Oil Prices

It is strange how a couple years ago, oil had no bearing on our overall economy. Fast ofrward to today and it seems as though the price of oil is what moves the market more than anything. The explosion of oil prices is suspicious and I said for a while, had to stop. Fundamentally, there was no evidence supporting the possibility of oil prices rising more and more. Most of the market was being driven by oil futures speculators and media.

In the last month we have seen a correction, much to our wallet's liking. Price have dropped from $145.85/barrel to the $115/barrel mark today. This is a decline of about 21% in about month. I had been saying since early June, that prices would be dropping, but it took longer than I expected. Trying to take advantage of this, I had a short on the oil and gas index using powershares 2x inverse ETF (DUG), only to realize that this doesn't necessarily correlate with the price oil, as much as it does the entire index (as the name states). I sold this position in mid-June, and bought into another Powershares 2x inverse, but this time it was one that correlated with the Crude Futures market - DTO it is actually an exchange traded note, which is similar to an ETF, but for debt. In this case it is a mixture of oil futures contracts.

I found that DTO correlated much closer with the prices of oil, and in the last 2 to 3 weeks it had started to go up (as oil went down), I put a stop order on it at 30 and thought that I should be happy such a dramatic drop in a couple weeks, then this week it slid further and now at close after a crazy oil week this week, DTO is at 33. That is even with news of a pipeline explosion in Turkey which produces nearly 1% of the worlds daily oil output, and the unrest in Georgia. I find it interesting how much new articles change over the course of a couple months.

I sit at my desk and read news and watch CNBC all day, and decided that to fill time and space media will continue to fabricate how bad something is just so they have a story. It is ridiculous the way they spin things to make them negative.

for instance this article from seeking alpha talking about how high oil will continue to rise (and the numerous other articles stating how much trouble that spells for our economy):
http://seekingalpha.com/article/78322-are-high-oil-prices-here-to-stay

And then an article from Yahoo Finance today about low prices being bad for the economy:
http://finance.yahoo.com/tech-ticker/article/45612/Why-Oil-under-100-Is-Bad-News?tickers=fslr,xom,bp,vlo

It is disturbing how much influence media actually has on our economy, and if they want any news to be negative, they will make it so.