I've written on how I believe energy stocks will be the leading sector for 2016 and perhaps beyond, but with recent volatility in equity indexes making trading treacherous, I think it would be useful to get a macro view of markets as they relate to my long-haul energy recommendations.
It is clear that two major macro events have caused major recent volatility in stock indexes – the prospect of the Federal Reserve normalizing rates and the insecurity of the Chinese economy and other emerging market indicators. I want to lend my perspective to both and comment on how they impact my thinking and trading of the energy sector.
The financial world has endlessly ruminated on the schedule of the Federal Reserve and their inevitable move back from a zero interest rate policy (ZiRP) for the last two years. Not a day goes by without CNBC, Bloomberg or the WSJ devoting some space to the latest thoughts and parsings of every Fed governor who's willing to talk. Some on-air economists have made a living making twice weekly appearances on the single question of when the Fed will raise rates.
I have a very smart trader friend who believes that everything that every market has done or will do is overwhelmingly related to this question. Rising stock market? Low commodity prices? High-yield bubble? It's all about the Fed. I do not give quite that kind of overwhelming influence to this one source, but I will say that if you are in the camp that the Fed is encompassing and…