RE:Watch oil take off this week - Brexit was overdonenumber1hit wrote:
The reaction to Brexit was overdone on the markets in general. And with LTS not selling into the Brexit panic, it's very bullish.
On Friday, the markets wanted a correction and received the costliest one to date. Trillions went to short sellers or market makers because investors panicked.
But the markets always regain composure. Especially when there is nothing to worry about. The press talks about "geopolitical shocks" but Britain leaving the EU will be as memorable as Britain joining the EU well after all the pack and with special conditions.
Markets love to overreacting. For traders, it's heaven. For investors, it's hell.
But history confirms these are short lived.
Let's review memorable buying opportunities:
Even on one of the biggest corrections, Monday, Oct. 19, 1987 “Black Monday.” Stock markets around the world went into free-fall, with the S&P 500 index dropping by more than 20 per cent by the closing bell. By January, 1989, the index had regained what was lost on that day.
August, 2011 – European debt crisis/U.S. debt ceiling debates The threats to global confidence were brewing on several different fronts that summer. An impasse in the U.S. Congress through July had seen the country flirt with default on its debt over the failure to raise the debt ceiling.
Relief over an agreement struck at the end of July was short-lived, as markets succumbed to an array of geopolitical fears, primarily the European debt crisis. Without a specific inciting event to blame, markets sold off sharply on Aug. 4.
The next day, Standard & Poor’s downgraded U.S. sovereign debt for the first time ever, stripping the country of its top AAA rating. Those two trading days saw the S&P 500 decline by more than 11 per cent. While there were many chapters yet to come in Europe’s debt saga, officials there were at least able to temporarily quell the market frenzy through emergency funding and austerity plans.
Meanwhile, political gridlock over U.S. government spending cleared up, and the S&P 500 returned to its previous highs within six months. Standard & Poor’s maintains a lowered AA+ rating on U.S. debt to this day.
Sept. 29, 2008 – U.S. bailout plan fails The global banking system had already begun to freeze up and Lehman Brothers had already declared bankruptcy when the U.S. Congress defeated a $700billion bailout package for financial institutions laden with toxic assets.
The vote sparked global panic, with the S&P 500 index dropping by 9 per cent on that day alone. Over the following month, that benchmark’s losses would total a staggering 30 per cent. Within one week, then president George W. Bush signed subsequent bailout legislation designed to take “troubled assets,” such as mortgage-backed securities, off the books of financial institutions, but what would amount to the worst financial crisis since the Great Depression would not reach its nadir for another six months. It would take more than two years for the market to return to its value prior to the Lehman bankruptcy.
Sept. 11, 2001 – Terrorist attacks The horrifying revelation that the United States was under attack dawned before the stock market was set to ring the opening bell that morning. To prevent a potential market meltdown, the New York Stock Exchange and the Nasdaq were shut down for the rest of the week. The fear was still palpable when they opened for trading the following Monday morning, and the selloff that week was indeed one of the worst on record, as the S&P 500 index ended the week down by 12 per cent. While the political and economic consequences of 9/11 were very much unknown, calm was quickly restored in the stock market, as the main U.S. benchmark regained what was lost within one month.
Most recently, just this year, massive panic on August 2015 and January 2016. Created some of the best buying opportunities in the last 12 months.
Stay the course. The world needs oil. Supply is going down, demand if going up even with all the false scares that fooled many into selling at the perfectly wrong time.
LTS management did the perfect thing in postponing to benefit from the oil rally that is at our doorstep. Worst time to sell LTS at 19, best time to buy. This will look amazingly cheap in a month.
I've seen this in 2009, with Penn West a few weeks agao and will see this again here on LTS.
A few more weeks of patience for big rewards!
brexit would have no impact on LTS at these levels - they either figure out funding or they go away - I am hopeful they'll be able to put a deal together - if oil goes higher - mid 50's and LTS hasn't gone up I'll add to my position - right now I'll just hold my little piece - could still double up, but probably not for 1 to 3 weeks if I do