Negativity has almost never been as high as I’ve seen it in the past several days for the oil space. And, to be fair, I can understand it easily – oil stocks have been real dogs.
As the stock market has soared through 21,000, oil stocks have done more than just lag the major indexes, they’ve outright sagged against oil prices that continue to languish near $50 a barrel. It’s been a tough time to be a bull on oil stocks, but it also has been a time that would cause many to reconsider their strategy.
After all, there’s nothing but analysts out there who are pessimistic on oil stocks and oil prices: Read Arthur Berman here, my friends at SCS here and even the EIA getting worried about fast increasing production in the Permian basin here.
There’s a lot of data in those links I just showed you, and they are all admittedly bearish on oil and oil stocks – but there’s a bit of experience that keeps me from bailing on my portfolio choices, and moving out of oil stocks: I love being on the other side of the analysts.
We’ve also seen very aggressive speculative moves in and out of oil futures as traders try to gauge the timing of the rebalancing of global oil supply and demand. And although they’ve already gotten it wrong twice, causing two separate mini-crashes, I still feel good playing this market from the long side.
Nearly everyone’s bearish, so it must be time to buy.
I am still…