Did I miss anything?
Looks like the markets held the high end of my range so we'll raise the bar all the way to 13,200 and see if we can hold that tomorrow.
Stronger sales news from MCD (the cheapest way to eat out) and GM, who are back to giving away cars, is NOT a good sign for the economy and the volume was anemic ahead of the Fed and the advance/decline ratio was 2:1, not the 4:1 we had in late August rallies. I don't want to be a party pooper but if everything was so great, why was my virtual portfolio only up slightly?
I know I'm very hedged but, as I said this morning, I have lots of unhedged positions and I evened out my DIAs yet the overall gains were less than thrilling. At least I learned my lesson from last Tuesday, where I took a big hit for being too well covered on a big day (we closed at 13,448). It was a good test of the virtual portfolios under fire as we did make some reasonable gains on a day I didn't trade a thing.
The STP nudged up to 602% while the LTP made a very nice gain to 210%, which is really how it's supposed to work as the STP is protecting the LTP (and the other small virtual portfolios) from damage.
Gold ran up to $721, a nice indication of the total lack of confidence in our currency, which broke through the critical floor to it's lowest lever EVER. EVER!!! E-V-E-R against the Euro!!! EVER!!! So your stocks better be doing well because if you attempt to cash them in and buy a Rolls, you'll need a whole lot of them! Sorry, didn't mean to ruin the party but talk about the markets fiddling while Rome burns…
We got no relief from oil as we made a new closing high of $78.23 and I will RIGHT NOW predict $60 oil by January 1st as this run-up is ABSOLUTELY baseless. We'll get into this on the weekend but I'm hoping for some nice runs in the oil patch that we can short into but let's be really careful around oil inventories as we may still be a whole month away from the breakdown, which will need a dollar recovery to begin.
OPEC raised output a meaningless 500Kbd, which will do nothing for US supplies, still in heavy backwardation with no Exit in sight for the NYMEX traders who are churning and churning like sharks in a feeding frenzy, feeding off the blood of the US consumers as they perpetrate the farce that energy trading has become in this country.
The market "agrees with OPEC that oil demand is so strong that even [with the additional output] prices hold up," said Eric Bolling, an independent energy trader. "The world economic growth picture is intact," he said, mentioning the heady expansion in China and India, among other areas. It "is very bullish in a low-to-no new oil production world." And a very happy 9/11 anniversary to you too Eric!
If that's not a total load of BS then I'm sure Eric and his pals will be eager to hold on to the 266M scarce barrels that are on order for delivery to Cushing, OK (which just reported 2 weeks of low inventories). It's interesting that those 266M barrels were traded 296M times yesterday in the NYMEX version of hot potato. In the real markets, if a stock turns over it's entire float in one day they launch an SEC investigation but over at the NYMEX, they call it active trading – active trading that drove prices up 74 cents thanks to an 80-cent gain in the last half hour of churning trading…
The scam continues unabated so we will try to lay this out for Congress as simply as possible:
The NYMEX traders have bid up the price of oil for October delivery by $10 since mid August, when it became the "front-month" contract (the one that consumer petroleum prices are based on). They have done this by ordering 266,423 1,000-barrel contracts that are scheduled for delivery to Cushing, OK during the month of October and the close of trading is September 20th, just 7 trading days away.
I will tell you right now that these traders, including the 296M barrels that were bid yesterday to drive oil to record highs, HAVE NO INTENTION WHATSOVER OF ACCEPTING DELIVERY. In fact I will tell you right now that in the next 7 days, they will cancel over 220M of those barrels, which will then be measured in the October inventory reports as a "shortage" and they will then concentrate on rolling over the November contracts, currently with 248Mb on order at $76.26.
The December contracts are currently "just" $75.08 and 204Mb are on order there and Jan '08 is $74.25 with just 71Mb on order. If you can wait until Dec 2015 for delivery, a barrel of oil will set you back just $69.24 and only 3.8Mb are on order. If this wasn't such a total farce you would think some airline would lock up those 2015 barrels or at least the Jan 2010 barrels at 70.33 to hedge their fuel costs at a 10% discount to today's prices but they don't because TODAY'S PRICES ARE A SCAM AND THE NYMEX TRADERS ARE CAUSING MORE ECONOMIC HARM TO THIS COUNTRY THAN 9/11, KATRINA AND RITA COMBINED!
6 years after 9/11 we are MORE dependent on foreign oil than we were then and we are sending $45 more per barrel to Iran, Venezuela and dozens of other countries who are on our terrorist watch list than we sent before 9/11/01. For every million barrels of oil we buy from Iran at $78 a barrel (and they sell 4M a day!), that's $78M that can fund the other side of the war on terror. Money is the ultimate political weapon and we are the ultimate funders of our opposition. The entire $45 per barrel increase we pay is profits as they have the same hole in the ground they've always had, we're just paying more for what comes out of it!
They take that money (Iran alone takes in $110Bn a year) and use it to buy cheaper soldiers who use cheaper weapons to kill us in a country where their supply lines are 6,000 miles shorter than ours. Who is buying these barrels and who is selling them and how can 296M barrels be traded but less than 10M barrels actually change hands by the end of the day? Who are these traders ultimately helping? Who is letting it happen?
America uses 20M barrels of oil a day and yesterday's shenanigans cost the American people an extra $103.6M for the week. That's money that won't go to thousands of other businesses, mortgages, groceries, services etc. but it's "after-tax" income so Congress already got their cut – perhaps that explains the apathy.
