SPY and USO making new lows

[Ohthatguy]

For anyone following them, USO just opened down 20% below the 10% drop on Friday.  50% below the Jan 8th high and right at the 5 yr lows made back in Feb of 2016.

SPY is now lower than the recent lows it made on 2/28.

Gonna be a bumpy ride..

[CatfishKev]

Dumb it down for me. What's this mean? USO is oil correct? 

[Ohthatguy]

2 minutes ago, CatfishKev said:

Dumb it down for me. What's this mean? USO is oil correct? 

Yes, in short, it's oil. It's an ETF that consists of a group of oil related stocks that basically tracks the price of WTI crude. In short, it means oil prices are getting absolutely crushed. OPEC/Russia did not make a deal to cut back on production, cruise lines and airlines will be cutting back on fuel consumption along with a general world wide slow down on demand. Really low prices sound great but they are not for the big picture. 

 

[CatfishKev]

You obviously understand way more than me on this. 

1. Why would cruise and airlines cut back on consumption when prices are gonna drop?

2. Did OPEC  and Russia do this to screw the us somehow?

3. What's the big picture downside? 

[360 0r Better]

11 minutes ago, CatfishKev said:

You obviously understand way more than me on this. 

1. Why would cruise and airlines cut back on consumption when prices are gonna drop?

2. Did OPEC  and Russia do this to screw the us somehow?

3. What's the big picture downside? 

1. Coronaviris = customer demand is down 

2. Yes like if, overproduction compaired to demand is what would happen driving prices down just to sell it.

3. Look at our US economy and energy independence and give these 3 questions a little deeper thought.

[Ohthatguy]

7 hours ago, CatfishKev said:

You obviously understand way more than me on this. 

1. Why would cruise and airlines cut back on consumption when prices are gonna drop?

2. Did OPEC  and Russia do this to screw the us somehow?

3. What's the big picture downside? 

1. COVID-19  AKA Corona Virus.  People not flying as much due to cancelled meetings, conventions and just plain overreacting. Feds are recommending that people not take cruises as they are floating petri dishes. (They will be getting aid of some sort from the Gvnt so that would be a plus for the cruise line stocks but who knows how much that will help. Those stocks down around 50% since January)

2. I'm not up to speed on the working of OPEC but it seems as most members want to cut production but failed to come to an agreement about it. Saudi Arabia has cut prices and will actually increase production in an attempt to punish Russia. (Seems like that may backfire and doesn't help us short term.)

3. Zombie apocalypse!!  Airlines will be hurt. One major carrier in China went BK last week.

Oil companies, especially in exploration and production could go BK because they carry a lot of debt and need oil to be $XX.XX, and we are heading below that # if not already there..  We are awash in oil and can't give away enough natural gas.

IMHO, the market was way overbought to begin with and needed to pull back. This gave it a reason to pull back and for people to take profits. Talk of recession but I don't see that happening.

 

AS of now, 9:05 ET, the DOW is down about 1300 points but premarket means nothing. I have been waiting for a 2000 point drop and tomorrow may be it.

 

 

[PRDATR]

"1. COVID-19  AKA Corona Virus.  People not flying as much due to cancelled meetings, conventions and just plain overreacting. Feds are recommending that people not take cruises as they are floating petri dishes. (They will be getting aid of some sort from the Gvnt so that would be a plus for the cruise line stocks but who knows how much that will help. Those stocks down around 50% since January)"

Have a friend in the medical field that is part of an organization that does multiple trips to Peru each year to bring medical aid to indigenous peoples. That is on hold as they do not want to be connected with bringing the virus into the remote areas.

Another friend has had a trip to Israel in a couple of months that has been planned for a year.  That is currently up in the air as the flight goes through Germany and Israel has closed their border to all flights from Germany.

[northAZarcher]

Yet every year 30,000+ die from the flu in our country....  It doesn't take much for the masses to panick.  heck, I had to go to a few different stores just to find some cleaning supplies.  

[n2horns]

Watch % drops on Dow 7% and 20%, trading can be temporarily halted or stopped for the day.

Oil taking a dump.

Last look down about 1,500

[Ohthatguy]

15 minutes ago, n2horns said:

Watch % drops on Dow 7% and 20%, trading can be temporarily halted or stopped for the day.

Oil taking a dump.

Last look down about 1,500

Yep, already hit the 7% at the open. Next stop would be 13%..  Closes for the day if we hit 20%

[twigsnapper]

15 hours ago, Ohthatguy said:

Yes, in short, it's oil. It's an ETF that consists of a group of oil related stocks that basically tracks the price of WTI crude. In short, it means oil prices are getting absolutely crushed. OPEC/Russia did not make a deal to cut back on production, cruise lines and airlines will be cutting back on fuel consumption along with a general world wide slow down on demand. Really low prices sound great but they are not for the big picture. 

 

Just a heads up USO doesn't own energy companies, it's holdings are futures contracts on Oil and US treasuries.  Know what you own...

[Ohthatguy]

36 minutes ago, twigsnapper said:

Just a heads up USO doesn't own energy companies, it's holdings are futures contracts on Oil and US treasuries.  Know what you own...

100% correct. Thank you for pointing out my goober...  

[TOBY]

All this sh1t to get a Democrat back in office...smfh

[n2horns]

Good time to buy.  Bummer Purell is a private company.

[n2horns]

Sounds like the Saudi's will increase production and undercut the market.