Trading the stockmarket (NO Referrals)

regulus said:
Well, wouldn't it be a good time to buy now, knowing the oil prices will eventually rise again and profits along with that?
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On 1st April the opec+ deal comes to an end, the Saudis have millions of barrels of oil on standby ready to flood the market, oil price will be coming down to single digits over the coming weeks, do not buy oil just yet.
 
There’s very little change oil prices will stay this low long term. I’d be surprised if any major producing nation can balance the countries’ books at $20. Extremely low demand is going to be a very short term thing.
 
dowie said:
Yeah they're basically bucket shops tbh.. :)

Almost certainly they're not going to hedge most client trades - average trade size would likely be smaller than they can directly hedge anyway, probably more just concerned about their overall inventory risk. Various firms seem to have implemented some form of dealer surveillance tool - one of my mates was involved in developing one at a large SB firm years ago - just the process of flagging up a customer's orders to a dealer inherently slows them down significantly and of course a human dealer is prone to slipping prices when it suits and/or giving adverse fills instead if it goes against the customer etc..
One thing they used to be concerned about is scalpers - not random day trading idiots but people who might use their own price feed and spot where the SB/CFD firm is slow to update prices the try to pick them off - though easy enough to catch those people and things like dealer surveillance tools will instantly ruin their game. Not sure that is so feasible these days but years ago they'd not be on top of everything when trying to stream prices for hundreds of different products and just like a regular bookie someone paying attention could start picking off some of their quotes etc..
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I always wondered if it would be possible to beat them at their own game if I had access to a Bloomberg terminal, now I know it wouldn't be :D

Minusorange said:
Oil value reached its lowest since 2002

https://www.bbc.co.uk/news/business-52089127

Yet oil company shares continue to rise

Go figure...
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Don't forget a lot of those companies have also been investing aggressively in green energy for a long time, so whilst the core commodity and demand for it is down, a lot of the companies still have strong long-term fundamentals.
 
Theophany said:
Don't forget a lot of those companies have also been investing aggressively in green energy for a long time, so whilst the core commodity and demand for it is down, a lot of the companies still have strong long-term fundamentals.
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Only the major companies and we're yet to see the fruits of their labour when it comes to green energy, demand for oil is going to be very very low for months and probably longer if airlines start going bust due to nobody being able to fly, the oil economy can't rely on just demand from cargo transport not at the rate they're pumping out barrels, the likes of Shell/BP will cut back on production but that means laying people off as well so they're no longer as profitable due to reduced production combined with the cost of oil, I know the market is going retarded at the moment but this really stands out as not making any sense at all, the future looks bleak for oil especially if Russia & Saudi continue their pumping war.
 
Fusion said:
And how long do you think they will want to sustain that for, given that their finances will be going increasingly pear shaped as these rock-bottom prices continue?
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What finances? Just print more money, everyone else is doing it... (I know technically they aren't, but i'm sure there's a way)
 
Stock tip: invest in anyone that makes posh sheds. I confidently predict that millions of people are now realising they're cheaper than a lifetime of therapy.
 
Minusorange said:
Only the major companies and we're yet to see the fruits of their labour when it comes to green energy, demand for oil is going to be very very low for months and probably longer if airlines start going bust due to nobody being able to fly, the oil economy can't rely on just demand from cargo transport not at the rate they're pumping out barrels, the likes of Shell/BP will cut back on production but that means laying people off as well so they're no longer as profitable due to reduced production combined with the cost of oil, I know the market is going retarded at the moment but this really stands out as not making any sense at all, the future looks bleak for oil especially if Russia & Saudi continue their pumping war.
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Fair point. I think I read some analyst at Goldman Sachs was pitching the possibility of negative oil prices as producers will find it is cheaper to pay people to take it off their hands than it would otherwise be to shutdown production now and have to restart it in the future. Seems a bit pessimistic to me though as the spot prices price per barrel for has come back a bit in the last day or so for Brent and WTI.

Fusion said:
And how long do you think they will want to sustain that for, given that their finances will be going increasingly pear shaped as these rock-bottom prices continue?
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Tough to say, they're both sitting on roughly the same amount of foreign currency deposits which will tide them over for the time being. The difference is that Russia needs an oil price of around $40-45 per barrel to balance its books, whilst the Saudis need it to be around $80-85 per barrel to balance their books. Don't forget there was nothing economically sensible about what happened; Russia was happy for oil to fall from the roughly $60-70 per barrel it was at the beginning of the year to hurt the US shale industry but the Saudis were committed to curbing production as tankers were being turned away from China, the biggest consumer of oil. Russia has quite literally cut its nose off to spite the US' face.
 
Oil will be suppressed for a while.
If people carry on working more from home etc it's not gonna help the oil companies

Its great for environment however!

I was tempted by the big oil players, but think there are better companies

Certainly would be concerned about small players in oil.
 
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).
 
Less confident given the astronomical sums of free money being given away. There's so much cash floating around at the moment, it has to go somewhere.

But, I think we are yet to see the really ugly scenes in London and New York, which will resume downward pressure, at least for a while.
 
md85 said:
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).
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If you buy the market today, you're buying at a roughly 25% discount to the year-to-date peak. If you're a long term investor, that's quite an entry point. If you're looking at an individual stock selection level, well there does appear to be a rotation into value occurring rather than the growth-chasing we've seen over the last couple of years. Over that period just 5 companies have been responsible for the vast majority of the S&P500's growth and unsurprisingly they're all hypercap companies because it's a cap-weighted index.

Everybody and their aunt has an opinion on whether there will be a U-shaped recovery, a V-shaped recovery and all manner of dead animal bounces. Bottom line is you'll make 3/5ths of sod all in cash over the long term simply because sovereign debt levels are now at a point where Central Banks are essentially bound to interest rate levels that keep that debt serviceable, i.e. as low as possible.

Nobody knows what will happen tomorrow, but the information that is available today is sufficient to make long term investment decisions at a personal level in my experience.
 
md85 said:
Is everyone predicting a further drop and bottom still confident? That's 5 sessions out of the last 7 that have been positive (including today, still open).
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Yes, end of this week or next week, some news might come out that'll kickstart it. Test 18k on the DOW, if that doesn't hold, then down to ~15k.
Definitely getting my shorts ready..
 
I'd expect it to fall some still, just hesitating in this area is quite positive as it may go lower and very likely come back here so its not the wrong price as such even if cheaper happens. Bottom pricing will take a while to be confident on, this whole year probably.

Oil isnt staying low forever as not growing things to eat and so on, has to occur. All kinds of normal things take energy to do, many people will die but the population of the earth will increase this year and imo for many years forward so greater demand is the base line. Tell me they refined solar panel efficiency and its a greater threat then this pullback is to oil.

I think its worth some punt, ET $1.22 payout on a $4 share, they own a lot of infrastructure so have revenue at every price I guess. A while back this and WMB were a great bet as once again gas had fallen a lot back then mid merger deal. Not sure its true now but its nicely priced surely
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