- Man, I’m tired. You know when you leave your home before 7 am and get home after 7 pm, you’ve had a long day. I was just about to finish one thing, but two others were demanding my attention.
- John Edwards did what? Can someone put a dunce cap on that man? He wanted to be president more than almost anything but apparently not more than getting a little something on the side. I thought that an Obama administration would have to make room for John Edwards as attorney general or HUD secretary, but not any more. It is both disappointing and bewildering.
- I’m sorry, I’m just not jazzed about the Olympics. I’m just not. First of all, it is in China. Second, President Bush was at the opening ceremony. Even more, some guy (Michael Phelps) is going for eight gold medals. Eight! I’m just not whipped up. Take a look at the video below. The guy is not doing it for me. He is smug, isn’t he?
- The Bush Administration decided to put on these show trials to gain Senator John McCain some momentum and they are turning into a yawn.
- Russia and Georgia are coming to blows? Why?
- The stock market is not filling me with warm fuzzies. It’s up 300 points today but was down over 200 points yesterday. Why is this happening while the price of oil continues to drop? Aren’t the market forces the same as they were a month ago or two months ago? We’re being milked. Anyway, back to the stock market, this kind of volatility can’t be good.
- Tomorrow, I have author Rick Perlstein on my radio show. Be sure to give me a listen.
- Did Senator John McCain call Senator Barack Obama the antichrist in his last ad?
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About the Author: ecthompsonmd
Since stock trading is my area of expertise, I’ll try to answer your question about the market action and oil futures.
Historically, August is the month when a significant amount of traders take their vacations, and the volume (the most important technical indicator) decreases. Prices are very volatile for this time period, and it often takes until October for them to calm down.
Yesterday, a new level of support was tested, and established a new higher level of resistance for any future price drops, which is good. The volume spiked when the new level was tested…so it appears to be initially valid. Time will tell.
The Oil Price bubble was unsustainable, and was primarily set in motion by some oil refineries having been offline to convert to the “summer blend” of gasoline in areas with boutique fuel regulation. The pressure will again increase when they switch to producing “winter blend” because they will have to retool.
When the price of Oil Futures reaches certain upward levels, oil fields and oil wells that have been non-profitable become profitable to operate again, and their volume acts to provide a relief valve on further price increase, as does a change in driving behavior…which frees up even more volume. People tend to make only essential trips.
The people who trade in futures provide a price discount on future prices of commodities, and are able to provide businesses with a stable indicator of future cost of doing business. A lot of people lose their shirts trying to find the stable price point, but those who are better at it stand to make significant profits.
If you wish to study more about the field of technical trading, I would suggest John J Murphy as the best place to start. Then, after you have mastered that, you can move on to Brian Shannon.
Ignore 99.99999% of the analysis of the stock market you see in MainStream TV or read in the papers. And ignore 90% of the analysis of professionals on MSNBC, CNBC, the WSJ, Boolmberg, and FOX Business. It is mostly fluff in regards to price action.
thanks for the discussion. I do appreciate it.