Stretched like a rubber band

Disclaimer:  Nothing in this post or in any other post should be construed as personal investment advice.  It's for my own amusement, nothing more.  If you want investment advice, hire a financial advisor. 

 

 

It's been quite a month for financial markets.  Oil has pulled back from its war-related spike, and stocks have shot up as a result.  (Stocks were oversold, too, so they only needed a nudge to begin rallying.)  Now the stock market is in "overbought" condition.

 

 

 The equal-weighted version, however, has started to pull back a bit:

 

 

And the transports, after a bullish parabolic spike, have pulled back considerably:

 

 

Due to the transports pulling back and the broader market in overbought territory, I'm expecting a pullback soon regardless of what happens in the Middle East. 

There was a strange decoupling between precious metals and oil.  When oil went up, gold and silver went down, and when oil was down, gold and silver were up.  This probably has something to do with the Fed and expectations regarding the next chairman and interest rate decisions, but I don't really have an explanation for it.  Usually, commodities move somewhat together as a result of dollar strength or weakness.

All I know is that oil is the 800-pound gorilla in the room right now.  Some things to consider:

1.)  As a result of oil traffic in and out of the Persian Gulf being interrupted, Asia and Europe have begun to turn more to other sources of oil.  This is good for oil-producing companies that operate in the Western Hemisphere--lots more tankers are already en route to the U.S.--and it's advantageous for the U.S. on the geopolitical level.  "He who controls the spice controls the universe."

2.)  Europe is in a particularly unfortunate pickle when it comes to energy.  By cutting off Russian gas and going all in on the "green" agenda at the expense of hydrocarbons, they've rendered their societies energy-starved.  They're buying natural gas from America at premium prices in addition to the extra oil they will soon be buying from us.  If I didn't know better, I'd say that the motive behind this whole Iran business in the first place actually had nothing to do with Iran but rather was to cripple Europe and force them to get in line with whatever Washington wants them to do.

3.)  The world runs on oil, and if supply disruptions go on for too much longer, shortages will become commonplace.  It won't just be the gasoline you put in your car's fuel tank, but also motor oil and bunker fuel and lubricants and greases of all kinds.  It will also affect the price of plastics, and plastic is in almost everything nowadays.  Oil is a bigger deal than most people think.  This whole Persian Gulf thing really needs to wrap up soon so that shipping can get back to normal.

4.)  Fertilizer.  A significant amount of fertilizer comes from ships exiting the Persian Gulf.  We've already got drought conditions in some places in America--including right here in Georgia, a major agricultural state--and a fertilizer shortage on top of that can only hurt crop production further.  We like to think that famine is a largely a thing of the past, but we're actually more vulnerable to it than ever.

So there you go.  If the Gulf thing wraps up soon, then perhaps things can get back to normal before they get too bad.  If not, then global catastrophe isn't off the table.

Welcome back, astronauts!

Congratulations on a successful mission and safe return, and thanks for all the new photos.  :)

Let's go space truckin'

Artemis II is spaceborne!  Yee-haw!  :D

Good luck to all aboard, and Godspeed.

Live update link:

https://www.space.com/news/live/artemis-2-nasa-moon-mission-launch-updates-april-1-2026

 

We moved through the Canaveral moonstop
Dancin' and gone away

 

Almost a correction

Recent declines in the stock market have got it edging down very close to official "correction" territory.  A market correction is a ten percent decline in the S&P 500 but less than a twenty percent decline (which would qualify as a bear market).

Oscillators are already stretched to the oversold side, so we're due for a positive bounce on Tuesday.  Unfortunately, oil-related and war-related news will continue to be the driving factors here, not technical indicators, so looking at the chart doesn't do any good unless we can go the whole trading session on Tuesday without any news whatsoever.

I've already been stopped out of one position, and I'm close on a few others.

I don't know what will happen this week, but I know supply disruptions in the oil and fertilizer markets are serious issues that could become catastrophic issues if they continue for much longer. 

Another pleasant suprise from Mozilla

When Mozilla introduced container tabs, I decided to give the new feature a try, and it wasn't long before I decided I really liked it.

Now Mozilla has given us split view tabs, and I've played around a little with it, and I've decided I like this addition, too.

Mozilla is also gradually rolling out a free VPN.  I haven't gotten this one yet, so I haven't had a chance to play around with it.  But when/if I get it, I'll definitely give it a look-see. 

For the whole update, read Mozilla's article about Firefox 149:

https://www.firefox.com/en-US/firefox/149.0/releasenotes/

Thanks, Mozilla!  :D 

Oil prices diverge, megacaps break support

Disclaimer:  Nothing in this blog post or in any other blog post should be construed as personal investment advice.  It's for my own entertainment only.  If you want investment advice, hire a financial advisor.

 

Normally, West Texas Crude and Brent trade within a few bucks per barrel of each other.  In times of supply disruption, though, that difference can widen.  We're seeing that right now.

Early Thursday morning, the spread was about 18 bucks.  It has since narrowed a bit, but it's still wider than usual.  It's currently between 13 and 14 bucks. 

Here's a chart that shows the ratio of the two petroleum products:

 

As you can see, this Iran stuff sent the ratio careening.

So what does this mean in practical terms?  Good question.  A case can be made for both higher oil prices and lower oil prices.  I'm undecided.  The past two times the ratio spiked like this, it was the result of military action--last summer's campaign against Iran and the Russian campaign in early 2022--and the price of oil headed steadily down after the brief spike.  Then again, the oil trade wasn't as imperiled in those conflicts the way it is in this one.  So again, I don't know.

Now let's look at the stock market.

The S&P 500 has broken support.  It closed below its 200-day moving average.  The 50-DMA is still above the 200, so we haven't had a bearish crossover yet, but the breaking of the 200-DMA support line isn't a good omen for the megacaps.  I say "megacaps" because the equal-weight version of the index is performing better and is still above the 200-DMA.

Here's the megacap-concentrated S&P:

 

As you can see, the slow stochastic is in oversold territory, and the RSI is close to being in oversold territory.  Even if we're on the cusp of a new bear market, I wouldn't be surprised to see some consolidation at around this level before heading further down.  And, of course, the index could rebound and head back up as it did the previous times it was oversold.

Here's the equal-weight version:

 

In this index, there's still a bit of room before reaching the 200-DMA.  The oscillators show pretty much the same thing they do in the other one.

Some sectors, such as energy, are currently showing the opposite: they've gone to the moon recently, and they're in overbought, not oversold, territory as indicated by the oscillators.

In summary, I'm not sure where we're going from here, and I suspect a lot of traders are keeping a close eye on geopolitical events for guidance.  As long as there's uncertainty in the Persian Gulf and the global oil market, stocks will probably see some whiplash.

Firefly sequel series?

Well, it's semi-official: Firefly is on the verge of coming back.  All it needs is a network to host the episodes, from what I understand.  (Disclaimer: I'm not in the industry, so I'm not an expert about the process involved in getting a show on the air.)

https://ew.com/firefly-cast-to-reunite-for-animated-series-revival-11926552

At this year's Awesome Con, the actor disclosed that an animated Firefly series is in advanced development at 20th Television Animation, and it will bring the original cast back together. 

It will apparently take place between season one and the movie, so Wash will presumably be in it (which I fully support, even if the new show took place after the movie and they had to retcon him back in).

An animated series is a good idea, I think.  Probably the best way to go given the age of the actors and the desire to bring Wash back.  I agree with the animation decision.

I just hope it doesn't suck.  We all hope it doesn't suck.  Unfortunately, the IP is owned by Disney, and that's not encouraging given their performance in recent years, so we'll have to get lucky on this one.

But whatever happens... you can't take the sky from me!

 

ADDENDUM:  I just had a thought.  You know what would be cool?

Rotoscoping.

That way, the fans who prefer a live action series would essentially get it, but we'd also have the benefits of animation.  Best of both worlds.

I know this will never happen.  No one does rotoscoping anymore.  But a man can dream.