Todays Investments

Oil and the Fed

2008-08-05T11:43:00.002-04:00

Today the Fed meets. I don't think they will go anything other than to change their statement slightly. They are getting off easy this time because Oil, as I predicted, has continued to fall. However the Fed is in a hard position. Number one I don't think they have as much ability to manipulate the market as most people and to with the start of the collapse of commodity prices and the continuing credit crisis the Fed is not sure where the economy is going because this is something that has not happened before. There is no blueprint on what to do and we are in an election year.

As far as Oil is concerned, oil continue to fall. However the reason is not what you hear on TV. It has nothing to do with what the politicians are saying or the fact the gov may sell off its reserve. It is just the technicals of the market. In short the market just went up to fast and overvalued oil. It created the much discussed "bubble". There are no buyers at the price so it has to fall. Once it starts falling, investors who are not really experienced in commodity trading start to panic and sell. It is like a rock rolling down hill, no one wants to get in front on it, everyone wants to get out of the way.

If you bought Oil at 120/barrel and it goes down to 122. suddenly you have lost your profits that were there at 145. Since you don't wont to lose money you get out, joining the rock rolling down hill. The professionals see what is going on and they will start to short oil. Again joining the rock rolling down hill. So what is to stop it? Nothing unless we have something blow up in the Middle East

Oil DOWN again

2008-08-04T15:31:00.002-04:00

Once again we see Oil and other commodities headed down. Oil broke a big technical barrier around $122.00. We should see further downside. It is funny to watch TV and see the talking heads try to explain why Oil is going down when only days before it was headed out of sight!!! If you look at the long term trend Oil is heading further down. This is nothing more than another "bubble" bursting. Do you really think oil has changed so much in the past two years that it the price has run up from 35-150/ barrel? I don't think so. While it may not go down to 35 again we may see 50/barrel.

OIL Prices

2008-07-30T13:04:00.006-04:00

The price of oil has been driven up by reports that the US oil inventory has increased, but not by as much as expected. So in the space of a few weeks we have gone from driving the price of Oil by having a shortage to today when we see the price go up even though inventories are also going up?

What sense does that make? Today's report continues recent weekly reports that consumers have, in fact, cut back on driving etc. The number of highway miles driven in May dropped by over 9 billion yes billion, miles from the previous May. This is the largest drop ever recorded. Plus May is when US drivers usually increase their mileage. So consumers are doing their part.

Now lets see if the market actually works as its should. Less oil consumed should equal lower price..correct? Actually I believe it will. In the past few months the price of oil was driven up to fast and by artificial means, so we should see the price drop. What are your thoughts? Y0u can go to my website and follow the price of oil; http://todaysinvestments.googlepages.com/.
You can check out the price of gas in your area @http://gasbuddy.com/