As you all know, oil prices have plunged lower since June 2014. Many so-called experts such as T. Boone Pickens are predicting oil prices will go back to $100.00 a barrel. Below I will give you three reasons why oil prices will not trade back above $77.00 in the next year and possibly longer.
1. The U.S. Dollar has officially broken out to the upside on the charts and this will keep oil prices in check for a very long time. You see, oil around the world is traded in U.S. Dollars. The U.S. Dollar is considered to be the world's reserve currency. So if you live in Japan and want to buy a barrel of oil you need to convert Japanese Yen into U.S. Dollars before you can buy that barrel of crude. Traders should note that as long as the U.S Dollar remains strong crude prices will remain weak. Just look at the chart below and you will easily see the inverse relationship between the price of crude and the rise in the U.S. Dollar.
2. Other central banks will continue to devalue their currencies for the next couple of years. This stimulus act by the central banks around the world such as the Europe Central Bank(ECB) and the Bank of Japan(BOJ) will help to strengthen the U.S Dollar for years to come. Basically, the U.S. Dollar is strengthening because of all money printing by other central banks. Once again, a strong U.S. Dollar means a weaker price in crude.
3. Many countries including China and the United States have vowed to promote solar and other alternative energy sources. It is easy to see how many people are now driving hybrid and electric cars already. Solar and alternative energy technology continues to improve for commercial and residential use and this should cause the use of fossil fuels to decline. Many countries such as the United States, and Canada have unlimited supplies of natural gas which could also cause put pressure on oil prices for years to come.
As the Federal Reserve has back-stopped the market for six years with massive quantitative easing, the upswings have gotten more robust. On the other hand, the collapses have become more epic as well in the past few decades with Federal Reserve intervention. Just look at the tech collapse in 2000-01 and the financial collapse in 2008-09. Federal Reserve intervention was not as robust as it has been in the last six years but the markets still had epic collapses. As an investor and trader, the swings test the best in the business and ultimately mean the charts must be read constantly. While no investor or trader nails the exact bottoms or tops every time, the best traders will consistently pick close to those key points. In addition, the best traders and investors are the ones that do not let emotion take control EVER. Emotion is the one thing that will cause more losses than anything else when investing. While the average investors will chase markets up and down, the pros have that ability to hold back, waiting for the perfect technical setup. [more]
Today, the big news report in the financial media is that Goldman Sachs Group Inc (NYSE:GS) has fired a junior employee and a supervisor for leaking confidential information from the Federal Reserve Bank of New York. Is anyone surprised that this incident actually happened in the first place? The answer is, no. In fact, the market does not care that information sharing occurred between Goldman and the Federal Reserve, as long as the stock market continues to rise. If this incident occurred in a bear market, then all hell would break loose, but that is not the case at this time. Here is another question, does anyone believe that this information sharing is not going on at other large "too big to fail" firms? If you still believe it is not, then I have a bridge to sell you. The bottom line, Goldman and the Fed are basically one in the same. [more]
Japans Prime Minister Shinzo Abe has had his country printing more money than the Federal Reserve. In fact, the amount they have printed has made the Federal Reserve look like they barely print at all. Japan did this all to try and stimulate their economy through consumer spending. How? Let me explain. The idea of global Federal Reserve banks has been to create inflation. By creating inflation you increase prices. If the consumer knows that prices will be higher in the future, they will buy today. That is the theory at least...
Just days ago, Japan announced that instead of over 2% growth, their economy had shrunk by over 1%. This was a shock and should truly freak you the f^*k out. If the country that printed more money than anyone else just slipped into recession, what chance does Europe or the United States have? To take it a step even further, if printing that much money did not stimulate continued long term growth, does printing money even work? That may be the bigger thing to freak out about. Has the global Federal Reserve policy of printing money done anything but set us up for a major catastrophe. Time will tell and unfortunately, we all will find out and suffer the consequences if their 'theories' were wrong.
Originally posted on InTheMoneyStocks.com [more]
This morning, leading off-price apparel and home fashions retailer The TJX Companies Inc (NYSE:TJX) is declining lower after reporting earnings. The TJX Companies Inc operates its stores under the T.J. Maxx, Marshalls, HomeGoods, and Winners trademarks. Today, the TJX stock price is trading lower by $1.77 to $59.76 a share. Day traders should now watch for intra-day support around the $58.36 level. This is an area on the chart that should be support by the institutional money. [more]