Donald Johnson

The Gas Price Roller-Coaster: It’s Not an Amusement Park Ride

I guess I'm very skeptical. The other day I saw an analysis that said an investment in the electricity grid would reduce demand for natural gas by 10%.

The last thing we want is for politicians to pick the winners and losers in the energy and auto markets, because they make huge bets that often turn out very badly.

To me, the article is promoting long-term trends that cannot be used by investors. Smart traders deal with reality, not with wish lists.

7 Attractive Dividend Stocks

PFE's sinking. It's point and figure price objective is $8, down from $17.87. GE is at $22.62 and its objective is $13. It's being shorted on its huge financial exposure regardless of what it says. PAYX is sinking on weekly charts. It's at $32.12 with an objective of $52. PAYX rallies in anticipation of rising interest rates, which don't seem to be in the cards at the moment. I just sold BBT because it's a bank.

Barron's Banks on $100 Oil

Of course, we were saying a lot of this a month ago. Bubbles burst. Politicians manipulate markets. Speculators rule until they don't. June 23 WSJ.com says Congressional report finds speculators account for 70% of oil futures trading, roughly. NYtimes.com June 23 says Obama has close ties to corn and ethanol producers. Saudis say they'll increase production; China caves and reduces subsidies much earlier than predicted as does India.

If Bernanke and Paulson's jawboning the markets won't depress prices, price manipulation by various consuming and exporting countries' politicians might do the trick.

Institutional investors will sharply curtail their speculating in the futures markets.