Newtonian physics: Oil heads back down, Wall Street follows

Newtonian physics: Oil heads back down, Wall Street follows

Big oil inventories reported today, tank oil, oil stocks and markets after yesterday’s big rally. No winning in this market unless you’re a good day-trader.

Blake's Newton and Apple.
Blake's interpretation of Newton the Mathematician is about to get whacked by a fresh Apple supplied by the author and Photoshop. (Images via Wikipedia)

WASHINGTON, February 4, 2015 – You win some, you lose some in this yo-yo 2015 stock market. The HFTs are having fun Wednesday driving stocks down or shorting them after yesterday’s massive rally. Like Newtonian physics, what goes up in this market is bound to go down.

The reason: looks like oil inventories are up big time, meaning that the tsunami of surplus crude, courtesy of all those fracking-good wells in the Bakken, Eagle Ford and Marcellus shales are still doing their job, lowering our prices at the pump dramatically even as the Saudis continue to pump away.

From yesterday’s highs around $52 per barrel of West Texas Intermediate (WTI), prices are down a full 8.7% or so as of this writing, sloshing around at roughly $48.71 at the moment (3:00 p.m. EST).

Naturally, more or less everything else is getting whacked again in the broader market, regardless of business line, save for the Big Cap Dow, which, paradoxically, is up 52 points. Go figure. Maybe the HFTs figured they’d banged these big guys down badly enough.

Frankly, neither the Maven nor any of the advisory services he subscribes to can figure this market out at all. Ultimately, it seems to be in a manic-depressive mood, depending on certain certainties and then dashing them the next day.

We are simply going to stay in our positions today, including our sneaky little forays into the oil patch via oil ETF USL, which is still up for us believe it or not. We remain in our near-term preferred stocks, which behave like bonds. And we are hanging onto a few ETFs and REITs. But that’s about it.

Tech and biotech are getting hammered, but we’re staying there as well. The whole picture out there is nonsense. So we’re going to grin and bear it, patiently hold onto most of our high-yielding stocks, and grit this out. It’s frustrating.

But that, from time to time, is exactly what Mr. Market likes to do: scare out the weak hands, and then rally big time when all hope is lost.

It’s days like this that you have better odds feeding quarters into Vegas slots.

Relax and have a good one. Let’s let Wall Street’s theater of the absurd continue for now.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17