About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, November 20, 2008

Comments : Oil Price & Stock Market

Oil Price
Oil closed a little below $50 bl. today. My analysis of cost
factors (supply) and purchasing power (demand) indicates oil is
reasonably priced at $50 bl. So, be it a day or longer, oil under
$50 brings back cheap energy. I have added it to my list of
items to trade long or short. How low can it go? Who the hell knows?
The clowns that brought us $147 bl. can bring it lower, I guess. I
did receive an e-mail from a seasoned and successful markets
player last week who opined that oil would go to $10 bl. Be that as
it may, I am back in the energy game after a hiatus to give the
crazies their shot. Oil is now so deeply oversold, I am leaning toward
a long position, but as with any commodity, I am strictly a trend
follower.

In a similar vein (no pun intended), I have added silver back
to my list of tradables. Gold humpers are sleazy, sanctimonius and
very snooty. Silver hawkers are merely sleazy and are much easier
to take. Besides the silver price is also now reasonable.


Stock Market
As feared, yesterday's sharp fall in the market heralded another
breakaway to the downside. There is a broad consensus jelling
in the community around the idea that a deep, prolonged downturn
in the economy is underway. The failure of the SP 500 to hold
the 830 -840 support zone has dashed hopes and left the market
in a steep short term downtrend. I'll return to this issue tomorrow.

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