More and More Crude

gas pricesDespite massive deflation in most every consumer demanded product (housing, cars, commodities, food), crude continues to find ways to climb higher. Crude futures top the $70 mark again, which as a result, does not weather well for the consumer. All beaten down consumers need now, is increasing oil prices to boost up the price of gas and rob them more of their discretionary income. We already know consumer credit is down with record rates, saving rates are record high, and income is getting less and less. With increasing oil prices, there will be no more money left to circulate in the actual money supply, thus boosting the overall economy. I can only see this recent blast in crude prices lasting for a very short period. We saw oil futures get massively manipulated in 2007 and 2008, so we should not forget its easy vulnerability.

Volume remains critically low in market trading today as investors are finding it difficult to find things to buy these days. I don't expect volume to remain low for very much longer as we are heading into the busy season for hedge funds and Investment Banks. Considering that 200,000 jobs are still getting slashed every month, I don't see consumer income improving anytime soon. Thus, continued struggles into 2010.


  1. Anonymous Says:

    If you look at this chart:, volume today is not as low as it was during the last couple of days. Volume has started picking up yesterday and today.

  2. Finance Fanatic Says:

    That's true, last week we suffered the lowest volume that we've had the entire year. Volume should begin to pick up, but at its current low, it is still well below the average.

  3. Anonymous Says:

    FF Is it possible that the bearish outlook on the economy is what is keeping the stock rally going? The big money is buying.. Traders are stepping in on any pullback.. the difference between now and a year ago in regards to the markets is then investors/traders were looking for any rally to sell into. I beleive everyone who wanted to sell is gone. Today there are no sellers, just buyers, and what is worse is that there is buyer appetite regardless of news events and even more when the markets go down. We have a fundamental change that does not care if the economy is getting better or not.. Could all of these investors/traders be wrong and you be right? I wonder.

  4. Lin Lin Says:

    If the traders and big money is really buying in, then wouldn't the volume be high? Makes sense doesn't it? What are you basing your information off of? You know for a fact most of the traders and funds are buying like crazy? Or you just making assumptions based on what a few traders told you?

  5. Anonymous Says:

    FF, This is my first post on your site. how much longer will the government/JPM/GS be able to prop up this market? My guess is indefinitely if they contiinue to print money and funnel it into the market. I've lost my life savings over the past months (investing in FAZ, SRS, and SPY puts) since S&P 800. I really thought we'd get another leg down, or at least some chop, considering this was supposed to be worse than the great depression. Now I'm having trouble sleeping at night because I feel like a complete fool. Not sure what to do now...

  6. Finance Fanatic Says:

    I agree that the lack of volume suggests that there isn't a mass amount of buying that it would see due to the continual buying. One thing is true, sellers have also left, mostly due to fear of govt intervention and manipulation.

    As this economy continues to pound on consumers more forced selling will continue. Also, the extreme increase (almost 32 times the average amount) of insider trading (companies selling their own stock) makes me nervous that many feel their stock prices are inflated.

    Anon- The past 5 months have not been good for bears playing the short side. I too have suffered losses on many of the leveraged ETFS but have also had success with them in the prior months. Also, I was able to make some money on the long side earlier on in the rebound. For me I try to always trade with stop losses and hedges. There's not much I can say other than many people are in the same situation. I wish you guys the best in your trading.

  7. Anonymous Says:

    Lin Lin. The bottom line, the volume is bigger than you think..ETF volume does count and that is distorting the old ways of measuring volume on the exchanges..How do you think the market has rallied this long if there was no buying power behind it. The biggest problem for bears is there are no sellers.They have sold and are on the sidelines slowly coming back in. We got overkill last fall and spring. It will take a cataclysmic event or some major (NEW) fear to change sentiment, not the same old we already know. The Market does not care about what we already know. Good Luck


    Crude is not in short supply.