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Post by phoebear611 on Dec 12, 2014 2:48:55 GMT -8
It's Friday, December 12th and markets look like....for lack of a better word...crap. Asia was slightly up overnight and Europe looking slightly green. S&P futures are showing a deep red open - down about 13 - the DOW is showing down triple digits - ugh. Oil slightly above $59 but did crack that level for a bit yesterday evening. AAPL in PM is RED and trading at $110.72 (-.90) Why do I keep humming this song this morning... "Darlin' you got to let me know...should I stay or should I go." CBC reporting that Apple probed by Competition Bureau for iPhone carrier deals but the bureau added, however, that so far it has no evidence that Apple has contravened any rules. This story carried on several sites: www.cbc.ca/news/business/apple-probed-by-competition-bureau-for-iphone-carrier-deals-1.2870261 AppleInsider carrying a story last night that online Apple Store now accepts PayPal payments in the US and UK - macrumors and 9 to 5 Mac have similar articles, as well as Yahoo: appleinsider.com/articles/14/12/11/online-apple-store-now-accepts-paypal-payments-in-us-and-ukI have no clue what the hell this stock will do today but it seems to be at the mercy of the larger market. In spite of that I'm hoping for some stabilization here and to resume the upward march next week...but first we need to deal with today. Max Pain is showing $113 for today - we'll see. Let's TRY to make some money...someway...somehow. (PS On a lighter note: Today is International Ugly Christmas Sweater Day)
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Post by macwire on Dec 12, 2014 6:39:56 GMT -8
Interesting.
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Post by archibaldtuttle on Dec 12, 2014 7:46:12 GMT -8
Can anybody explain to me why a large drop in oil prices would tank the US stock market?
I get that low oil prices would be painful for energy firms and I also get that it would create instability in oil dependent countries.
But it seems like these factors would be outweighed by the increase in purchasing power in consumer dependent economies such as ours, and in the increased flexibility of central banks to keep interest rates low because of the lack of inflation.
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Post by macwire on Dec 12, 2014 8:00:50 GMT -8
Can anybody explain to me why a large drop in oil prices would tank the US stock market? I get that low oil prices would be painful for energy firms and I also get that it would create instability in oil dependent countries. But it seems like these factors would be outweighed by the increase in purchasing power in consumer dependent economies such as ours, and in the increased flexibility of central banks to keep interest rates low because of the lack of inflation. Energy is a large part of the S&P500. As oil drops companies have to revise down their guidance possibly halt production...it becomes a mess. Yes there is a benefit to possible consumer cyclical type down the road Out weigh? Market is all about the now mostly imo. Market is judging it extremely harshly for time being.
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Post by tuffett on Dec 12, 2014 8:06:37 GMT -8
Not to mention at all time high levels people are looking for any reason for a selloff.
Also, a lot of oil producers have hedged significant amounts of their production into 2015/2016. Have to wonder who is on the other side of those trades and potential impacts. Banks? I'm not sure. All I know is that it's not just the oil producers that are losing.
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Post by macwire on Dec 12, 2014 8:43:16 GMT -8
Few hourly chart thoughts
Poss double bottom at that .382 fib level if we continue to hold over 110.25
Positive RSI divergence emerging on hourly as well.
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Post by mace on Dec 12, 2014 8:45:56 GMT -8
phoebear611,
What is the lowest price that those three Elliotticians from EWT say?
Using simple channel theory, AAPL would bottom around $109.78 (multi-day downtrend channel) or $107.21 (the downtrend channel since $119.75).
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Post by nathanstevens on Dec 12, 2014 8:46:31 GMT -8
Can anybody explain to me why a large drop in oil prices would tank the US stock market? I get that low oil prices would be painful for energy firms and I also get that it would create instability in oil dependent countries. But it seems like these factors would be outweighed by the increase in purchasing power in consumer dependent economies such as ours, and in the increased flexibility of central banks to keep interest rates low because of the lack of inflation. Saudi's ability to impact global economy giving markets goosebumps. Lots of things aren't directly tied to the price of oil, but they are directly tied to the price and security? of the petrodollar.
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Post by nathanstevens on Dec 12, 2014 8:48:47 GMT -8
Few hourly chart thoughts Poss double bottom at that .382 fib level if we continue to hold over 110.25 Positive RSI divergence emerging on hourly as well. I liked the .382 as well, but I'm hesitant because that has been overshot twice now. Any rules of thumb for a % tolerance on the levels?
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Post by mace on Dec 12, 2014 8:50:25 GMT -8
...Why do I keep humming this song this morning... "Darlin' you got to let me know...should I stay or should I go." Appropriate song. Any views on the global and US economy going forward? Stock market?
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Post by macwire on Dec 12, 2014 8:53:36 GMT -8
Few hourly chart thoughts Poss double bottom at that .382 fib level if we continue to hold over 110.25 Positive RSI divergence emerging on hourly as well. I liked the .382 as well, but I'm hesitant because that has been overshot twice now. Any rules of thumb for a % tolerance on the levels? I'm considering a 60 or 90' bar that closes below that level as potential invalidation.
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Post by nathanstevens on Dec 12, 2014 8:55:00 GMT -8
100% retrace to 109.35 of the short term move? Maybe 50% retrace of the move from 95.18-119.75...107.47. Both levels are close to the channels that Mace is talking about.
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Post by phoebear611 on Dec 12, 2014 9:44:27 GMT -8
phoebear611, What is the lowest price that those three Elliotticians from EWT say? Using simple channel theory, AAPL would bottom around $109.78 (multi-day downtrend channel) or $107.21 (the downtrend channel since $119.75). The best one there had a near term top of $117.90 and then a retrace to the low 100's with a minimum of $109.10, then if it continues lower he's looking at $107.62 and then $104.95 and so on. The absolute lowest price some of them have mentioned and are hoping for to re-enter seems to be $95 (95.33 exactly). However, there is a HUGE debate amongst them that it ever sees that $95-ish price. The general consensus seems to be around the 105-107 area as a real low. It's pretty much in line with you Mace...pennies difference. Again, once the low is established they all agree it goes way higher but they are always reassessing. Hope that helps.
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Post by phoebear611 on Dec 12, 2014 9:48:22 GMT -8
Can anybody explain to me why a large drop in oil prices would tank the US stock market? I get that low oil prices would be painful for energy firms and I also get that it would create instability in oil dependent countries. But it seems like these factors would be outweighed by the increase in purchasing power in consumer dependent economies such as ours, and in the increased flexibility of central banks to keep interest rates low because of the lack of inflation. Energy is a large part of the S&P500. As oil drops companies have to revise down their guidance possibly halt production...it becomes a mess. Yes there is a benefit to possible consumer cyclical type down the road Out weigh? Market is all about the now mostly imo. Market is judging it extremely harshly for time being. I think energy is only about 20% of the S&P - not that 20% isn't a big number but on the flip side 80% should be doing very well ... the commentary about potential hedges that can hurt other types of players/companies is a whole other story but I really do agree that in the long run the lower oil price is much, much better for our economy.
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mark
fire starter
Posts: 1,575
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Post by mark on Dec 12, 2014 9:53:22 GMT -8
Energy is a large part of the S&P500. As oil drops companies have to revise down their guidance possibly halt production...it becomes a mess. Yes there is a benefit to possible consumer cyclical type down the road Out weigh? Market is all about the now mostly imo. Market is judging it extremely harshly for time being. I think energy is only about 20% of the S&P - not that 20% isn't a big number but on the flip side 80% should be doing very well ... the commentary about potential hedges that can hurt other types of players/companies is a whole other story but I really do agree that in the long run the lower oil price is much, much better for our economy. Looks like energy is 12.7% of S&P500. Though I don't know the date of this document. useconomy.about.com/od/glossary/g/SP500.htm
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Post by mace on Dec 12, 2014 10:04:57 GMT -8
phoebear611, What is the lowest price that those three Elliotticians from EWT say? Using simple channel theory, AAPL would bottom around $109.78 (multi-day downtrend channel) or $107.21 (the downtrend channel since $119.75). The best one there had a near term top of $117.90 and then a retrace to the low 100's with a minimum of $109.10, then if it continues lower he's looking at $107.62 and then $104.95 and so on. The absolute lowest price some of them have mentioned and are hoping for to re-enter seems to be $95 (95.33 exactly). However, there is a HUGE debate amongst them that it ever sees that $95-ish price. The general consensus seems to be around the 105-107 area as a real low. It's pretty much in line with you Mace...pennies difference. Again, once the low is established they all agree it goes way higher but they are always reassessing. Hope that helps. The lowest acceptable price before this multi-month rally since Apr 2013($52.87, adjusted for dividends) would be called off is $95 (likely to be where 52-week EMA/200-day SMA is). If AAPL continues to decline along the downtrend channel established since $119.75, it will meet the lower channel line of the uptrend channel established since Apr 2013 at $105ish. $105 and $95, a difference of $10 is a big difference for traders... although mean nothing to a long term investor. So it seems all three didn't think the multi-month rally is over, just disagree with the amount of retracement before rally resume. Hope they are right.
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JDSoCal
Member
Aspiring oligarch
Posts: 4,189
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Post by JDSoCal on Dec 12, 2014 10:09:23 GMT -8
I think energy is only about 20% of the S&P - not that 20% isn't a big number but on the flip side 80% should be doing very well ... the commentary about potential hedges that can hurt other types of players/companies is a whole other story but I really do agree that in the long run the lower oil price is much, much better for our economy. Looks like energy is 12.7% of S&P500. Though I don't know the date of this document. useconomy.about.com/od/glossary/g/SP500.htmOil is like 2.5% of US GDP. Cheap oil will help the US economy over the long haul. I just think right now people see oil falling and gold down and commodities and deflation and aaaaaaaaaaaah! run for the exits kind of mentality. I think the falling (knife) is what's scary. Once the price of oil stabilizes wherever it ends up, the markets will absorb it and move on. They just don't like the volatility. Cheaper gas means more money in every consumer's pocket (without some Keynesian government scheme of stealing from the future). Online sellers and retail electronics and the shippers that deliver them should be thrilled. I've noticed a lot more free shipping lately. I forget who said it, but sometimes it's like America just can't process good news.
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Post by tuffett on Dec 12, 2014 10:11:30 GMT -8
I'd be getting in pretty heavily at $95.
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Deleted
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Post by Deleted on Dec 12, 2014 10:13:04 GMT -8
Lower oil prices have been boffo for American Airlines. It's at a 52week high. If I have my airlines correct, I think AAL didn't hedge on oil, hence, the ATH.
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Post by phoebear611 on Dec 12, 2014 11:31:56 GMT -8
Here's something else- Birinyi who has been positive on equities and continues to be - said that this oil decline should be considered a "Black Swan" type event. So what happens to technicals or fundamentals for that matter under such circumstances ?
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Post by Odd-Lot Richard on Dec 12, 2014 11:50:42 GMT -8
I think it may have something to do with index funds. Index funds now seem to be the default investment vehicle for most new investors.
If the energy sector goes down, and it is indeed 12% - 20% of the S&P 500, it's still going to be a lot of pain for index funds. A 25% drop in the energy sector is going to translate to a 3-5% drop in the index. So anyone whose fund allocates to oil companies in some significant fashion is going to want to get out. And someone who simply buys the VOO or SPY is not sophisticated enough to hedge the oil exposure portion—all they can do is sell the whole thing. This is extremely easy to do considering the gain since the beginning of the year. A lot of sellers of the whole market looking to lock in gains before oil takes them into the red might be causing a market-wide drop.
All of the above is of course base and uninformed speculation.
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JDSoCal
Member
Aspiring oligarch
Posts: 4,189
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Post by JDSoCal on Dec 12, 2014 11:57:08 GMT -8
Here's something else- Birinyi who has been positive on equities and continues to be - said that this oil decline should be considered a "Black Swan" type event. So what happens to technicals or fundamentals for that matter under such circumstances ? TA doesn't even account for white swans.
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Post by macwire on Dec 12, 2014 12:38:02 GMT -8
Another nasty close. Weekly candle pretty gross. Would expect a move down to 107-108.
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Post by nathanstevens on Dec 12, 2014 12:44:59 GMT -8
phoebear611, What is the lowest price that those three Elliotticians from EWT say? Using simple channel theory, AAPL would bottom around $109.78 (multi-day downtrend channel) or $107.21 (the downtrend channel since $119.75). we have 109.77.
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Post by mace on Dec 12, 2014 12:55:48 GMT -8
phoebear611, What is the lowest price that those three Elliotticians from EWT say? Using simple channel theory, AAPL would bottom around $109.78 (multi-day downtrend channel) or $107.21 (the downtrend channel since $119.75). we have 109.77. It touched the lower channel line at $109.58. $109.78 is if earlier.
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Post by phoebear611 on Dec 12, 2014 13:35:28 GMT -8
Next Weds. the Fed is up at 2:00 and Yellen speaks to the press at 2:30. That's always a wild card as well ... not so much about what she is doing but the precision with which they measure her every word. I guess more volatility.
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Post by macwire on Dec 12, 2014 15:03:26 GMT -8
We've had better weeks. Time for some drinks cheers
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JDSoCal
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Aspiring oligarch
Posts: 4,189
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Post by JDSoCal on Dec 12, 2014 16:16:33 GMT -8
We've had better weeks. Time for some drinks cheers I much prefer the woo-hoo! celebratory drinking than the self-medicating kind.
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Post by firestorm on Dec 12, 2014 19:09:00 GMT -8
Today really sucked. It is going to take some time to sort out the oil situation. One analysis I heard was that the Saudis are keeping production high in order to drop the price enough to force American fracking companies out of business, since fracking is only profitable when oil is at a certain level. So, we could lose a lot of tracking; the necessity of the Canadian oil pipeline down to Texas might have no business case; and windmills and solar panels will be less economically viable. It will be interesting to see how this all sorts out, meanwhile it is a LOT cheaper to travel by big honkin' RV.
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Post by rob_london on Dec 13, 2014 0:34:15 GMT -8
I just got around to reading the piece in the Financial Times on Tim Cook (their Person of the Year). Written by Tim Bradshaw, who on recent form seems to have good contacts, the article included this line:
"...there are whispers on Apple’s campus about another secret project, on the scale of the iPhone or Watch, which is pulling in talent from across Cupertino."
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