell you how many people tried to get me to buy today. The fact that I ignored them is the only reason I still have ten fingers, as catching a falling knife did not appeal. If you believe that this is just a correction in a bull market, then this is a fantastic place to buy, and the rout will be over in a few days.

If, in fact, the next recession has already begun, then we have just seen the first 12% of a 50% move down that will last three years. That is because there will be no safety net in the next crash in the form of TARP, supplementary budgets, or QE3. The Tea Party wouldn’t hear of it. I thought this worst case scenario wouldn’t start until next year, but I could be wrong.

GOLD

FXF

FXY

YCS

By. Mad Hedge Fund Traderem>




Back to homepage


Leave a comment
  • Anonymous on August 05 2011 said:
    There is a solution somewhere out there for our problems, but at the present time only one thing is clear: Mr Obama and his Tea Party rivals are not going to let us find it. Would somebody please explain that to American voters, and also tell them that they will soon have a chance to compensate for the enormous mistake of reelecting George W. Bush

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News