Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (51286)	2/1/2015 3:18:33 AM
From: Johnny Canuck	1 Recommendation Recommended By E_K_S Read Replies (1) \| Respond to of 67867

Most of the indices are definitely on the defensive, so traders should be tightening their stop losses. The trading is still pretty orderly though. Cult stocks like GOOGL did not sell off on missing the earnings estimates and poor forward guidance. Thinnly traded stocks with good fundamentals like AMNF is still trading near its highs. Till that changes there is no sense of panic though the mood in negative. As I mentioned in one of my previous posting one analyst claimed that each barrel of oil is sold 10 times over through derivatives. The price of oil should not have declined by 50% if the price actually reflected the supply demand balance. Total oil production is 86 mil barrels per day and the over supply is just 1 mil barrels. "Global oil production advanced in 2013 by 557,000 barrels per day (bpd), reaching a new all-time high of 86.8 million bpd (an increase of 0.6 percent over 2012). After declining in 2009, global crude oil production has now increased 4 years in a row. But as I noted in last month’s short article, while global oil production did indeed set a new record, the US production increase alone was 1.1 million bpd. Thus, outside the US global production actually declined by 554,000 bpd." energytrendsinsider.com I believe what that means is that oil should never have been as high as it has been and now that those long dated derivatives have expired worthless a new equilibrium point is being set. Despite the fact that no oil company in North America is profitable below $65 let alone $85 a barrel, the total global supply might indicate a price closer to where it is now due to lower cost producers of oil in other parts of the world. Saudi Arab for example is rumored to be able to produce at break even at $30. It simply means high price producer need to disappear and have no justification being in business till the supply is significantly lower.