Morning Comment: Can Energy Stocks Finally Outperform?


  • Stocks a bit lower on higher oil prices, but the response if fairly benign so far.
  • Not everybody is so sure that the production will come back quickly…or that the situation will not escalate.
  • The Transports (led by the rails) should get hit pretty hard.
  • If oil prices stay elevated, it should help the energy stocks finally begin to outperform.
  • Since the energy stocks are very under-owned, the rally could be very, very strong.
  • The key resistance levels on the XLE energy ETF are the 200 DMA & the summer highs.


Stocks a bit lower on higher oil prices, but the response is fairly benign.

As you’ve all heard by now, crude oil is trading about 8%-10% higher on news that 5% of the global oil production has been shut down by the drone attacks on the Saudi oil fields. The reaction in other markets has actually not been very pronounced…as most global stock indexes (and the U.S. domestic futures) are only down about one half of one percent. Therefore, the global stock markets are pretty complacent about this development…and it seems like they think this is a problem that will only last a few days.

Listening to several experts on both crude oil and geopolitics, they don’t seem to quite as sure that this will be a one-off development. In fact, after saying that they could 1/3 to 1/2 of their production back on-line within days, Aramco is now saying this morning that they are “less optimistic on the pace of oil output recovery.”

Also, any belief that oil production can ramp back up quickly (and thus oil prices will drop back down) assumes that there are no further attacks…that the President (who is “locked and loaded”) does not respond militarily…and the situation does ...

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Morning Comment: TLT Treasury ETF Nearing KEY Support.


My call for a sharp pull-back in the Treasury market (and thus a sharp rise in long-term interest rates) just before Labor Day was SPOT-ON! When the vast majority of pundits were saying that central bank liquidity would keep both ...

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Morning Comment: We will NEVER forget.


  • Scooby-Do, where are you?
  • Will Trump continue to follow the script on trade?
  • The "rotation" is algo driven right now.
  • A "tradable" bounce in rates or a long-term change in trend?
  • Tech will face headwinds for many, many months.
  • AXP ...
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Morning Comment: Forget about "rotation" for most groups.


As we pointed out recently, the Treasury market had reached an overbought level (in the TLT Treasury ETF) that had never been seen before…and the oversold level on the yield of the U.S. 10yr Treasury note had reached a ...

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Morning Comment: Will "Fed Speak" Move the Markets This Week?


It's September, but it's not the calendar that's the concern!

Well, here we are...September...traditionally the worst month of the year. HOWEVER, the real concerns for investors should derive from the developments of the past few ...

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The Weekly Top 10: Look out below.


The Weekly Top 10


1) If you want to maximize your investment returns, spending a lot of time trying to figure out when the next recession is coming is a not good use of your time. We can still have ...
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Morning Comment: Bitcoin Testing VERY Important Support


The bond market is not reacting to China's dovish comments on trade.

The equity futures are trading almost 1% higher this morning due to dovish comments out of China on the trade negotiations. They said they wanted to emphasize ...

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Morning Comment: Important Leadership Groups Testing Key Support (again).


  • Even though the consumer is strong, the U.S. economy is definitely slowing…and earnings growth in the U.S. is grinding to a halt. The trade war is a headwind for both of these issues.
  • The Russell 2000, the Transports ...
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Morning Comment: The Fed's New Message is Clear.


The market will impact the Fed, not the other way around.

We don’t know why people keep talking about the Fed when it comes to the upcoming moves for the stock market. That is a waste of time right now ...

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Morning Comment: Housing stocks breaking out.


  • When trying to figure out how the market will react to an “highly anticipated event,” it’s important to note how the stock market has acted BEFORE this “event” takes place.
  • Despite a slow down in domestic economic growth, the ...
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American Express (AXP): Close to important support on the chart


AXP has outperformed nicely since the December lows…as it rallied almost 44% from those lows to its July highs. However, it has rolled over a little bit recently.

The decline took AXP below its trend-line from last year’s low. The ...

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Morning Comment: Too much blame on the Fed.


  • We agree with many of the President's policies, but....
  • The trade war IS having a negative impact on the economy
  • Let's look past the politics
  • Way too much blame on the Fed for the slowing economy
  • The trade ...
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