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Thursday, 21 January 2016

Crude Oil Thoughts and Immediate Effects of Low Oil Prices : 21 January 2016, Thursday, 10.45am Singapore Time

<< Crude Oil Thoughts & Immediate Effects of Low Oil Prices >>

So much news of supply glut on oil, bad news on oil, bashings on oil and experts' and professionals' bearish views on oil are coming out in the media now. I like experts and professionals, because they tell me when I have to behave as an idiot, away from the herd, and I am going to stand opposite sides from them by taking my last batch of oil profits soon.

On another side note, as a proof of how people are brainwashed by the media, when the media chose to forget to mention that low oil prices are actually as good as another round of Quantitative Easing in stimulus effects, i.e. a QE 4 in disguise, people choose to focus to forget as well. Low oil prices will see US markets attempting to make a last (one final) wave up. It will cause Asia and Europe to have a bear market rally (a rally within a bear market) while US markets make another all time new high. This is where markets are getting confusing to most people. It is because we are at major transitional phases in the markets, and each asset class has its own phase, some are laggard and some are more forward looking.

Updated, 21 Jan 2016, 8.15pm SGT (hope to share this out with everybody too):

Question from someone in Donovan's Discussion Forum:
Why will current low oil prices cause US markets to make one last wave up?

This is because most of the US industries and US companies are consumers of oil, not producers of oil. It is the same for developed economies which depend on oil as input and not producer of oil as output/export. Hence raw materials and general costs of production of most companies will be reduced and profit margins generally are better.
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