Summer Run-up in Crude Oil Prices - Parts I & II

By D. R. Barton, Jr.

Part I

During the insane summer run-up in crude oil prices, I did a series of articles on the inevitability of a crude oil price pullback.

Who knew that it would be this hard and this fast?

I'd bet that if we asked 100 oil business execs and oil analysts in June if crude could be trading in the 50s in less than five months that 100% of them would have said, "No way." And then they would have looked at us like we had just suggested a plan for immediate peace in the Middle East. Or a way for the Cubs to win the World Series.

Yet here we are, $57 and change with price in a downward spiral.

Why the monstrous drop? Is it the demand drop that everyone has been talking about this morning? Demand has fallen at least 1.3 million barrels per day globally (that estimate seems very conservative to me; crude supply and demand numbers are notoriously fudged because most of the world's output is controlled by central governments). But with the OPEC countries producing around 30 million barrels per day, that certainly can't be the main reason for the 60% drop in crude prices.

How about the fact that the U.S. dollar has strengthened considerably in the last few months as currency has undergone a "flight to quality"? Here's a weekly chart of the US Dollar index.

See charts at oneminutetrader.com

It's plain to see that the dollar is at its highest point since the spring of 2006. But in this index measuring the dollar against a basket of U.S. trading partners' currencies, the dollar is only up 17% in the last few months. So while this certainly plays a part in the dropping price of crude oil, it is not the major reason for fall. To drive home that point further, let's look at the price of crude denominated in another hard asset- gold.

See charts at oneminutetrader.com

Back in June, I highlighted the fact that an ounce of gold would only buy 6.5 barrels of oil - a multi-decade (if not all time) low. How is that ratio playing out now? I'm glad you asked, since I just happen to have a chart handyChart available at oneminutetrader.com

This month, gold has been able to buy almost 13 barrels of oil at the ratio's highest point. That's a huge jump of 50% in a short time. But since both commodities are denominated in dollars (and both have had steep price pullbacks in the last five+ months), this chart shows that oil's price has dropped twice as fast as gold's.

So if neither the drop in demand nor the strengthening dollar tells the whole story, what else adds to the case for dropping crude oil prices?

Read on to Part II as we build the rest of the case for crude oil's big drop. (Here's a hint: don't expect the prices to stay on this severe downward course for long. We're already due for a reaction to the upside.)

Part II

Driving home from the airport yesterday, I paid $1.84 for a gallon of gas. I felt like I was in a time warp. These are gas prices from back when the Yankees had a good baseball team

Just a few short months ago (during the summer), gas prices were shaping up to be THE defining issue of the presidential election. Then the credit markets crashed and the health of the broader financial system quickly pushed crude oil and gas prices down and pushed news about the cost of filling a gas tank off the front page.

The drop has been amazing - here is a chart that I really like. The source of the data is the Department of Energy weekly survey. Take note of the time scale for the graph; it is very compressed and shows over 40 years of data. This is important because you'll see that the incredible gains that took many years to get us up above $4 per gallon were erased in a matter of a few months.

See Chart at oneminutetrader.com

I'm sure very few people are overly sad about the drop in gas prices (and now heating oil prices). In fact, this huge drop has helped ease the pain of the financial woes brought on by the credit crisis.

And oil prices continue to drift lower, with crude oil futures trading as low as $53.66 per barrel - down more than 65% from the July highs.

In Part I, we talked about the part that weakening demand and the strengthening dollar have played in the drop in oil prices. But few people have talked about the bubble-like ascent of prices. There a was an oil bubble and its end was like that of any other bubble. Technical and sentiment indicators were screaming, "Overbought! Overbought!" right up to the top.

So, yes, demand and dollar valuations did help drop oil prices - but they only account for a part of the fall. Most of the fall can be explained in this way - when bubbles burst, buyers flee. And prices drop harder and farther than could ever be expected. Next week, we'll look at some of the technical analysis and sentiment indicators that signaled a bubble.

But for now, the crude oil market is getting very oversold - the pendulum has swung the other way. Here's a chart that illustrates the point:

See chart at oneminutetrader.com

The notes in the chart highlight the key points: Momentum indicators are divergent at current price levels, including my favorite Chaikin Oscillator, which shows that money is not flowing out of this instrument as fast as it was a couple of weeks ago. In addition, we're staying way oversold on the stochastic and volatility is clearly decreasing.

It's a tough bet to say there's a lot of downside left in crude oil in the near to intermediate term time frames. A rounded bottom or a fairly violent spike up would seem quite likely from here. - 16586

About the Author:

D.R. Barton's passion for the systematic approach to the markets and lifelong love of learning and teaching investors stock market trading have propelled him to the top of the investment and trading arena. See live events scheduled at: Smart Trade Pro - Stock Market Training Seminars

Making money to escape the rat race, 5 ways to help quit your job

By Hayley Weatherburn

"Working 9 to 5, it's a way to make a living", Dolly Parton sang these words and are true - but is it the ONLY way to make a living. What would you do if you had passive income to support you - would you still be doing the job you are doing? Or would you be out with the family, travelling or buy that new house you dream of? Life is for living, so why not give it ago! What would you do if someone gave you 5 starting points to achieve this - would you consider aiming to live your life?

5 options to mull over and weigh up which will be your vehicle out of the rat race:

PROPERTY - Although the media tells us otherwise, now is actually a good time to buy property. Often the prices are cheaper and value will eventually rise (as it has after every other economic crisis). Make sure you do the research, talk to people who are also buying property now, and read up. A great book to read is "0 to 150 properties in 3.5 years" by Steve McKnight. These are many different ways to invest in property and this book covers a lot of them.

STOCKS - Ouch - you mean now, when it seems so volatile. All i can say to this is read the article "Buy American, I am" in New York Times, by Warren Buffet. One of THE most successful investors in the stock market and he is investing - he must know something. Again research, speak to other brokers and investors and find what is best for you! Right now could be your chance to shine in this area.

TURN YOUR IDEAS INTO A PROFITABLE BUSINESS - Can't find a business out there that suits you - why not start your own? Everything you can see around you, all started in someone's imagination first. Or maybe you see a business that could run ten times better, start that. Although it may be hard at first, if you truly are passionate about your business it won't seem like work. Another thing to consider is to actually make sure your business can run without you - therefore giving you the freedom you are striving for. The best book I know that can ensure you do this is called "The E-Myth" by Michael Gerber

FRANCHISES - A proven money making system - what better way to move forward. Research your franchise of choice, ensure it aligns with your beliefs and values, and most importantly will give you the freedom you are originally leaving the rat race for. Most franchises will need a certain outlay of your own money; however it might be easier to get a business loan for a franchise, than your own business.

HOME BASED BUSINESS - now a day with the internet easily available anywhere and phone coverage is wide and cheap - a business can run from almost anywhere. These businesses are ideal for those stay at home parents. Also for those people who want to be able to travel with an income, or even just those that want to live their own lifestyle and fit the business around that. There are A LOT of home based businesses around these days, it is a good idea to find out all you can about the business, research them more on the internet, check they are legal and then once it fills your criteria of creating a lifestyle you want - then go for it!

So where to start from here? I would look within, listen for your internal voices - one of those options will feel more comfortable than the other when you imagine yourself doing it. Start with that one. If that doesn't end up being, try the next one...and the next. It will get easier as you determine what is right for you and then you will be living the lifestyle you choose. - 16586

About the Author:

Hayley Weatherburn is an Entrepreneur Coach who works in her own self-help home based business. Hayley enjoys helping others succeed in their financial goals whether it through coaching or her opportunity for entrepreneurs.

Banking For Average Businesses

By Ada Denis

Beginning a new business is a disheartening task, not least because of the financial systems you have to set up including your business concern finance systems. There are many parts to your business finance. It doesn't issue what size the business is there is still a degree of complexity. We even so are concentrating on the smaller businesses and the financial demands settled upon them. The propose of this article is to offer some assistive ground info, which we trust will prove useful.

The characters of finance accessible to limited businesses is stunning similiar to that accessible to the personalised person. Financial institutions will offer the everyday banking applications programmes such as job up-to-date accounts, job credit cards, business loans and mortgages.

One notable dispute however is that the charges lean to be last and the conditions tighter for business products over personal ones. The majority of banks will offer a full range of products and have given departments and personnel in place to assist you and your business.

Online business banking is especially remarkable to the small business, especially for those business people who are continually on the move. Previously a small business man or women would be forever in and out of the local subdivision of their bank to either cash cheques, pay in recieipts, arrange overdrafts or finance. With the reaching of online banking and the availableness of the web, it is now easy to control the finances of the company at any time of day and any place. The days of consuming time in the banks, which would be better applied running the business, are gratefully in the past.

Financial institutions careful value business clients very highly. As a issue they are very rough when comes to teasing new business clients. New businesses are particularly winning and banks will often check very good deals to advance the startup endeavours as once they have the custom they are in a good position to retainit. It is always wise to shop around and talk to many another banks to find the best deals on offer.

Consider not only the rates for new business, but also how the current customers fair when compared to other banks. This will give you a good idea of the long term competitiveness of an existing bank. There are several internet comparison engines that can get you started on this process. - 16586

About the Author:

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What Is Bankruptcy

By Ada Denis

Bankruptcy is a legal keeping in which people who are ineffective to pay their bills can get a strong fiscal start. The passing to file for bankruptcy is rendered by federal law, and all bankruptcy subjects are cared in federal court. Filing Away bankruptcy is a way to instantly stop all of your creditors from challenging to collect debts from you, at least until your debts are medium-size out according to the law. Which means if you are receiving a lot of nasty phone calls, they will point.

Bankruptcy can make it achievable for you to extinguish the legal duty to pay most or all of your debts. This is called a discharge of debts. It is planned to give you a new fiscal start.

Bankruptcy can stop foreclosure on your house or mobile home and render you the chance to catch up on dark payments. However, bankruptcy does not mechanically reject mortgages and other liens on your property without payment.

It can keep repossession of a car or other property, or force the creditor to return place even after it has been taken back.

It can also stop wage garnishment, debt aggregation harassment, and like creditor activenesses to receivable a debt. Restore or prevent final result of base service. Allow you to take exception the necessitates of creditors who have trusted fraud or who are other trying to pull in more than you truly owe.

But bankruptcy cannot determine every financial trouble. And it may not be the fine course of processed for you. In bankruptcy, it is normally not potential to get rid of particular rights of "secured" creditors.

Bankruptcy also cannot discharge certain types of debts singled out by the failure law for remarkable handling such as child supporting, alimony, some student loans, court regaining orders, unlawful fines, and some taxes.

Protect cosignatories on your debts. When a comparative or friend has cosigned a loan, and the consumer releases the loan in bankruptcy, the cosigner may still have to reward all or part of the loan.

Unique types of bankruptcy include:

Chapter 7-which is best-known as straight or settlement bankruptcy. It needs a debtor to give up property, which outperforms certain limits called freedoms, so that the property can be sold to pay creditors.
Chapter 11-which is acknowledge as reorganization, is used by business and a few individual debtors whose debts are very large.
Chapter 12-is engaged for family farmers.
Chapter 13-is called debt adjustment and it requires a debtor to file a plan to pay debts or parts of debts from live income.

In bankruptcy, as in all spheres of life, retrieve that the person promoting the cheapest rate is not needfully the best. Many of the best bankruptcy attorneys do not promote at all. - 16586

About the Author:

Finance Ideas House Bridging Finance at Low Interest Rates

Drop me in a new city and tell me to buy a good real estate deal

By Jesse Davis

If someone dropped me in a new area and told me to find a good real estate deal in about 3 hours, here is what I would do.

The gurus tell you to do lots of marketing and make lots of offers on houses, and you can do that if you have time. But if I wanted to find a deal fast, the first thing I would do is find the local real estate wholesaler.

Not just any wholesaler, because there will probably be several if you are trying to invest in a large market. What I would look for is the Big dog wholesaler. The one who is moving more properties than anyone else. Look for the wholesalers who are purchasing and selling five to ten properties per month. They will be true wholesalers.

A true real estate wholesaler marks up a deal a few thousand dollars and goes to the next deal. Unlike many courses and real estate gurus who talk of making 10, 20 or even 50k on a deal. They are not true wholesalers. They are flippers.

Flippers make home runs. They find a property and mark it up quite a lot and make a killing one deal. These will be the guys that do one or two deals a month.

The true wholesalers will not make much money on each deal, that is why investors will be buying from them over and over again because they know they are getting the best deals.

In short, devoting a lot of time and money trying to learn how to find real estate deals in my opinion is a waste of time. I am one of the big dog wholesalers in my area and, after thinking about how I do business, I realized that before I became a wholesaler I wasted a lot of time and money learning how to find deals. It does pay off if you want to be a wholesaler but if you are just trying to flip a deal or build a rental portfolio it really does not make sense trying to find better deals than me because you will not be able to do it.

If you want to find great deals super fast then use the local wholesaler. It is like having a buyer on your staff that is doing all the legwork for you. The time and money that is saved by using their expertise is more than worth the mark up you will pay.

Where do you go when you want to buy something nowadays? Wal-Mart, Target, all of these stores are actually large wholesalers. They buy in bulk and then pass the savings on to the consumer. That is what the local wholesaler does in your real estate investing. - 16586

About the Author:

The author, Jesse Davis is an experienced wholesaler in the Jackson, Mississippi, Real Estate market. He has wholesaled over 80 properties this year alone, and he teaches a seminar on how to really be successful in today's market. Go here to learn how to find all the buyers you will ever need to build a massive monthly income in Real Estate today

Forex Robot Software - Ideal For Any Forex Trader

By Richard U. Olson

The last time I checked, there were a multitude of different options for automated Forex trading software out there. Of course, all of these manufacturers claim that their product will bring you untold wealth. However, they can't all be right; and since I'm a born skeptic, I prefer to look at what the software actually delivers instead of relying on the claims of the makers of the software.

The first thing I noticed about automated Forex trading systems are that most of the other Forex software out there was not created by a real live Forex trader. Some successful Forex traders made a fortune in the Forex market and have put their knowledge and expertise behind their Forex trading systems.

You would be mistaken if you were to assume that you can just fire up this program and let it go and have it make you money instantly with no intervention needed. It won't do it all for you, at least not until you take some time to learn the software and set it up. However, most Forex auto-trading devices are easy enough to use that you don't need an extensive background in Forex trading to be able to use it. All you need is a basic set of computer skills.

Forex robot software makes trades based on mathematical modeling such as the Fibonacci formula to make predictions based on the past behavior of the market. The more you know about the Forex market, the better you can use the software to your advantage; but you really don't have to be an expert in Forex to get started using an automated Forex trading software.

Any successful Forex trader has to be able to assess and take calculated risks, as well as being aware of the possible consequences. Automated Forex trading software can helps you to maximize profits and minimize losses; users claim that they have a 96% profitability rate on their trades using the program.

In the long term, your profits must far outweigh your losses. Automated Forex trading software can help traders to make trades which are profitable overall, letting them make a profit over time; as you learn more about the market, the better able you will be to configure the Forex software to make the trades which will bring you a healthy profit, ensuring your success in the world of Forex trading online.

If you are new to Forex trading, you'll be glad to know that most Forex robot software offers a demo mode, where you can test out the software and learn how the market operates without putting any of your money at risk. Once you feel comfortable with the markets and have tuned your Forex auto-trading device for the best performance, you can then start making real Forex trades at any time.

Check out that the automated Forex trading system also comes with an 8-week money back guarantee. If the software doesn't work for you, you lose nothing.

Forex Autopilot system currently leads the automated Forex trading software industry. Created by a successful Forex trader and offering features which benefit newcomers and experts alike, this is a solid choice. - 16586

About the Author:

Richard U. Olson recommends the incredibly accurate Forex Robot Software that he uses to make consistent profits in the Forex markets. Grab his FREE e-course on Forex Trading Tips to realize your financial dreams.

Tips To Keep Your Money From Going Up In Smoke

By Ada Denis

Who do you know that has money they can just allow to drop off away as if it never survived? Chances are you do not know anyone and it likely for sure would not you if you did. Today it is more remarkable than ever that we make every single cent count for something because we just do not have any extra ones to let go of. The best way to make the good most of the money you have is by making sure you can account for where every dime goes and this is spent on something precious and never gone.

If you suppose that that sounds like you, you are likely right. It does need movement and close attention on your part every time you are going to let that money out of your pocket for anything. Two of the strongest amounts of money we pass are for hire or mortgage payments and then everything else. It is vital that we never expend more than one third of our income on our housing because when we do it shortens into the money we have to expend on everything else.

If you are living in a place that is too big for you, either price wise or in space, take renting a room to someone or if executable finding something smaller and less pricy. This could be a rough move with the housing marketplace the way it is for sellers so this is why renting a room to someone to make money towards your mortgage or rent might be a good way to balance out that day-to-day payment without having to move.

Another place that our money goes is for usefulnesses. If you rarely use a home phone any more because you use a cell phone, get rid of the home phone disbursal. Many someones are doing this now just to save that special money. Exchange your old light bulbs with the new vigour savers that last easier. They are well worth the investment funds. Turn down your hotness thermostat and wear more dress. Energy for warming is skyrocketing every where and turning the temperature down just a few degrees will save money.

The two essentials we have to have is for nutrient for our stomachs and food for our cars. Be more such picky about the foods you buy and how much you pass. Do not use credit cards for things like groceries if you can maybe avoid it and only use them to buy car fuel if you pay the bill off at the end of the month.

Credit card interest consumes up more of your paycheck than you realise at the time. This is something that many people are learning to live without and it does save them money. If you do not have it, do not spend it. - 16586

About the Author:

Finance Ideas Financial Management