Seeking Alpha

InTheMoneyStock...'s  Instablog

InTheMoneyStocks.com
138 Followers
3 Following
Send Message
InTheMoneyStocks.Com is a research and consulting company focused on mathematical proprietary techniques along with a key understanding of price, pattern and time. Through understanding geometry and other technical analysis methods, InTheMoneyStocks.Com prides itself on avoiding Wall Street hype... More
My company:
InTheMoneyStocks.com
My blog:
Pro Traders Rant and Rave Blog
  • Can The U.S. Consumer Handle High Oil Prices?  0 comments
    Oct 28, 2011 10:41 AM | about stocks: UHN, USO, USL, UCO, COP, XOM
    While the cheerleaders on the cable financial news networks are shaking their pom-poms and jumping out of their seats about the recent stock market rally oil prices have surged higher over the past month. The price of WTI crude futures (CL) has soared higher by nearly $20.00 since the October 4, 2011 low when oil was trading at $74.95 a barrel. Can the U.S. consumer afford high energy prices ahead of the winter heating season?

    It is important to note that the U.S. consumer accounts for 70.0 percent of the gross domestic product (GDP) in the United States. Therefore, if the U.S. consumer cuts back on spending the economy should slow down. High gasoline and energy prices are a direct tax on the consumer. Then when you add in a very weak U.S. Dollar it becomes a double tax on the consumer as other goods will become more expensive to buy. The weak U.S. Dollar is very good news for the energy stocks such as Exxon Mobil Corp (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron Corp (NYSE:CVX), however, it is not so good for the people that are trying to just get by.

    If you look at the oil rallies in 2011 you will see that the stock markets seem to run out of steam anytime oil trades above $90.00 a barrel. Just look at a daily chart of crude and you will see that that the economy starts to stall out about a month or two after the price of WTI oil crosses above $90.00. The winter heating season is also coming upon us and the U.S. consumer will not only have to fill up their gas tanks in their cars, but they will also have to heat their homes. This is certainly going to be problematic for the U.S. consumer. It is good for GDP that the U.S. consumer will be spending a lot of money on energy this year because they will likely be cutting back on spending elsewhere.

    Nicholas Santiago
    InTheMoneyStocks.com

    Stocks: UHN, USO, USL, UCO, COP, XOM
Back To InTheMoneyStocks.com's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Full index of posts »
Latest Followers

StockTalks

  • Weak US Dollar, easy money = GOLD Higher $GLD
    Feb 21, 2012
  • For technical traders, yesterday was a buying opportunity. For the other 99%...http://bit.ly/qmvOpq
    Aug 11, 2011
  • April gold finished higher by $12.90 to close at $1,414 an ounce.
    Feb 23, 2011
More »

Latest Comments


Most Commented
Posts by Themes
stocks, $EWH $FXI $EWJ, 10 year, 200 moving average, 2012, AAPL, ADP , ADP Employment, ADP Private Jobs Report, ADR, agriculture, Agriculture, ainvesting, airlines, AKS, AMZN, Apple, ARUN, ASCA, Asia, AT T, Auto, Automotive, AXP, bailout, banks, Banks, Bernanke, BIDU, Blackberry, BLK, bonds, bounce, broadcom, BYD, case shiller 20 city index, CAT, China, china, citrix systems, CLF, coal, Coffee, commodities, commodity, construction, copper, Cotton, cotton, CPI,
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.