Here is an hourly chart showing pit trading in April crude oil futures.
The market has rallied more than I originally expected but the rally still is within normal bounds for a reaction against the downtrend. I now think it will halt at 63.50 resistance and then drop to 56.00.
1 comment:
Carl,
I like your thinking.
Oil is an incredibly "overcrowded" trade where hedge funds and new minted "Cramericans" fight the long/short battle in energy. Fact is: There is too much oil (see inventory numbers). Geo-political spikes will occur now and then (like today) but the prevailing trend is down. I have heard some say that low $50's may be the magic number...one or two or saying in the $40's. I believe that there may be a handful of names in the enrgy sector that can be owned. The majority look "tired".
I also liked your comments on GOOG. Barrons tried their best and failed to kill GOOG. They start with the "generals": GOOG, AAPL, DNA, WFMI have all been "hit". Ironically, these four stocks now trade at forward PEG's that are significantly lower in their recent history. I don't think this assault on the Generals will be successful.
That said, I am not hopeful that the DJIA can hold up as the rate of growth for these stocks is low single digits on average and even negative in several cases. Old brands tend to get attacked by new ones.
Good stuff.
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