Talking Stocks 2.0

[beshannon]

Originally Posted by blown5.0

With the "collapse" of oil, has anyone looked into USO?

Why?

[Doc Savage]

Originally Posted by blown5.0

With the "collapse" of oil, has anyone looked into USO?

I have been watching the major oil ETFs, especially USO, but I'm not going to buy yet. Oil storage is at capacity, and consumer/business demand has to increase significantly before that improves. Only then can we expect USO to stabilize and move up, imo. Of course, lots of people are waiting for the exact same thing, so the key will be to get in early enough to avoid chasing the price, but not so early that you ride it down first. The classic Wall Street conundrum.

[gnuyork]

Originally Posted by beshannon

Why?

you scratch your head an awful lot...just an observation.

[Kowaco]

Originally Posted by Doc Savage

I have been watching the major oil ETFs, especially USO, but I'm not going to buy yet. Oil storage is at capacity, and consumer/business demand has to increase significantly before that improves. Only then can we expect USO to stabilize and move up, imo. Of course, lots of people are waiting for the exact same thing, so the key will be to get in early enough to avoid chasing the price, but not so early that you ride it down first. The classic Wall Street conundrum.

Looks like USO trading
was just halted


Sent from my iPad using Tapatalk

[cornerstore]

Originally Posted by Kowaco

Looks like USO trading
was just halted


Sent from my iPad using Tapatalk

USO
2.55
-1.20 (-32.00%)As of 2:52PM EDT. Market open.

[RyanO]

Originally Posted by Doc Savage

I have been watching the major oil ETFs, especially USO, but I'm not going to buy yet. Oil storage is at capacity, and consumer/business demand has to increase significantly before that improves. Only then can we expect USO to stabilize and move up, imo. Of course, lots of people are waiting for the exact same thing, so the key will be to get in early enough to avoid chasing the price, but not so early that you ride it down first. The classic Wall Street conundrum.

The USO fund might not be around much longer at this rate. Trading halted for what I believe is the second time today.

[EEpro]

Originally Posted by RyanO

The USO fund might not be around much longer at this rate. Trading halted for what I believe is the second time today.

At least it can't go below zero.

[acrds1]

Can anyone explain to me why CVNA is up today? Is it time for a short?

[m j b]

Originally Posted by blown5.0

With the "collapse" of oil, has anyone looked into USO?

I did.

Originally Posted by gnuyork

you scratch your head an awful lot...just an observation.

Dandruff?

Originally Posted by RyanO

The USO fund might not be around much longer at this rate. Trading halted for what I believe is the second time today.

Interesting article on USO and how it was originally designed for people who trade the actual commodity, but now retail investors (us) are getting into it and have no idea what they are doing...

Originally Posted by EEpro

At least it can't go below zero.

Yes, but because of how it's structured, it can be called at any time. Which means that it could trade at zero, and before you can wait for it to recover, the issuer can pay you market value for it. Seriously.

Originally Posted by acrds1

Can anyone explain to me why CVNA is up today? Is it time for a short?

This makes no sense. They have no earnings, they can't be selling much now since no one is driving to work, and it's nearing its earlier highs.

I like their business model and I think it's a neat way to buy a car, but I'm not getting anywhere near the stock at this price.

I don't have a linkie, but here's the text of the article on USO:

3:01 PM ET 4/21/20 | MarketWatch
Related Quotes


3:47 PM ET 4/21/20
Symbol Last % Chg
USO
2.86 -23.87%
Real time quote.



By Andrea Riquier

Are there certain financial instruments that should be off-limits to ETFs?

The gyrations that have gripped financial markets for the past several weeks just caught up with the oil sector, taking many investors along for an unexpected ride.

On Monday, as oil markets crashed through the floor, the United States Oil Fund LP(USO) , an exchange-traded fund (http://www.marketwatch.com/story/wha...etf-2019-10-09) that tracks the futures markets to give investors direct exposure to the oil price, tumbled 12%. On Tuesday at midday, USO was down another 30%, taking its loss over the course of its 14 years in existence to about 96%.

Many investors in USO are likely new and the ETF has seen huge inflows in recent weeks as oil markets have churned, propelled by bets on global deals on production cuts (http://www.marketwatch.com/story/sau...wsj-2020-04-09) to stabilize prices.

Read:Why oil prices just crashed into negative territory -- 4 things investors need to know (http://www.marketwatch.com/story/why...now-2020-04-20)

ETFs are often popular vehicles for institutional investors or professional traders who want to sell an investment short, or use it to make a bet that the price of an asset class will decline. But only about 13% of USO's float was held by traders with short interest in the fund, according to Ihor Dusaniwsky at S3 Partners.

Given its wide availability on retail brokerage platforms and its popularity among one of the industry's biggest robo-advisors (https://robintrack.net/symbol/USO), ETF professionals believe many of USO's recent entrants were retail investors, and the scope of this week's rout was likely a rude awakening.

"I would argue that you should not be investing in this if you are not allowed to invest in the underlying assets," said Dave Nadig, chief investment officer and director of research at ETF Database.

In the case of USO, trading on those underlying assets -- futures contracts on oil prices -- is available only to investors who have been granted permission. One of the articles of faith of ETFs, of which Nadig has long been a proponent, is that they democratize finance (http://www.marketwatch.com/story/bar...nce-2020-01-30) by making it possible for all investors, even individuals, to trade otherwise inaccessible assets, like gold. But, he said, that shouldn't be the case here.

Because of the upheaval in the oil markets, USO in mid-April decided to stagger its exposure to oil prices by investing in different contracts spanning subsequent months. On Tuesday, with markets in freefall, it smoothed that exposure even more: the fund will invest approximately 40% of its portfolio in crude oil futures contracts for June, approximately 55% of its portfolio in contracts for July, and approximately 5% of its portfolio in contracts for August.

"In addition, commencing on April 22, 2020, USO in response to ongoing extraordinary market conditions in the crude oil markets, including super contango (http://www.marketwatch.com/story/oil...and-2020-04-17), may invest in the above described crude oil futures contracts on the NYMEX and ICE Futures in any month available or in varying percentages or invest in any other of the permitted investments described below and in its prospectus, without further disclosure," the issuer said in an SEC filing announcing the changes (https://www.sec.gov/ix?doc=/Archives...262_uso-8k.htm). "Significant tracking deviations may occur above and beyond the differences described herein."

It takes about two weeks for USO to "roll" its contracts, or shift its assets to later-dated ones, a process well-known to institutional participants in the marketplace, Nadig noted. It's important to note that on Monday, when the previously unthinkable happened and May contracts for West Texas Intermediate crude oil went negative, USO had no May exposure.

But it's just as important to realize that despite USO's popularity among retail investors, it follows the technical processes of a financial market that may seem arcane even when it's not in chaos. On Tuesday, trading in the fund was briefly halted as its share in the underlying markets breached the threshold allowed by regulators.

Related:Here's the right way to trade ETFs (http://www.marketwatch.com/story/the...tfs-2019-10-24)

"If you run into a mechanical sell provision because you did not read the fine print you deserve to get hosed," Nadig said in an interview.

"Putting the ETF issue aside, what we have been discovering nearly every week since March is where all the pain points in the system are," Nadig said. In a world so awash in oil that the industry can't figure out where to put it (http://www.marketwatch.com/story/the...one-2020-04-20) all, "it's not surprising you're seeing the front month going negative," he added. "USO investors are arguably doing better than guys with tankers."

See:ETFs behaving badly: 'exactly what they are supposed to do' or 'just what we feared'? (http://www.marketwatch.com/story/her...-it-2020-03-27)

-Andrea Riquier; 415-439-6400; AskNewswires@dowjones.com

> Dow Jones Newswires

April 21, 2020 15:01 ET (19:01 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

[cornerstore]

They gave it good try on the tapes today but gravity took over.

[acrds1]

I have the same view on the stock (CVNA) they are loosing over 1-million dollars a day. It could be an excellent time for a short, the more I look at this company the more red flags I see starting with this fine gentleman Earnst Garcia II..

https://www.forbes.com/sites/nathanv.../#448e08806d3f

[Doc Savage]

Jim Collins at Forbes has a good article today (and another good one yesterday) discussing how USO dominates oil futures pricing. He lays it out pretty well for those not as experienced with the futures markets.

https://www.forbes.com/sites/jimcoll.../#6e6f8665642c

[cornerstore]

Hopefully this routing of the markets when it ends will balance out reality with cult hype . Case in point Tsla vs Toyota valuations and historical context. TSLA will not likely if ever again see governments subsidizing their business model via rebates to purchasers. Oil will be plentiful and governments will not be able to continue on the green push as greed will as always outweigh the environment. Tsla is worth maybe what Ford is worth but Ford is grossly undervalued relative to say TSLA. The smoke and mirrors hopefully are about to end. The market post 2008 is full of companies on the big boards that really are penny stocks aka pigs with lipstick. Tax rebates and accelerated depreciations are not profits from well run operating businesses but social welfare corporate handouts. Eventually values to real existing profits will matter again as hedge funds unwind and stop pumping up the balloons.

PS : the paying for growth vs earnings argument worked out eventually for Amazon after many years of losses as they pivoted their business model but that is an exception that many are taking as a template to future earnings by other so called disruptive tech companies.

[JParm]

SNAP, CMG, NFLX posted some strong earnings / subscribers (I unfortunately do not own any of these...), though probably to be expected due to the fact that COVID most likely helped these specific stocks.

Either way, could it be the positive sentiment that sends us into the green tomorrow?

[watchmework]

Originally Posted by jpeezy14@hotmail.com

SNAP, CMG, NFLX posted some strong earnings / subscribers (I unfortunately do not own any of these...), though probably to be expected due to the fact that COVID most likely helped these specific stocks.

Either way, could it be the positive sentiment that sends us into the green tomorrow?

I sure hope so...we have the continued downward trend in covid-19 deaths and cases in addition to the Senate OKing the Phase 3.5 bill working to help.

[beshannon]

Originally Posted by gnuyork

you scratch your head an awful lot...just an observation.

I am genuinely puzzled by many questions on the forum. Also, I try to encourage people to think about what they wrote. USO is not a deal because it is cheap, they just announced a 1-8 reverse split. This ETF is not for people seeking to speculate.

Small positive bias this morning, oil continues down, more stimulus coming.

Not sure the positive futures will hold but we shall see

NFLX down after earnings, T is up after reaffirming dividend

https://www.thestreet.com/markets/5-...dnesday-042220

[gnuyork]

Originally Posted by beshannon

I am genuinely puzzled by many questions on the forum. Also, I try to encourage people to think about what they wrote. USO is not a deal because it is cheap, they just announced a 1-8 reverse split. This ETF is not for people seeking to speculate.

Small positive bias this morning, oil continues down, more stimulus coming.

Not sure the positive futures will hold but we shall see

NFLX down after earnings, T is up after reaffirming dividend

https://www.thestreet.com/markets/5-...dnesday-042220

That's a much better answer than "why?" with a head scratch. We aren't all experts like you. We might have dumb questions. Or different ideas.

[beshannon]

Originally Posted by gnuyork

That's a much better answer than "why?" with a head scratch. We aren't all experts like you. We might have dumb questions. Or different ideas.

Originally Posted by blown5.0
With the "collapse" of oil, has anyone looked into USO?

I am far from an expert and when someone asks "what watch should I buy" I usually respond with a question In this case I asked why would anyone look into USO because of the oil price collapse? Some context would really have been helpful.

Ask all the questions you like, perhaps add some explanation to add to the intent

[beshannon]

Oil turned around and the futures jumped +350 now

Remember oil is being seen as the proxy for global economic recovery, that is not a good reason to buy stocks but it does drive prices in the short term. Earnings have not been worse than expected with some being better, this quarter is a throw away anyhow as will the next quarter.

I am not a commodity trader but I would not read too much into the moves in oil, they are being exaggerated by the futures and by each piece of news that whipsaws the price either up or down.

Energy may become invest able again once the smoke clears and we see who is left standing, many companies will not survive this.

[m j b]

Originally Posted by gnuyork

We aren't all experts like you.

Brian is not an expert, as he himself has noted. Neither am I, although I've been investing in the stock market since the 80s. The only "experts" you will see here, in fact, you can tell from the fact that they'll never recommend anything.

Please guys and gals, read these threads and get investing ideas from them, but do your own research and make sure that anything you buy or sell fits within your goals and your risk tolerance.

And remember, always, do the opposite of what I do.

-------------

So, aside from the long-term holdings, I went long on the market (via leveraged ETF "SPUU") on Monday, just in time for the 2.5% correction followed by the 3% correction on Tuesday. I do not like it when I lose a lot of money in a short period of time. I closed the position at a small profit this morning, leaving me with a big "phfew!" which means, of course, that the market will go up big time since I'm out of it.

OK, so seriously, I'm not out - I'm still 95% invested in my IRA, but I'm not happy about where we are and why. Specifically because there is no good "why" at this point, as far as earnings, the economy and everything else does not justify these inflated values.

[gnuyork]

I should have said "experienced as"... I know we need to do our own research, but this thread has been good for ideas collectively. I got the head scratch from Brian when I mentioned something about some day trading several pages ago. I sort of took offense to it, without knowing what my plans and goals were, as if what I was doing was wrong or stupid. I though it was a bit condescending. Day trading seems frowned upon here, but right now that's the approach I'm taking for the short term and my own reasons. So far it's been just as predicted. A Roller coaster. But I made my highest single day gain doing this days ago. I lost some money yesterday. Yes risky I know. But I can tolerate the risk for now.

[beshannon]

Originally Posted by gnuyork

I should have said "experienced as"... I know we need to do our own research, but this thread has been good for ideas collectively. I got the head scratch from Brian when I mentioned something about some day trading several pages ago. I sort of took offense to it, without knowing what my plans and goals were, as if what I was doing was wrong or stupid. I though it was a bit condescending. Day trading seems frowned upon here, but right now that's the approach I'm taking for the short term and my own reasons. So far it's been just as predicted. A Roller coaster. But I made my highest single day gain doing this days ago. I lost some money yesterday. Yes risky I know. But I can tolerate the risk for now.

I apologize if I came across as condescending.

I am an IT Systems Analyst, I ask questions, a lot of them, all the time.

I require lots of data and input to make decisions. My intent often times is to get the person asking the question to provide me with more information. Sometimes that happens, other times people just get mad at me. I am used to it.

[beshannon]

Originally Posted by m j b

OK, so seriously, I'm not out - I'm still 95% invested in my IRA, but I'm not happy about where we are and why. Specifically because there is no good "why" at this point, as far as earnings, the economy and everything else does not justify these inflated values.

It is hard to argue with the liquidity that is out there, money needs a place to go. For the short term don't fight it.

[JParm]

Too late to jump into NFLX at this point? Down nearly 4%.

[beshannon]

Originally Posted by jpeezy14@hotmail.com

Too late to jump into NFLX at this point? Down nearly 4%.

I want to own NFLX

My issues are that they themselves said their growth may not continue, they are not going to raise prices, the stock is really over valued approaching a 52 week high. Yes I know it can get more over valued, I just do not like to chase.

For me this is a situation where I say "well, missed that one, time to look for a new one" and move on.

[m j b]

Originally Posted by beshannon

It is hard to argue with the liquidity that is out there, money needs a place to go. For the short term don't fight it.

Agreed.

Sold my LB this morning. I don't have high hopes, and there's just sooooooo much negativity about retailers right now.

[m j b]

Originally Posted by jpeezy14@hotmail.com

Too late to jump into NFLX at this point? Down nearly 4%.

Up 50% in the past month, with a PE of over 90? Sure, you could chase it and hope for continued momentum, but for me the price is not justifiable.

[JParm]

Originally Posted by beshannon

I want to own NFLX

My issues are that they themselves said their growth may not continue, they are not going to raise prices, the stock is really over valued approaching a 52 week high. Yes I know it can get more over valued, I just do not like to chase.

For me this is a situation where I say "well, missed that one, time to look for a new one" and move on.

Great points - things we've thought as well, but overall I do think you're right here...

[beshannon]

I follow Tony Dwyer as his track record is good

Wait for these 3 indicators before buying the S&P 500, says Canaccord’s Dwyer

https://www.marketwatch.com/amp/stor...8-03BB51EFA6E1

So the question people should ask themselves is are they willing to wait or average down, or stay out and try to catch the bottom?

[Duey]

Originally Posted by gnuyork

I should have said "experienced as"... I know we need to do our own research, but this thread has been good for ideas collectively. I got the head scratch from Brian when I mentioned something about some day trading several pages ago. I sort of took offense to it, without knowing what my plans and goals were, as if what I was doing was wrong or stupid. I though it was a bit condescending. Day trading seems frowned upon here, but right now that's the approach I'm taking for the short term and my own reasons. So far it's been just as predicted. A Roller coaster. But I made my highest single day gain doing this days ago. I lost some money yesterday. Yes risky I know. But I can tolerate the risk for now.

Basically what is happening here, right here, is day trading and speculating in the market we are currently in today. People will try and say they're long term investors here but just go back and read a few weeks, or months, and every one will come to the same conclusion from the data they read here. It's only data it's not meant to be good or bad

And yes I've got some good advise here from people