Wednesday, December 10, 2014

Heed the Red Flag Tesla Stock Is Waving: TSLA

In retrospect, a trader looking at the situation with an unbiased eye can’t be entirely surprised Tesla Motors Inc (TSLA) shares are tanking now.Although Tesla undoubtedly builds one of the coolest things we’ve seen this invented this century, “cool” and the ensuing hype can only carry Tesla stock higher for so long before the rally runs out of gas. That’s just the nature of a story stock like TSLA.
The question is, at what price might Tesla’s stock chart finally stop bleeding?
Answer: It has less to do with a rebound in oil prices than one might think.
Tesla Stock Chart Tells the Tale
All stocks ebb and flow over time, so in that regard the up and down we’ve seen from Tesla stock since 2013 isn’t particularly remarkable. On the flip side, not every stock chart often waves the same red flag that the Tesla stock chart started to wave as of last week, and is waving more fervently now.  (more)

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Interest Rates Have Nowhere To Go But Up?

Earlier this week Daniel Druger and Liz McCormick wrote an article for Bloomberg entitled: "One Hundred Years Of Bond History Means Bears Destined To Lose." The crux of the article is contained within the following paragraph:
"With the longest-dated Treasuries now yielding less than half the 6.8 percent average over the past five decades, it’s not hard to see why forecasters say they’re bound to rise as the Federal Reserve prepares to raise interest rates following the most aggressive stimulus measures in its 100-year history."
The premise here is simple. With interest rates near their lowest levels on record, they have nowhere to go from here "but up." This is the consensus of virtually all of the analysts and economists on Wall Street which currently suggests that rates will rise to 3.88% next year on the 30-year treasury.  (more)

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3 Income Plays for Cheap Oil: Calumet Specialty Products Partners LP (CLMT), Northern Tier Energy LP (NTI), CVR Refining, LP (CVRR)

Oil prices have dropped as much as $25 per barrel since the summer, which has played merry hell with energy sector master limited partnerships (MLPs) — a favorite of income investors.
Even MLPs that hedged the price of their output months (or even years) ahead have seen the value of their reserves decline.
There is one group of income-oriented companies benefiting from the oil price decline.
And I’ve identified the three most attractive investment opportunities within this select group…(more)

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VIX Spikes Over 16, Biggest 2-Day Surge In 2 Months As Credit Contagion Spreads

VIX has been unable to make lower lows as stocks made higher highs in recent weeks as it appears managers protected these insane gains of the last few weeks rather than piled in – beta-chase-style – as financial media would have us believe. VIX has broken back above 16 this morning adding to its biggest 2-day surge in 2 months and suggesting notably more downside for stocks from here.We suspect credit hedgers are spilling over into the equity protection markets as bond liquidty dries up and protection costs soar.
VIX has been warning for a few weeks that all was not well with this rally…
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Kuwait Sees Oil Stuck at $65 for Six Months Until OPEC Moves

Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp.
Oil is trading in a bear market as the U.S. pumps at the fastest rate in more than three decades and demand expands more slowly. OPEC decided on Nov. 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010. (more)

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