Richard Wyckoff – logic has rules, some folks like the short cuts, hence they wonder why their trade ends in a mess.

Previous Post: Richard Wyckoff logic not working, this maybe why?
Part 1

“Without specific, clear, and tested rules, speculators do not have any real chance of success.” ~ Jesse Livermore

“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.” ~ John (Jack) Bogle

“The stock market is filled with individuals who know the price of everything, but the value of nothing.” ~ Philip Fisher

“I buy on the assumption they could close the market the next day and not reopen it for five years” and “Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.” ~ Warren Buffet

“My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.” ~ Marc Faber

More from RTT Tv

Oil prices are probably already high enough to spark a rebound in shale production.

The IEA says that in the third quarter of 2016, the U.S. shale industry became cash flow neutral for the first time ever. That isn’t a typo. For years, the drilling boom was done with a lot of debt, and the revenues earned from steadily higher levels of output were not enough to cover the cost of drilling, even when oil prices traded above $100 per barrel in the go-go drilling days between 2011 and 2014. Even when U.S. oil production hit a peak at 9.7 million barrels per day in the second quarter of 2015, the industry did not break even. Indeed, shale companies were coming off of one of their worst quarters in terms of cash flow in recent history.

That all changed around the middle of 2015 when the most indebted and high-cost producers went out of business and consolidation began to take hold. E&P companies began cutting costs, laying off workers, squeezing their suppliers and deferring projects that no longer made sense.

By 2016, oil companies large and small had shed a lot of that extra fat, running leaner than at any point in the last few years. By the third quarter, oil prices had climbed back to above $40 and traded at around $50 per barrel for some time, replenishing some lost revenue. That was enough to make the industry cash flow neutral for the first time in its history.

That suggests that moving forward, the shale industry could move into cash flow positive territory. Oil prices seem to be trading safely above $50 per barrel for the time being, and OPEC cuts could induce more price gains. The industry is now focusing on shale plays that have lower breakeven prices, namely, the Permian Basin and some parts of the Bakken. That has companies like Concho Resources, Murphy Oil, Devon Energy, Pioneer Natural Resources and EOG Resources all stepping up their spending levels heading into 2017.

Wood Mackenzie suggests that $55 per barrel is a sweet spot for the oil and gas industry to rebound, a level that is only slightly above today’s prices. At $55 per barrel, the shale industry is cash flow positive and will grow accordingly. “If we stay (at $55 a barrel), the world’s biggest oil companies start to make money again. If we go back down to $50 (or lower) in 2017…then those companies are in the negative territory and they go back into survival mode where they have been in the last two years,” Angus Rodger, WoodMac’s research director for upstream oil and gas, said in a report. He estimates that OPEC’s cuts could succeed in pushing oil prices sustainably up to $55 per barrel. Even taking into account some cheating, WoodMac concludes that a 75 percent compliance rate with the promised cuts would get the markets to that price level.

Still, the seeds of disappoint have already been sown – it is just a question of whether or not they will sprout. The U.S. dollar is at its strongest level in nearly a decade, which will weigh on global crude oil demand. Also, hedge funds and other money managers have staked out the most bullish positionon oil futures in more than two years. That has succeeded in running up prices this month, but it also sets up the market for downside risk. Should data emerge in the coming months that some OPEC members are cheating, the net-long positions could unwind. Those liquidations tend to happen quickly, so a sharp fall in oil prices is not out of the question.

“If confidence around the compliance with cuts wavers, the market will necessarily correct lower, considering that it also faces the twin headwinds of resilient U.S. production and a stronger dollar environment as the Fed begins to hike rates,” Harry Tchilinguirian, an analyst with BNP Paribas, told S&P Global Platts.

And while the financial markets present risk, the physical market is also up in the air. Of course, OPEC cheating is a possibility. But with U.S. shale producers already stepping up drilling, production could come back quicker than many expect. Weekly EIA data shows gains of nearly 300,000 bpd since the end of summer. On top of that, disrupted output from Libya and Nigeria – two countries not subjected to the OPEC cuts – could begin to come back. An oil tanker docked at Libya’s largest oil export terminal, Es Sider, this week, was the first tanker to load up Libyan oil from that terminal in more than two years. Libya hopes to add another 300,000 bpd in output in 2017 after adding as much in 2016.

Even with those negative risks in mind, the shale industry is getting back to work. If oil prices can stay roughly where they are right now, the industry could become cash flow positive for the first time ever next year.

Link to original article: http://oilprice.com/Energy/Energy-General/US-Shale-Is-Now-Cash-Flow-Neutral.html

By Nick Cunningham of Oilprice.com

To be a legitimate market sector, you must have a benchmark to measure what qualifies as under- and over-performance.

A large debate that has grown in investing circles during recent decades is the ability for professional investors to provide “alpha” rather than simply “beta.” That they are adding value rather than just collecting the value provided by the broad market or a specific sector. Legitimate market sectors draw investors and those investors are being asked to prove their value not only versus the broad market but versus the particular sector or strategy group they are involved in. 

So, if an emerging industry is going to attract professional investors, it will be asked to measure its performance versus a benchmark. The Marijuana Index, which is owned by MJIC, tracks the performance of the legal marijuana industry. This includes companies that directly handle legal marijuana, such as marijuana producers, processors, distributors and retailers. It also includes companies that don’t directly handle plant product, but cater to those who do, as well as to consumers. These “ancillary” businesses operate in a wide range of industries such as consumption devices, product packaging, information technology, equipment, business services and more, says Dan Nicholls, vice president at The Marijuana Index. “Our definition of marijuana includes all forms and applications of the marijuana, cannabis and hemp plant, including cannabinoids such as CBD or THC,” says Nicholls, adding that it does not, however, include activities related to synthetic cannabinoids.

MJIC breaks down the Marijuana Index into three indexes: The North American Index, American Index and Canadian Index (see “One plant, 3 indexes,” below). Currently there are 23 stocks in the overall index, 13 American and 10 Canadian (see “The roster,” below). MJIC recently reconfigured the index based on specific criteria. “The start of this year we revamped the index, putting in place strict eligibility criteria,” Nicholls says. 

….much more analysis and charts HERE

…related, Mark Leibovit was in on Marijuana at the very bottom and recently took “Monster Profits”:

Commodities are known as the raw materials for production processes. Investing in them provides investors with exposure to unique factors that historically have brought diversification and inflation hedging benefits to traditional portfolios. Nowadays, ETFs have expanded the availability of commodity investments providing exposure to single commodities and commodity-linked indexes. At the same time, ETFs have exposed investors to a new set of risk factors that may be unfamiliar to the average investor.

This channel is designed to help you understand commodity ETFs, how they work, how they are built, their risks and their rewards, so that you can decide if commodity ETFs deserve a place in your portfolio.

…look at the complete list of ETF’s and their performance HERE

…related:

Canada’s Oil Exports Would Be Dead Without U.S. Shale Production